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Cost Accounting Notes - Part 2 Costing Methods & Inventory

This document outlines various costing methods including Job Order, Process, Batch, Contract, and Activity-Based Costing (ABC). It also discusses inventory valuation methods such as FIFO, LIFO, and Weighted Average, along with key concepts in Cost-Volume-Profit analysis and marginal costing. Important formulas for total cost, cost of goods sold, and net profit are provided for reference.

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15 views1 page

Cost Accounting Notes - Part 2 Costing Methods & Inventory

This document outlines various costing methods including Job Order, Process, Batch, Contract, and Activity-Based Costing (ABC). It also discusses inventory valuation methods such as FIFO, LIFO, and Weighted Average, along with key concepts in Cost-Volume-Profit analysis and marginal costing. Important formulas for total cost, cost of goods sold, and net profit are provided for reference.

Uploaded by

lumber jack
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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Cost Accounting Notes - Part 2: Costing Methods & Inventory

6. Costing Methods
- Job Order: Customized jobs

- Process: Continuous production

- Batch: Grouped production

- Contract: Long-term projects

- ABC: Activity-based costing

7. Inventory Valuation Methods


- FIFO: First in, first out

- LIFO: Last in, first out

- Weighted Average: Average cost per unit

8. CVP & Break-Even


Break-even Point (units) = Fixed Costs / (Selling Price - Variable Cost)

Contribution Margin = Sales - Variable Costs

9. Marginal Costing
- Only variable costs are considered

- Fixed costs treated as period cost

- Useful for decision-making

10. Important Formulas


- Total Cost = Prime Cost + Overheads

- COGS = Cost of Production + Opening FG – Closing FG

- Net Profit = Sales – Total Cost

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