COST ACCOUNTING INFORMATION AND PRICE DETERMINATION

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ABSTRACT

 

This study is designed to provide knowledge for costing information and price determination.

The need for cost accounting came with increased industrialization, engineering an expansion in manufacturing.  It is therefore obvious that in efficient system of costing is essential for industrial control.

In period of boom, manufacturers are able to show profit notwithstanding the leakage which pass unchecked, but in periods of trade competition concealed inefficiencies have to track down and rigorous control must be exercised to ensure even modest margin profit.

There is not yet an agreed best method of costing products though it may be helpful to recognize that cost allocation are being used to obtain a mutually acceptable price and not necessary to portray caused and effect relationship of cost incurrence.   But price determination from cost under efficient operation through efficient cost system will most probably approximate the price of the product to its value.

 

TABLE OF CONTENTS

CHAPTER ONE:

• Introduction

1.1     Statement of problem

• Purpose of study
• Significance of limitation of study
• Scope and limitation of study
• Definition of terms

 

CHAPTER TWO:

• Literature Review

2.1     Cost determination

• Cost Control
• Fixed and variable cost
• Natural and functional classification cost
• Other theoretical work on cost and pricing
• Price flexibility
• The Nature of Pricing problem
• Limitation of cost oriented price
• Cost bread pricing theories
• Price to achieve corporate objectives

 

CHAPTER THREE:

• Summary of Study

3.1     Discussion of findings

• Conclusion
• Recommendation

Bibliography

 

CHAPTER ONE

 

• INTRODUCTION:

Accountancy has been defined by GLAUTER and UNDERDOWN, in their book titled “Accounting theory and practice as “a reporting activity that forms part of any management information system.  In this regard, accountings is often explained as sciences of activities that are connected and form successive steps starting with observing, the collecting, recording, analyzing and finally communicating accounting information to its users.

The study of modern cost accounting yields insight regarding both accountants role and managers role in an organization because managers want to know how accountants measure performance and often depending upon accounting data for guiding their decisions.

Cost accounting has a major purpose of accumulating the cost of an organizations products and services.  This aspect is regarded as product costing purpose.

 

 

1.1     STATEMENT OF PROBLEM:

A view shared by previous researcher on this topic that there has been a shortfall in the utilization of cost accounting information in some organization and their pricing policy decision making.  It is right of this that this work attempt to suggest a good system which comprises a set of procedure, records and facilities that have to do with the systematic and routine compilation and dissemination of cost information and price determination.