Have been certain rules and principles in the field of costing developed over yearsīy our forefathers. The word ‘Costing’ refers to the technique and process of ascertaining costs. Such deficiency of financialĪccounting has given rise to the need of cost accounting. The necessary information to do similar estimation. The existing system of financial accounting does not provide The above estimation is done for the purpose of planning, cost controlĪnd decision-making. The management requires all information as seen in the example for each product Phone produced and supplied in the market. 400įor material, Rs for labour and Rs for overhead on every mobile Transaction i., cost, profit and price are necessary components of any businessĪ mobile phone factory introduces a new device. The major purpose of such classification is to estimate the profitĪnd to understand its relationship with costs and price. TheĮxpenditure is to be understood in terms of material, labour and other direct and Expenditure involved inīusiness has to be ascertained to fix the price of a product produced.
It helps us to classify, record, and allocate theĮxpenditure for the determination of costs of product.
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