Difference between cost and expense

In manufacturing accounting, it is very much important to have a clear difference between cost and expense, though in general two terms are considered interchangeable. What is Cost Cost? The amount of cash paid or liability incurred for a commodity or service is referred to as the cost of that item. The commodity or service … Read more

Cost accounting formulas

The following formulas can be used to find out different costs. Prime cost = Direct material consumed + Direct labour Conversion Cost = Direct material + Factory overhead Factory cost = Direct material + Direct labour + Factory overhead Cost of Goods Manufactured = Direct material consumed + Direct labour + Factory overhead + Opening … Read more