Doubt in Cost accounting system
Can someone clearly explain with examples how reconciliation is done between cost nd final accounts profits !
Take any of the profits as base...Then analyse the reason for variance .Then check it's impact in profit of the books we have taken as base.... For eg:- if you are taking cost books as base...Start from the profit of cost records.... 1. Factory overhead over absorbed 2000 Analyse this one. More expense is absorbed in cost records and so profit in cost records are understated..Therefore add it with the profit... So analyse each item and it's impact in profit then reconcile