a) Cost Object- It is an activity, a product or a service, a customer, a project, a contract, a process or a department of the organization for which cost measurement is made.
b) Cost Unit- It is a device used for the purpose of breaking up or separating cost into smaller subdivisions. It is the unit of product or service in relation to which cost may be ascertained.
c) Cost Centre- It is the smallest segment of activity or area for which costs are accumulated. These cost centers are the departments or sub-departments of an organization with reference to which cost is collected.
d) Cost Accumulation- It refers to the systematic process engaged by the organizations to collect cost data of its operations by using an accounting system.
e) Cost Methods- These are the methods which are used to ascertain the cost of production. Costing methods differ from industry to industry.
There are two types of Costing:
1) Job Costing
2) Process Costing
a) Contract costing
b) Batch Costing
c) Multiple Costing
a) Service Costing
b) Operation Costing
c) Output Costing