Financial Management

4

Cost Concepts for Managers

“Cutting costs without improvements in quality is futile.”

 

W. Edwards Deming

 

Forbes, April 4, 1988

LEARNING OBJECTIVES

After reading the chapter, you will be able to:

1. Understand the fundamentals of cost concepts.

2. Define the elements of manufacturing cost.

3. Identify the types of costing systems.

4. Understand the cost concept of standard costing.

5. Understand the basics of variance analyses.

6. Look at the approaches to costing.

7. Understand the concept of budgeting.

FINANCE IN PRACTICE

Tata Motors, formerly called Telco (Tata Engineering and Locomotive Company Limited), was incorporated on September 1, 1945, at Jamshedpur when Tata Sons took over “Singhbhum Shops” from the erstwhile East India Railways to produce ...