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Accounting for Non-Accountants, 9th Edition by David Horner

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07

An introduction to business costing

Introduction

A business will only earn a profit if its revenue earned exceeds the costs and expenses that the firm incurs in generating sales. Profits can be increased if either sales can be increased or costs can be reduced. Therefore knowledge of the costs that are generated through business activity is particularly important for the profitability of the business.

Costing as a distinct accounting topic for study is concerned with the analysis of costs incurred by the business – not only past and present costs but also expected future costs. Costing is normally concerned with the generation of information internal to the business – that is, not for publication. The costing information generated will be ...

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