needs of product costing system
variable costing
Standard costing is process of determining the standard price require to produce one unit of product while actual costing system uses the actual prices of manufacturing one unit of product.
In Target costing system, comapnies tries to achieve target prices by reducing those parts of activity which are not increasing the value of product. Life cycle costing is a concept in which companies tries to read the overall process of development of product life cycle and tries to minimise the cost at area where it is not required or not increase the value of product.
An activity-based absorption costing system defines the cost by how many activities a product unit uses. A traditional absorption costing system defines the cost by how much money went into making the product unit.
needs of product costing system
Job order costing is more appropriate than process costing when the product being produced is a custom product
variable costing
Standard costing is process of determining the standard price require to produce one unit of product while actual costing system uses the actual prices of manufacturing one unit of product.
Target costing refers to the design of a product and the processes used to produce it , so the ultimately the product can be manufactured at a cost that will enable the firm to make a profit when product is sold
In Target costing system, comapnies tries to achieve target prices by reducing those parts of activity which are not increasing the value of product. Life cycle costing is a concept in which companies tries to read the overall process of development of product life cycle and tries to minimise the cost at area where it is not required or not increase the value of product.
An activity-based absorption costing system defines the cost by how many activities a product unit uses. A traditional absorption costing system defines the cost by how much money went into making the product unit.
All cost associated with a particular product.
marginal costing is recommended by IAS and absorption costing is not recommended by IAS,marginal costing is used for internal purposes and absorption costing is ysed for external purposes,in marginal costing the fixed production overheads are not calculated as a product cost and in absorption costing the fixed prodution overheads are calculated as product cost.
Over costing and under costing occurs because overhead cost is applied first using some ratio to find out the cost of product before the process of production done and actual cost found.
An absorption costing is an accounting method used to calculate the total cost of a product by factoring in both direct and indirect costs.
There are two type of costing are involved in a product or service. ie Direct cost and Indirect cost. In this two head there are two sub type costing are involved. ie Varriable cost and Fixed cost. Here the the total varriable cost are involved in a product of cost is called marginal costing. In another way the totoal cost -fixed cost is called marginal costing By M.Magesh 099948 33079