Meaning of Cost Accounting
It is a process 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.
Scope of Cost Accounting
Ascertainment of cost
Cost Accounting deals with the Ascertainment of cost. it gives a true and fair view of the actual cost involved in the different process in the organization. manager have detail information regarding cost and easily regulate the control as per the budget this helps in true ascertainment of the cost.
Provides a Basis for future
Cost Accounting collects the detail information regarding the cost of different department of the organization. Manager uses this collected information for prediction the actual cost of future operations. This true ascertainment for batter plan to achieve the goals.
Cost account helps in the estimation of the actual cost. Manager can use this information in controlling the cost and ensure that all activities goes to predetermined budget manager can take necessary action to control whenever anything goes out of the budget.
Budgeting and Budgetary Control
Cost accounting has an important role in deciding the budget it collects information regarding cost form different sources within the organization. This information is analyzed by the manager to design the optimum budget. It is insured by the manager that all expenses go within the decided budget and if necessary action are taken to control the cost
Cost Accounting has an important role in performing the audit of different cost. An auditor can easily acquire all relevant information through the data aquire by cost accounting. It makes comparison and verification of various data easy an error can be deducted
Cost accounting provides the data of actual expenditure and income. So we compare the actual cost with the standard cost. To find out the cause of difference and corrective measure will be taken.
cost accounting provides all information to the manager for effective decision making. Manager analyzes the data acquired by cost accounting and formulate the plan and policies. It helps the manager in better understanding by depicting the true and fair picture of the organization. Manager can take best suited decision as per the organization need to drive the maximum result
Search an Article