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Cost
Accounting Basics
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What are the
cost accounting basics for a Cost
Accountant?
A
Cost Accountant usually is required to have a bachelor degree with a
major in accounting. Some companies require a CPA or CMA
designation.
How does a product or service get
a cost?
Most
products and services consist of three costs: material costs,
direct labor costs, and burden costs.
-
Material
costs are costs of all materials purchased to make a part.
These
may include steel, bolts, plastic, etc.
- Direct
labor costs are the wages for the people
who add value to
the product or service. These are assemblers, welders,
machine operators, etc.
- Burden
costs are costs to run the plant or business and include
maintenance wages, truck driver wages, utility costs, benefit costs,
etc. Burden is applied to a product or service based on an
allocation formula.
Who
uses Cost Accounting?
- Cost Accountants in their everyday
work
- Controllers and managers use cost reports to
manage efficiency
- Sales people and engineers use it to price new
work
- Department supervisors use cost reports to
manage their areas
Further understanding of cost accounting
What
is Cost Accounting?
Accounting
Costs
Cost
Accounting Methods
Understanding
Cost Accounting - Cost Accounting Types
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