Description
This is apresentation about techniques of costing. It mainly talks about work study, standard costing and budgetary control.
TECHNIQUES OF COSTING
?WORK STUDY ?MATERIAL CONTROL ?STANDARD COSTING ?BUDGETARY CONTROL
WORK STUDY
• DEFINITION
Work study is defined as that body of knowledge concerned with the analysis of the work methods and the equipments used in performing a job, the design of an optimum work method and the standardisation of proposed work methods.
Objective of work study
• To analyse the job • To measure the work content of the job • To increase productivity • To improve operational efficiency
Benefits of work study
• Increased productivity • Improved work flow • Fair wages to emplyees • Better working condition to employees • Reduced material handling cost • Reduced manufacturing cost
MATERIAL CONTROL
• It is a systematic control over the
purchasing, storing , and using of materials so as to have the minimum possible cost of material.
Objective of material control
• Availability of material • No excessive investment in materials • Reasonable price • Minimum wastage • No risk of spoilage and obsolescence • Ready information about availability of
materials • Misappropriation of materials • Right amount of payment to suppliers
STANDARD COSTING
• It is the preparation of standard costs and
applying them to measure variations from actual costs and analyzing the causes of variations with a view to maintain maximum efficiency in production . It is a technique which uses standards for costs and revenues for the purpose of control through variance analysis.
BUDGETARY CONTROL
• It is one of the tool to the management in
controlling the costs. • Budgetory control can be prepared on the basis of past figures adjusted to future trends.
Difference between standard costing and budgetary control
• Standards are based on technical assessments •
whereas budgets are based on past actual adjisted to future trends. Budgetary control deals with the operations of a department of business as a whole while standard costing is applied to manufacturing of a product, process or providing service. Budgetary control is extensive whereas standard costing is intensive.
•
• In budgetary control , variances are not
revealed through the accounts but are revealed in total. But in standard costing , variances are analysed in detail according to their originating causes. Thus standard costing reveals variances through different accounts.
conclusion
• Both standard costing and budgetary
control are complimentary to each other and for maximum efficiency both should be used simultaneously . Both may prove more effective if they are used in conjunction to each other.
THANK YOU
doc_213930432.ppt
This is apresentation about techniques of costing. It mainly talks about work study, standard costing and budgetary control.
TECHNIQUES OF COSTING
?WORK STUDY ?MATERIAL CONTROL ?STANDARD COSTING ?BUDGETARY CONTROL
WORK STUDY
• DEFINITION
Work study is defined as that body of knowledge concerned with the analysis of the work methods and the equipments used in performing a job, the design of an optimum work method and the standardisation of proposed work methods.
Objective of work study
• To analyse the job • To measure the work content of the job • To increase productivity • To improve operational efficiency
Benefits of work study
• Increased productivity • Improved work flow • Fair wages to emplyees • Better working condition to employees • Reduced material handling cost • Reduced manufacturing cost
MATERIAL CONTROL
• It is a systematic control over the
purchasing, storing , and using of materials so as to have the minimum possible cost of material.
Objective of material control
• Availability of material • No excessive investment in materials • Reasonable price • Minimum wastage • No risk of spoilage and obsolescence • Ready information about availability of
materials • Misappropriation of materials • Right amount of payment to suppliers
STANDARD COSTING
• It is the preparation of standard costs and
applying them to measure variations from actual costs and analyzing the causes of variations with a view to maintain maximum efficiency in production . It is a technique which uses standards for costs and revenues for the purpose of control through variance analysis.
BUDGETARY CONTROL
• It is one of the tool to the management in
controlling the costs. • Budgetory control can be prepared on the basis of past figures adjusted to future trends.
Difference between standard costing and budgetary control
• Standards are based on technical assessments •
whereas budgets are based on past actual adjisted to future trends. Budgetary control deals with the operations of a department of business as a whole while standard costing is applied to manufacturing of a product, process or providing service. Budgetary control is extensive whereas standard costing is intensive.
•
• In budgetary control , variances are not
revealed through the accounts but are revealed in total. But in standard costing , variances are analysed in detail according to their originating causes. Thus standard costing reveals variances through different accounts.
conclusion
• Both standard costing and budgetary
control are complimentary to each other and for maximum efficiency both should be used simultaneously . Both may prove more effective if they are used in conjunction to each other.
THANK YOU
doc_213930432.ppt