Meaning of cost accounting
it is a process of via which we determine the cost of goods and services.it involves the recording classification allocation of various, expenditures and creating financial statement. In other words, Cost accounting is a process of finding out the cost of the products or goods. Cost account helps to understand the pricing value of the products or goods.
Objectives of Cost Accounting
Process of Accounting for Cost
Cost accounting is a process of recording the income and expenditure of the organization. Objective of cost accounting is to find out the cost. cost includes raw material cost, labour cost, fixed cost and other cost which is related to the production.
Records Income and Expenditure
Cost Accounting records income and expenditure which is related to production. cost accountant constantly track and analyze the per-unit cost of the product. so that the true and fair cost of production will find out.
Provides Statistical Data
Cost Accounting provides statistical data for analysis and interpretation of cost in production. It helps in proper and efficient planning and also helps in the preparation of the budget.
Helps in Cost Control
Cost Accounting helps in cost control. Cost control a process of identifying and reducing business expenses. so the profit of the organization increase. cost accounting comparison of Actual cost with Standard cost and find out the problems. Then corrective measures are taken into steps.
Preparation of Budget
Budget is the estimation of income and expenditure over a period of time. Cost accounting provides statistical data for the preparation of the budget and proper and efficient planning.
Comparison of Actual with Standard
We make standard cost in budget and planning. But cost accounting provides the data and the correct information of the actual cost. So that we can Compare of Actual cost with the Standard cost.
Presentation of Correct Information
Cost accountant regularly track and analyze the cost of the product. Cost Accounting provides the raw data. Data processing convert the raw data into information. Hence Cost Accounting is present of Correct.
Helps in Decision Making
Cost Accounting helps managers to decide. It provides the information to management related to production. That helps to take decision and planning for future.