Cost accounting, a branch of accounting, needs lots of practice to gain adequate proficiency in the subject. This subject is all about recording, classification, determination of the costs of products or services, and arranging data so that it can help management to keep costs under control. The students of accounting study this subject in the second or third year during their degree course.
They get lots of cost accounting homework from their college, and they need to spend a huge time on doing that homework. Teachers usually give them questions on real time scenario with numerous figure to compare. It needs lots of patience and attentiveness to do the homework correctly.
Differences between cost accounting and financial accounting
Both cost accounting and financial accounting are important financing tools. However, there are lots of differences between them. While doing cost accounting homework students need to keep in mind the following differences and proceed accordingly:
- Financial accounting teaches how to prepare reports on a company’s financial position for any financial year. In cost accounting, students learn to prepare reports on cost ascertainment.
- There is specific format for preparing a financial accounting. Students have to learn how to prepare a financial report following the generally accepted accounting principles or global financial reporting standards. However, there is no such specific standard for creating cost accounting reports.
- Financial accounting mainly considers reporting the performances and financial status of an entire business entity. To prepare cost accounting report, one considers individual products, product lines, geographical areas and customers. It compiles raw materials costs, processing costs, and cost of finished goods inventory.
- A financial report contains financial information which is recorded using the accounting system. Cost accounting report contains financial information as well as operational information.
Briefly, for doing cost accounting homework, students should keep in mind that their report should help the management in taking decisions on costs and expenditure.
What do students learn in cost accounting?
In this subject, students learn the technique of examining the cost structure of a business. For this, they collect information about the costs incurred by a company’s activities, assign desired costs to products and services, and other objects, and evaluate the effectiveness of cost usage.
The subject aims to develop the skill to identify the areas where a company can earn and lose money and provide necessary information to the managements to maximize profits in the future.
Key activities in cost accounting homework:
- To define costs as direct materials, fixed overhead, direct labour, variable overhead, and period costs.
- To assign all types of costs using an allocation method, except period costs to products and services and other cost objects.
- The way of transferring prices when a company sells components and parts from its one subsidiary to another.
- To examine the costs spent on various activities so that management could know if the company is utilizing its resources effectively.
- Students need to be very cautious while doing cost accounting homework. Whenever there is any change in the trend of different costs incurred they should note it and mention in the report.
- Careful analysis of costs which will affect the outcome of a business decision.
- To evaluate the necessity for capital expenditures.
- To prepare a budget model which will forecast changes in costs on the basis of expected level of activities.
- Calculating the costs which will be used in manufacturing a new product design.
- Analyzing production system to identify the positions of bottlenecks, and how they affect the throughput of the whole manufacturing system.
In cost accounting, students learn about the multitude of tools which are used in accumulating and interpreting costs. The tools include job costing, standard costing, process costing, direct costing, activity-based costing, and throughput analysis. Cost accounting reports are the sources of information for the financial statements, mainly for valuation of inventory. But it is true that the cost accounting reports do not contribute directly to the generation of financial statements.
Tips on cost accounting homework
Sometimes, students face many difficulties in cost accounting. But they can overcome the difficulties with little efforts. Teachers usually give the assignments after teaching a particular topic. Therefore, the students must thoroughly read their books and review the basics. They can also take the help of professional assistants who provide extra tutoring services on cost accounting and give guidance on topics in which the students are facing difficulties.
Nowadays, several excellent accounting software is available for the students which help them in doing their homework. Students can use the user-friendly application software for solving various types of problems. Like any other subject, a group discussion is a good option for doing cost accounting homework. They can share their ideas and reach a solution quickly.
Those, who are doing their degree through distance education program, can also opt for online tutorial service. The benefit of this service is that anyone can access a qualified teacher from any part of the world sitting at the home.