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  Essentials of Costing System

Essentials of a good Costing system

For accruing of maximum advantages, a good costing system should possess the following features:

A. Costing system that is adopted in any organization should be appropriate to its nature and size of the business and its information requirements.

B. A costing system should be like that it is economical and the advantages derived from the same should be more than the cost of operating of similar.

C. Costing system should be easy to operate and understand. Not necessary complications should be avoided.

D. Costing system should make sure appropriate system of accounting for material, labour and overheads and there should be correct classification made at the time of recording of the transaction itself.

E. Before designing a costing system, requirements and aims of the system should be identified.

F. The costing system should make sure that the final purpose of ascertaining of cost as precisely possible should be achieved.

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