1, Define cost Accountancy

Answer: 
     “ The application of costing and cost accounting principles, methods and techniques. It is also the science, art and practice of controlling the cost and the ascertainment of profitability. Cost accountancy is mainly concerned with the presentation of costing data to the management in a precise form so that vital decision can be taken by the management.”

2, Define costing:

Answer:
     Costing is simply cost finding. It is defined as “ The technique and process of ascertaining costs”. It has also been defined as “ the classifying recording and appropriate allocation of expenditure of these costs to sale value and the ascertainment of profitability”. Thus costing includes all the principles, rulers and regulation for calculating the costs.

3, Define cost accounting:

Answer: 
     It is defined as “ the application of accounting an costing principles,. Methods and techniques in the ascertainment of costs and the analysis of savings and or excesses as compared with previous experience or with standards.

4, What is cost control?

Answer: 
     Cost control is defined as the regulation by executive action, of the costs of operating an undertaking. It is the function of keeping costs with in prescribed limits.

5, What is meant by cost audit ?

Answer:  
     Cost audit is defined as the verification of cost accounts and a check on the adherence to the cost accounting plan. It has thus two functions.
a) To verify that the cost accounts have been correctly maintained and complied and b) to check that principles laid down have been properly followed.

6, Distinguish between costing and cost accounting ?

Answer: 
(i) Costing is concerned with ascertainment of cost whereas cost accounting is concerned with recording of cost.
(ii) Costing begins where cost accountancy ends but cost accounting begins where costing ends.

7, State the objectives of cost accounting.

Answer: 
( i ) Ascertainment of cost
(ii ) Control of cost
(iii) To provide a basis for business policy.
(iv) Determination of selling price.
(v) To provide data for cost reduction.

8, write short note on Ascertainment of a cost accounting.

Answer: 
     This is the primary objective of cost accounting for the purpose of ascertaining the cost of products or service . It is necessary to record the expenses incurred classify them properly and then allocate it amongst the respective products or services transport etc, for calculating total cost of each of these. It there is only one product, cost per unit can be computed by dividing the total expenditure by the total number of units produced. But if there are many products manufactured then the cost is to be split up between the various technique such as unit costing ( like washing machine cycle etc ) may be used.

9, Explain the object of control of costing ?

Answer: 
     Cost control aims at improving efficiency by controlling and reducing cost. Budgetary control and standard costing are two important cost accounting techniques which are used to control cost. These techniques set standard for the consumption of materials, use of labour and for expanding the over heads and then compare those standard and comparing than with actual t find variation, analyzing the variations and taking up corrective action etc, cost control is becoming increasingly is important because of growing competition.

10, How will cost accounting provide a basis for business policy ?

Answer: 
    Cost accounting aims at serving the needs of management in conducting the business with utmost efficiency. Cost data to great extent helps the management in formulating the policies of a business and in decision making. Hence availability of cost data is a must for all levels of management.

11, What are the decisions which are based on cost data ?

Answer: 
a) Introduction of a new product
b) Utili section of unused plant capacity
c) Replacement of existing machines by automatic machine
d) Making or buying component parts from outside suppliers
e) Selling below cost.

12, Explain object of cost Accounting regarding the determination of selling price.

Answer: 
    Cost accounting provides information on the basis of which selling prices of product or services may be fixed. Total cost of production constitutes the basis on which selling price is fixed by adding a margin of profit. Cost Accounting furnished both total cost of production as well as cost incurred at each and every stages of production. In fixation of selling price, other factors are also important such as market condition, the area of distribution, volume of sales etc, But no doubt, cost plays the domination role in rife fixation.

13, Why cost accounting is necessary to provide data for cost reduction ?

Answer:  
    For survival in the world competition, It is necessary to keep the prices of production is less. So the management has to make continuous efforts to reduce the cost. To provide data for cost reduction is one of the important objectives of cost accounting. It helps the management in finding out new and improved methods to reduces costs.

14, State any two objectives of cost accounting.

Answer:  
(i) Cost accounting enable manage to ascertain the cost of a product, job or operation in a systematic way.
(ii) Cost accounting provides useful cost data for fixing the selling price of a product. By dividing the expenses into fixed and variable components it helps management to fix the price of a product in a scientific manner.

15, Discus the similarities between cost accounting and financial accounting.

Answer: 
     Both cost accounting and financial accounting are concerned with systematic recording and presentation of financial data. The two systems rest on the same principles concerning debit and credit and have the same sources of recording the transaction.

16, State two points of difference between cost accounting and financial accounting.

Answer: 
(i) In financial accounting transactions are recorded for definite period which are related to business where as in cost accounting transactions are identified with cost units which are related to manufacturing and sales of products and services
(ii) In financial accounting, stock is valued at cost or market price which ever is less while in cost accounting stock is valued at cost ie, cost of production.

17.  What is service cost centre ?

Answer:
     Service cost centres are those which provides service to other cost centres et., boiler house, power house, stores house, maintenance etc,

18. What do you mean by personal cost centre ? 

Answer: 
     They consist of a person or a group of persons. The cost may be accumulated by individual like works manager, foreman storekeeper, sales manager etc,

19. What is ( a ) Impersonal cost centre (b) process cost centre.

Answer: 
A ) Impersonal cost centre : They a refer to a location or item of equipment eg. Machine or store room.
B) Process of cost centre: They consist of a specific process or a continuous sequence or operations. 

20. What is meant by operation cost centre ?

Answer: 
    They consist of machines and/or persons carrying out similar operations eg machines and operatives engaged in welding, turning or machining