No single system can adequately answer the demands made by diverse functions of cost systems. While companies can use one method to capture all their detailed transactions data, the processing of this information for diverse purposes and audiences demands separate, customized development. Companies that try to satisfy all the needs for cost information with a single system have discovered they can’t perform important managerial functions adequately. Moreover, systems that work well for one company may fail in a different environment. Each company has to design methods that make sense for its particular products and processes. Of course, an argument for expanding the number of cost systems conflicts with a strongly ingrained financial culture to have only one measurement system for everyone. Describe the costs and benefits of having a single measurement system.
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
No single system can adequately answer the demands made by diverse functions of cost
systems.
While companies can use one method to capture all their detailed transactions data,
the processing of this information for diverse purposes and audiences demands separate,
customized
development. Companies that try to satisfy all the needs for cost information with
a single system have discovered they can’t perform important managerial functions adequately.
Moreover, systems that work well for one company may fail in a different environment. Each
company has to design methods that make sense for its particular products and processes.
Of course, an argument for expanding the number of cost systems conflicts with a strongly
ingrained financial culture to have only one measurement system for everyone.
Describe the costs and benefits of having a single measurement system.
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