Objectives of Cost Accounting.

Q4. What are the main objectives of cost accounting?
Ans. Objectives of cost accounting are as follows:

  1. Ascertainment of cost by post costing and continuous costing methods.
  2. Determination of selling price of each product by considering its cost and profit margin.
  3.  Cost Control and cost reduction.
  4.  Ascertaining the profit of each activity so suitability of each activity in business can be determined.
  5. Assisting management in decision making both short term and long term decision through its technique like marginal costing.
    Read More …

Responsibility center, Explicit cost and implicit cost, Product cost and period cost, Cost control and cost reduction, Post costing and continuous costing.

Q3. Write short notes on the following:

  1. Responsibility center
  2. Explicit cost and implicit cost
  3. Product cost and period cost
  4. Cost control and cost reduction
  5. Post costing and continuous costing.

Ans.

  1. Responsibility Center: When whole business is subdivided in too many departments, each u entrusted with a special task, there each such department or Center is called the responsibility center. Each such center is headed by a manager. Responsibility center can broadly be classified into three categories viz. Cost center, profit center and investment center. Center which have to incur cost and control it, is called cost center. Center which has the responsibility of generating and maximizing profit is called profit center. Center which has the responsibility of investment and profits both is called the investment center.
  2. Explicit Cost and Implicit Cost: Cost which are recorded in books and require cash payment are called explicit cost. Cost which does not involve any cash payment and not recorded in books of accounts is called implicit cost.
  3.  Product Cost and Period Cost: Product cost is the costs which are Read More …

Opportunity Cost, Impute Cost, Out of Pocket Cost, Sunk Cost, Shut Down Cost, Discriminatory Cost.

Q2. Write short note on the following:

  1. Opportunity Cost
  2. Impute Cost
  3. Out of Pocket Cost
  4. Sunk Cost
  5. Shut Down Cost
  6. Discriminatory Cost.

Ans.

  1. Opportunity Cost: The cost refer to the value of sacrifice made or benefits of opportunity foregone in accepting an alternative course of action. In other words it is the maximum alternative earning that might have been obtained if the productive goods, services or capacity has been applied to some alternative use. For example: Interest on those capital which is used in business undertaking.
  2. Impute Cost: Cost which do not involve any cash outlay is called as impute cost. It is same as opportunity cost.
  3. Out of Pocket Cost: Cost which involve cash outlay is called out of pocket cost.
  4. Sunk Cost: A cost which has already been incurred and cannot be affected in future is called sunk cost. In other words historical cost incurred in the past is known as sunk cost. They play no role in decision making in the current. For example, in the case of decision relating to the replacement of machine, the written down value of the existing machine is a sunk cost and therefore, not considered.
  5. Shutdown Cost: Cost which we have to incur all through a plant is shutdown for a temporary period is called shutdown cost. In other words, all fixed costs, which cannot be avoided during the temporary closure of a plant, known as shutdown cost.
  6. Discriminatory Cost: Cost which is incurred due to management policy and can be save it policy changed is called discriminatory cost. These cost is also known as es-capable or avoidable cost.

Cost, Costing, Cost Accounting, Cost Accountancy, Conversion Cost, Differential Cost.

Q1. Write short notes on the following:

  1. Cost
  2. Costing
  3. Cost Accounting
  4. Cost Accountancy
  5. Conversion Cost
  6. Differential Cost.

Ans.

  1. Cost: The amount of expenditure (actual or notional) incurred on or attributable to a given thing.
  2. Costing: The technique and process of ascertaining cost is called costing.
  3. Cost Accounting: It is defined as the process of accounting for cost which begins with the recording of income and expenditure all the bases on which they are calculated and ends with the preparation of periodical statements and reports for ascertaining and controlling costs. Read More …

Count Lowest to Highest.

Q18. Design a Java Netbeans 6.5.1 GUI application having interface as shown below :

 The loop for the frame should print numbers from lowest to highest on the basis of given two numbers, upon clicking at “Count” button.

Sol:

Type the following code by double clicking jButton2, button, below the line that says, ‘// TODO add your handling code here’

 

 

int num1,num2;

num1=Integer.parseInt(jTextField1.getText()); Read More …

Importance of Metals.

Q10. Metals have great importance in our everyday life. Justify the statement.

or

What is the importance of metals in our everyday life?
Ans. Metals have great importance in our daily life because of the following reasons:

  1. Metals are used to make utensils( Aluminum, Copper).
  2. They are used in construction of building and bridges (Iron, Aluminum).
  3. In the manufacture of bodies of automobiles, ships, trains. (Iron, Aluminum etc).
  4. For making jewelry, furniture, electric appliances etc.

Malleable and Ductile.

Q9. Explain the meaning of malleable and ductile.
Ans. Metals can be hammered into thin sheets. This property of metal is known as the malleability. The metals showing this property are called malleable.
Metals can be drawn into wire. The ability of metals to be drawn into thin wire is called ductility and the metals showing this property are ductile. Example: Gold, silver, copper.
One gram of gold can be drawn into a wire of about 2 kilometer length.

Reasons For Unethical Behavior Among Finance And Accounting Professionals.

Q27. Explain the reasons for unethical behavior among finance and accounting professionals.
Ans. The reasons which lead to unethical behavior are as follows:

  1. Emphasize on short term results: This is one of the primary reasons which has led to downfall essay of many companies like Enron and world com.
  2. Ignoring small and unethical issues: It is known fact that most of the compromises we make are small but however they lead us into committing large infractions and ignoring minor lapses, lead to better and more huge mistakes.
  3. Economics Cycles: In Good times, companies are relaxed in their accounting procedures or disclosures, as there is a pervasive feeling good effect. But when times of hardships follow, then the hit taken by them is almost fatal, as was proved in the Enron case. So companies need to watch out for economic cycles scan and be vigilant in good times as well as bad.
  4. Accounting Rules: In the era of globalization and massive cross border flow of capital, accounting rules are changing faster than ever before. The rules have become more Complex and it is difficult to identify deviations from these complex set of requirements. The complexity of these principles and rules and the difficulties associated with identifying abuse are reasons which may promote unethical behavior.