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Costing is a procedure of assigning costs to any product or goods of a company. Generally the cost includes variables like cost of labour, cost of distribution and selling, costs of materials, taxes and administrative costs and factory overhead. Achievement of good control on the manufacturing system of the factory keeps costs at a minimum level and a smooth production is done with an uninterrupted schedule. It is basically a process of determining costs. It is an accounting method in which various budgets and standards were established and cost accountancy is a practice of costing and cost accounting. Students looking for various notes regarding costing and control of factory can refer Costing and control of factory Assignment Help where the objectives, importance and different methods has been explained thoroughly.
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The objectives of Costing and control of factory is given in Costing and control of factory Assignment Help
• In a factory cost controlled can be done by managing all the manufacturing materials, labour expenses, conduct the performance management and overall planning process.
• It requires the essential knowledge about key costing, budgeting, including the areas of quality control and research.
• Processes and practices such as Total Cost of Ownership (TCO) and Target Cost Management (TCM) are used to control manufacturing cost in the factory. Both are cost controlling practices.
• All the manufacturing equipment related costs like installations, maintenance, operations etc were being identified in the companies using TCO whereas in the TCM procedure it only measures manufacturing performance whether manufacturing costs were within targets.
• It records income and expenditure related to production of goods and services.
• It provides the statistical data on the basis of which future estimates are prepared and submitted.
Importance of costing and control of factory given in Costing and control of factory Assignment Help are:
• Cost controller in the factory helps in improving the manufacturing process and product quality and helps in achieving organizational objectives.
• Costing is important in business as it helps in making decisions of the companies which keeps the department in budget and maximum profits in future.
There are two methods which are used in the costing process and is explained in Costing and control of factory Assignment Help, they are
1. The FIFO (first-in, first-out) method: It is the cost valuation method where the first products which are been purchased are the first products that are been sold. This method comes under the GAAP (generally accepted accounting principles).
2. The LIFO (last-in, first-out) method: Under the LIFO process flow the recent costs which are been assigned to the products are the first costs expenses when the products are been sold with that cost. This process is rarely practiced in companies.
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