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It is the main objective of cost accounting to know the cost of a product, process, or service.Īs businesses aim to derive maximum profit from their activities, it is necessary that they earn revenues greater than the costs. Major objectives of the costing system are: The information derived from cost accounting is also valuable for internal company operations, making strategic decisions, and analyzing the trends. It is a significant process for tax purposes as well. The main objective of cost accounting is to document and analyze the ways in which a business spends its resources, mainly, cash.

Must read: Financial Accounting for SSC CGL GK notes! Objectives of Cost Accounting Through cost accounting, businesses are able to understand the detailed cost information with which they can control current operations and plan and prepare for the future. Likewise, the management will be able to analyze on how to optimize the business practices and processes to achieve optimum cost efficiency and capability. It is done to provide the management with the end results of the costs involved in a business. Similarly, cost accounting is also a practice of cost regulating the productivity of a business concerned with the application of accounting guidelines, process, and rules.Ĭost accounting is a systemized approach of recording and reporting cost measurements in the process of manufacturing goods and performing services in the aggregate and in-depth.Ĭost accounting includes systems for recognizing, classifying, allocating, aggregating, and reporting the costs and then comparing them with the standard costs. We know that accounting is a process of collecting and maintaining financial records of each income and expenditure. Let’s begin with understanding the meaning and concept of Cost Accounting.įind out UPPCL Assistant Accountant Recruitment 2021 details here! Meaning & Concept of Cost Accounting Accounting aspirants looking for the best Cost Accounting study material will be able to find all the relevant and interesting information regarding the topic in this page. In the following Cost Accounting study notes, our experts have summarized all the crucial aspects covering the topic with respect to its meaning, objectives, importance, and so on.