The financial data used in cost accounting can aid decision making, improve performance, and significantly reduce costs regardless of the type of organization that is using it – although it is commonly thought of as a school of accounting used in manufacturing. Improved performance from decreased cost, or improved profit is an important element in business as well, therefore cost accounting is a strong competitive advantage for management of a company.
What is Cost Accounting?
Functions of Cost Accounting
Concept of Cost
Elements of Cost in Cost Accounting
Types of Costs in Cost Accounting
Allocating Indirect Expense
Material and Labor
Compiling Cost Data
Costs by Financial Statement Classification
Cost Systems & Methods in Cost Accounting
Creating a Cost System
Estimating Cost System
Departmental Cost System
Special Order System – Productive Labor Method
Special Order System – Process Method
Employee Time Reports
Product System – Productive Labor Method
Product System – Machine Method
The origins of cost accounting started in the Industrial Revolution and was employed by management to monitor fixed and variable costs in the factories which were so prevalent at the time. There are many principles to cost accounting that maximize the efficiency of a business and its production capacity. These can be highly useful in a business to reduce the cost of production. The examples given are mostly manufacturing related, however it is noted that these principles can be applied to several different, abstract types of business fundamentals.
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