Answer to Question #238681 in Management for Gundo

Question

7. Explain cost accounting and its functions as well the distinguishing features of cost accounting

systems for (a) job order costing, and (b) process costing

8. a. Give suitable explanation on (i) Cost; (ii) Cost Objects; (iii) Cost Driver

b. Discuss the different forms of Cost Classification

9. Discuss (i). the notions and purposes of CVP Analysis, and

(iii) the Components of CVP Analysis (Break-Even Analysis, Target Analysis,

Margin of Safety Analysis, Sales-mix Analysis and others)

Answer 1

7a) It allocates the cost based on the cost incurred for producing a job or batch.

 b) It allocates costs based on processes used for the production of a unit.

8a) i) cost refers to cash amount given up for an asset.

ii) cost object deals with overall cost of service or product

iii) cost driver deals with quantity of resources the enterprise consume.

b) Fixed and variable costs. Expenses are separated into variable and fixed cost classifications, and then variable costs are subtracted from revenues to arrive at a company's contribution margin

9 i) Cost-volume-profit (CVP) analysis is a way to find out how changes in variable and fixed costs affect a firm's profit. Companies can use CVP to see how many units they need to sell to break even (cover all costs) or reach a certain minimum profit margin.

ii) Ascertaining the sales volume required to achieve a target profit. As well as ascertaining the break-even point