Chapter 1
Basic Cost Concepts


Learning Objectives

• To understand the meaning of different costing terms to understand different costing methods
• To have a basic idea of different costing techniques
• To understand the meaning of cost sheet

In order to determine and take a dispassionate view about what lies beneath the surface of accounting figures, a financial analyst has to make use of different management accounting techniques. Cost techniques have a precedence over the other techniques since accounting treatment of cost is often both complex and financially significant. For example, if a firm proposes to increase its output by 10%, is it reasonable to expect total cost to increase by less than 10%, exactly 10% or more than 10%? Such questions are concerned with the cost behavior, i.e. the way costs change with the levels of activity. The answers to these questions are very much pertinent for a management accountant or a financial analyst since they are......

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Title: Cost Accounting
Approximate Word Count: 10927
Approximate Pages: 44 (250 words per double-spaced page)

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