Cost Pool: A One Stop Shop to All Questions
What is Cost Pool? A cost pool is pooling or clubbing together of expenses from various service lines basis certain cost drivers. These pools are further allocated to products …
Costing Terms
Appraisal Cost: Simplified Like Never Before
What is ‘Appraisal Cost’? In the common parlance, appraisal cost typically refers to expenses borne by home sellers. A house seller hires a professional appraiser to ascertain the market …
Carrying Cost: Why You Shouldn’t Avoid It?
What is Carrying Cost? Simply put, carrying cost is the cost a business incurs for “carrying” or storing inventory. Any business is required to maintain a minimum quantity of …
Controllable Cost; Decoded With Illustration
What is a Controllable Cost? As the name suggests, a straightforward definition of controllable cost are costs which can be controlled. Such costs are controllable in the short run …
Cost Leadership – The Why & How of It
What is Cost Leadership? Cost leadership is a competitive strategy that businesses leverage by reducing their costs to the maximum extent possible to enhance profits. In this era of …
Process Costing- A Guide with Illustrations
What is Process Costing? Process costing is a subset of operation costing typically applicable to manufacturing entities mass-producing a homogeneous product. It is a GAAP approved system of costing. …
Production vs Manufacturing – All You Need To Know
Production and manufacturing are usually understood to be the same and used interchangeably when referring to creating goods. However, production and manufacturing have minor differences among them regarding the …
Just in Time – Meaning, Features, Advantages and More
Just in Time (or the JIT) is an inventory management system that aims to make production super-efficient. Under this, the raw materials and labor are planned to arrive as …
Pareto Principle
The Pareto Principle derives its name from a respected economist Vilfredo Pareto. This principle states that 80% of the consequences are a result of 20% of the causes. Hence, …
Cost Accounting Systems – Meaning, Importance And More
Manufacturers use cost accounting systems to keep a tab on the production activities using a perpetual inventory system. In simple words, the cost accounting system is meant for simplifying …
