Wednesday, 6 May 2015

COST ACCOUNTING AND ITS IMPORTANCE

What is Cost Accounting:-

  • It is a type of accounting process that aims to capture a company’s cost of production by assessing the input costs of each step of production as well as fixed costs such as depreciation of capital equipment.
  •    Cost accounting is the process of collecting, analyzing, summarizing and evaluating various alternative courses of action. Its goal is to advise management about the most appropriate course of action. Cost accounting provides the detailed cost information that management needs to control current operations and plan for the future.

Importance Cost Accounting:-

 Control of  Materials Cost
·         Control of  Labour Cost
·         Control of  Overheads
·         Measuring Efficiency
·         Budgeting
·         Price Determination
·         Curtailment of loss during off season
·         Expansion
·         Arriving at decisions(decision making)

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