The 5th step of the cost accounting cycle is the determination of the selling price. Per unit Cost= Cost of goods sold/Total number of units sold In this step, the business determines the per unit product cost by dividing the cost of goods sold by the total number of units sold. ![]() ![]() It determines the per-unit cost of a commodity after determining the total cost. The 4th step of the cost accounting cycle is the determination of per-unit cost. The cost of goods sold means the amount of all expenditure items incurred for the goods sold in production.Ĭost of goods sold = Prime cost+ Factory Overhead + Opening WIP-Closing WIP + Administrative Overhead + Opening Finished Goods – Closing Finished Goods ![]() In this step, cost accounting measures the cost of goods sold for a product. The 3rd step of the cost accounting cycle is the determination of total cost. In this step, cost accounting classifies the cost according to function, nature, and behavior of cost. The 2nd step of the cost accounting cycle is the classification of cost. ![]() Cost accounting first ascertains and records the cost of a product to determine the product’s cost quickly. The 1st step of the cost accounting cycle is recording cost data. The six (6) steps of the cost accounting cycle are as follows: The cost accounting cycle involves data recording, classification, overall cost calculation, unit cost determination, sale price determination, cost management, and decision-making.
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