cost acconting
Cost Accounting Fundamentals
Introduction to Cost Accounting
Cost accounting is an internal reporting system for an organisation’s own management for decision making. It is the process of accounting for costs. It includes the accounting procedures relating to recording of all incomes and expenditures and the preparation of periodical statements and reports with the object of ascertaining and controlling costs. It is thus the formal mechanism by means of which cost of products or services are ascertained and controlled.
Cost account is a tool of management that provides detailed records of costs relating to products and services. It also classifies, analyses and interprets cost. It mainly deals with use of costs, planning costs and the control of cost. Cost accounting is both a discipline and process in terms of it being a discipline, it is the branch of accounting. As a process, it entails classification of costs based on their common characteristics.
Cost accounting is a process of collecting, analysing, summarizing and evaluating various alternative courses of action. Its goal is to advise the management on the most appropriate course of action based on the cost efficiency and capability. Cost accounting provides the detailed cost information that management needs to control current operations and plan for the future.
Since managers are making decisions only for their own organization, there is no need for the information to be comparable to similar information from other organizations. Instead, information must be relevant for a particular environment. Cost accounting information is commonly used in financial accounting information, but its primary function is for use by managers to facilitate making decisions. Cost accounting is often used within a company to aid in decision making, financial accounting is what the outside investor community typically sees. Cost accounting can be most beneficial as a tool for management in budgeting and in setting up
Introduction to Cost Accounting
Cost accounting is an internal reporting system for an organisation’s own management for decision making. It is the process of accounting for costs. It includes the accounting procedures relating to recording of all incomes and expenditures and the preparation of periodical statements and reports with the object of ascertaining and controlling costs. It is thus the formal mechanism by means of which cost of products or services are ascertained and controlled.
Cost account is a tool of management that provides detailed records of costs relating to products and services. It also classifies, analyses and interprets cost. It mainly deals with use of costs, planning costs and the control of cost. Cost accounting is both a discipline and process in terms of it being a discipline, it is the branch of accounting. As a process, it entails classification of costs based on their common characteristics.
Cost accounting is a process of collecting, analysing, summarizing and evaluating various alternative courses of action. Its goal is to advise the management on the most appropriate course of action based on the cost efficiency and capability. Cost accounting provides the detailed cost information that management needs to control current operations and plan for the future.
Since managers are making decisions only for their own organization, there is no need for the information to be comparable to similar information from other organizations. Instead, information must be relevant for a particular environment. Cost accounting information is commonly used in financial accounting information, but its primary function is for use by managers to facilitate making decisions. Cost accounting is often used within a company to aid in decision making, financial accounting is what the outside investor community typically sees. Cost accounting can be most beneficial as a tool for management in budgeting and in setting up