Question

Q3. What are the essential factors for installing a cost accounting system? Explain
Q4. Discuss the various reports provided by cost accounting department.
Q5. Explain the treatment of over and under absorption of overheads in cost accounts.

Answer 1

3) Essentials of Cost Accounting System

1) Suitable for nature and size of business – Costing system adopted must be suitable in nature and size of business and its information.

2) Economical – Costing system must be economical to organization. The benefits must be higher than its cost.

3) Flexible – The system must be flexible which can adopt or alter in changing business conditions.

4) Easy to operating and understand – The system must be easy & simple to understand.

5) Easy coordination – The system should be formulated in such a way that all coordinated with all concerned department and their staff.

6) The system should ensure proper accounting.

7) Integrated System – The system must establishes the intergration of financial and cost accounting system which will avoid repetation of work.

8) The system must meet requirements of management and its information needs.

Pls ask separate question for remaining problem