Vocabularies of Costing:

                Cost Accounting is a sub discipline of Accountancy. That sub discipline tell us who to cost a product or service and the whole accounting activity. Cost Accounting working parallel with Managerial Accounting another sub discipline. Both sub disciplines have a very waste vocabulary some of the important vocabularies of cost accounting are here which is very vital to know every one for his professional and daily life use. All the cost accounting based on these important vocabularies that helps the users to know the costs with their real affects and correlation among the activities in the  cost accounting. 

 There are many good understandable definitions available in many other books but I tried my best to make them shorter and understandable for every one like the new comers in this field.But the conciseness of these vocabularies can not reduce their importance in the cost accounting every vocabulary is important on the basis of the accounting transactions when occur. We need to just follow the basic idea behind them that helps us to understand the core concept.   

Controllable Costs:

                All those costs which are under the management control or fixed costs for them are known as controllable costs.

Non-Controllable Costs:

                All those costs which are beyond the management control or not the fixed costs for them during the production operations are call the non-controllable costs.

Avoidable Cost:

                All those costs which are eliminated by the production team and they separate them from the production operations are called the avoidable costs.

Committed Costs:

                All those costs which will in the line to be concurred or management agreed over them to use them during the production operation are known as committed costs.

Incremental Costs:

                New or additional costs which are added to a management decision for production are called the incremental costs.

Differential Costs:

                Differential Costs is the variance of Total Occurred cost and Total decisions of Committed cost.

Engineered Costs:

                Those costs which have the direct relationship with the production and to maintain some effectively or efficiency in a production process to maintain the quality or quantity are known as engineered costs.

Discretionary Costs:

                Those costs which occurred due to some uncertainty that can be capital cost to make a level between the required quantity and quality.

Outlay Costs:

                Outlay Costs are those capital expenditures which are occurred and the company knows about them and they are maintaining them.

Opportunity Cost:

                Choosing on sufficient cost form many available alternatives is known as opportunity cost.

Economic Cost:

                Economic Cost is the sum of the explicit and implicit costs.

Imputed Cost:

                That is the hidden cost not incurred directly and known as imputed cost.

Relevant Cost:

                Relevant Cost is a cost that will occur in future and company knows about it and they commit about it are known as relevant cost.

Sunk Cost:

                Sunk cost are those cost which are already paid or not recoverable are known as sunk costs.

Historical Cost:

                Those cost which are paid in past for an asset.

Joint Cost:

                Those cost incurred before the split-off point in a production operation.

Separable Cost:

                Those cost incurred after the split-off point in a production operation.

By-Products:

                Those products which are the part of the same production process these are greater value and quantity products.

Normal Spoilage:

                That means the spoilage which are known during the production process and acceptable to the management are known as normal spoilage.

Abnormal Spoilage:

                That means the spoilage which is not acceptable to the management because they are more than the normal allowed spoilage during the production process.

Rework:

                That means those defective products which need some more efforts to become the part of goods available to sales or cost of goods sold.

Scrap:

                Scrap needs more raw materials to become complete.

Waste:

                That means those goods are raw materials which not completed as they need and there is not further option available over them for rework or to use them as scrap.

Carrying Cost:

                The products maintenance cost is known as carrying cost.

Transferred Cost:

                The cost that occur over the delivery of products or from one-unit to other production unit are known as transferred cost.

Value Added Cost:

                That Cost that added some values to the manufactured products are known as value added cost.

Normal Capacity:

                Normal Capacity is known as the level of capacity which is acceptable for production according to the production policies and government regulations.

Practical Capacity:

                Practical Capacity is known as the level of capacity at which a production plant can easily operate.

Theoretical Capacity:

                The Level of Capacity at which the maximum level of production expected.

“The Vocabularies are taken from the books of Gleim’s book 15^th edition which is a very helpful study material tool for the students and professional certification  in Managerial Accountancy seekers.”