Budgetary Control LET US SUM UP - Accounts and Finance for Managers

Cost denominates the use of resources only in terms of monetary terms. In brief, cost is nothing but total of all expenses incurred for manufacturing a product or attributable to given thing. In clear, the cost is nothing but ascertained expression of expenses in terms of monetary, incurred during its production and sale. Service centre is the centre or division which normally incurs direct or indirect costs but does not work directly on products. Normally, Maintenance dept. and general factory office are very good examples of the service centre. Costs which cannot be controlled are known as uncontrollable costs. All fixed costs are very difficult to control or bring down ; they rigid or fixed irrespective to the level of production. A budget is detailed plan of operation for some specific future period. It is an estimate prepared in advance of the period to which it applies. It acts as a business barometer as it is complete programme of activities of the business for the period covered. Under costing, the role of unit costing is inevitable tool for the industries not only to identify the volume of costs incurred at every level but also to determine the rational price on the commodities in order to withstand among the competitors. Direct labour is the cost of the labour which is directly involved in the production of either a product or service. For e.g. The cost of an employee who is mainly working for the production of a product /service at the centre, known as direct labour cost. Indirect expenses are the expenses other than that of the direct expenses in the production of a product. The expenses which are not directly part of the production process of a product or service known as indirect expenses. For e.g.: Rent of the factory, salesmen salary and so on.

All rights reserved © 2018 Wisdom IT Services India Pvt. Ltd DMCA.com Protection Status

Accounts and Finance for Managers Topics