What are the Costs? The costs correspond to all the costs incurred by the company during the whole process of production of a good or service. Characteristics of Costs Costs refer to all costs and expenses incurred by a company in the process of producing a product or service dedicated to sales. The activities of the […]
Difference between Costs and Expense
Difference between Cost and Expense This article explains the Difference between Cost and Expense within business administration. In all enterprises there are activities that reduce the equity: wages are paid, goods and raw materials are purchased, rents and taxes are paid, etc. In general, such activities would generally be called cost. In the commercial sector, […]
What is Absorption Costing Method
Absorption Costing Method ? Absorption costing means that all of the manufacturing costs are absorbed by the units produced. In other words, we can say that the cost of a finished unit in inventory will include direct materials, direct labor, and both variable and fixed manufacturing overhead. Accordingly, absorption costing is also referred to as […]
What is Job Order Costing with Example
Job Order Costing: Job order costing is a cost accounting system in which direct costs are traced and indirect costs are allocated to unique and distinct jobs instead of departments. It is appropriate for businesses that provide non-uniform customized products and services. Job order costing is one of the two main cost accounting systems, the […]
Difference between Financial and Management Accounting
Difference between Financial and Management Accounting: There are two broad types of accounting information: Financial Accounts: geared toward external users of accounting information. Management Accounts: aimed more at internal users of accounting information. Although there is a difference in the type of information presented in financial and management accounts, the underlying objective is the same […]