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NTA UGC NET 2019 UNDERSTANDING COSTS & ACCOUNTING By:- Assistant Professor (Ms.)Ashima Negi Candidate For Doctorate ( Ph.D.) UGC NET-Management. CA(1), MBA Finance, BBA, PGDM-Materials Management, NCFM, & Assurance, cCIBL. TQM & ISO 9000, QS 9000
CONTROL ABILITY By control ability: controllable, uncontrollable costs. Controllable costs are those which can be controlled or influenced by a conscious management action. Uncontrollable costs cannot be controlled or influenced by a conscious management action
NORMALITY By normality: normal costs and abnormal costs. Normal costs arise during routine day-to-day business operations. Abnormal costs arise because of any abnormal activity or event not part of routine business operations. E.g. costs arising of floods, riots, accidents etc.
TIME COSTS By Time: Historical costs and predetermined costs. Historical costs are costs incurred in the past. Predetermined costs are computed in advance on basis of factors affecting cost elements. Example: Standard Costs
DECISION MAKING COSTS . By Decision making Costs: These costs are used for managerial decision making.And these are: Marginal costs: Marginal cost is the change in the aggregate costs due to change in the volume of output by one unit. Differential costs: This cost is the difference in total cost that will arise from the selection of one alternative to the other . . Opportunity costs: It is the value of benefit sacrificed in favor of an alternative course of action. Relevant cost: The relevant cost is a cost which is relevant in various decisions of management. Replacement cost: This cost is the cost at which existing items of material or fixed assets can be replaced. Thus this is the cost of replacing existing assets at present or at a future date. Shutdown cost:These costs are the costs which are incurred if the operations are shut down and they will disappear if the operations are continued Capacity cost: These costs are normally fixed costs. The cost incurred by a company for providing . . roduction, administration and selling and distribution capabilities in order to perform various unctions. . Sunken cost: cost already incurred
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