Types of Cost Accounting

Cost accounting is often defined as a term that aims to capture all the expenses incurred during a specified accounting period. This is done to facilitate the management sector in making correct and appropriate decisions for the firm. This mainly involves capturing, classifying and recording data and expenses acquired by the firm. In the further process, this is summarized and analyzed to find the best selling price as well as determine the correct saving power and rate.

The four main types of cost accounting are as follows-

Standard cost accounting

Under this category, various types of ratios are used for comparison to describe the differences between productive labor and resources employed. This type also determines whether the product or service are utilized in standard conditions.

Activity-based cost accounting

This is where you determine the regulation of activities as well as costing. These activities majorly include costing final production and tracking resource usage along with the allocation of resources to the activities. This type of cost accounting allocates expenses from each of the units to particular cost objects that are associated with goods, services and their customers. This tends to reflect a higher level of accuracy as compared to other cost accounting methods.

Lean accounting

This type is defined as an extension of the concept of lean manufacturing. Altogether, this method emphasizes the importance of some value-based expenses, in terms of lean focused performance measurements.

Marginal costing

The other name for this method is profit analysis. It majorly includes evaluation between different goods, services, production amount, costs, revenues, outlays, sales and volume. This kind of association is marked as contribution margin, which is further estimated by deducting the variable expenses from the profit. This variable cost is further divided by the revenue.

So, these were some essential types of cost accounting types that a student needs to consider while compiling his assignment. Apart from this, if you require any kind of help regarding your accounting assignments or projects, feel free to contact our online accounting assignment help services for professional help and guidance.