Difference between cost costing and cost accounting variable

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Costs are the necessary expenditures that must be made in order to run a business.

Every factor of production has an associated cost. The cost of labor, for example, used in the production of goods and services is measured in terms of difference between cost costing and cost accounting variable and benefits. The cost of a fixed asset used in production is measured in terms of depreciation.

The cost of capital used to purchase fixed assets is measured in terms of the interest expense associated with raising the capital.

Cost accounting - Wikipedia

Businesses are vitally interested in measuring their costs. Many types of costs are observable and easily quantifiable. In such cases there is a direct relationship between cost of input and quantity of output. Other types of costs must be estimated or allocated. That is, the relationship between costs of input and units of output may not check this out directly observable read more quantifiable.

In the delivery of professional services, for example, difference between cost costing and cost accounting variable quality of the output is usually more significant than the quantity, and output cannot simply be measured in terms of the number of patients treated or students taught.

In such instances where qualitative factors play an important role in measuring output, there is no direct relationship between difference between cost costing and cost accounting variable about yourself thesis and output achieved.

Costs can have different relationships to output. Costs also are used in different business applications, such as financial accounting, cost accounting, budgeting, capital budgeting, and valuation. Consequently, there are different ways of categorizing costs according to their relationship to output as well as according to the context in which they are used.

Following this summary of the different types of costs are some examples difference between cost costing and cost accounting variable how costs are used in different business applications.

The two basic types of costs incurred by businesses are fixed and variable. Fixed costs click the following article not vary with output, while variable costs do. Fixed costs are sometimes called overhead costs.

They are incurred whether a firm manufactures widgets /i-need-someone-to-do-my-term-paper-quilling.html 1, widgets. In preparing a budget, fixed costs may include rent, depreciation, and supervisors' salaries. Manufacturing overhead may include such items as property taxes and insurance.

These fixed costs remain constant in spite of changes in output. Variable costs, on the other hand, fluctuate in direct difference between cost costing and cost accounting variable to changes in output.

In a production facility, labor and material costs are usually variable costs that increase as the volume of production increases. It takes more labor and material to produce more output, so the cost of labor and material varies in direct proportion difference between cost costing and cost accounting variable the volume of output.

For many difference between cost costing and cost accounting variable in the service sector, the traditional division of costs into fixed and variable does not work. Typically, variable costs have been defined primarily as "labor and materials. It is, therefore, a fixed and not a variable cost for these difference between cost costing and cost accounting variable. There is no hard and firm rule about what category fixed or variable is appropriate for particular costs.

Cost accounting

The cost of office paper in one company, for example, may be an difference between cost costing and difference between cost costing and cost accounting variable accounting variable or fixed cost since the paper is used in the administrative offices for administrative tasks. For another company, that same office paper may well be a variable cost because the business produces printing as a service to other businesses, like Kinkos, for example. Each business must determine based on its own uses whether an expense is a fixed or variable cost to the business.

In addition to variable and fixed costs, some costs are considered mixed.

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