Cost Accounting: Meaning, Nature, Function, Importance and Features

Cost accounting is a business activity that involves recording, examining, summarizing, and studying the costs incurred by the company on any process, service, product, or other aspect of the business. This assists the organization in cost control, strategic planning, and decision-making to improve cost efficiency. Such financial accounts and ledgers provide management with visibility into their costs. Management understands where they need to cut costs and where they need to boost spending, which aids in the development of a vision and future strategy. There are several types of cost accounting, including marginal costing, activity-based costing, conventional cost accounting, and lean accounting. In this article, we will go over more objectives, benefits, prices, and the meaning of expenses.

Features of Cost Accounting

• It is a sub-field in accounting. It is the process of accounting for costs
• Provides data to management for decision-making and budgeting for the future
• It helps to establish certain standard costs and budgets.
• provides costing data that helps in fixing prices of goods and services
• Is also a great tool to figure out the efficiency of a unit or a process. It can disclose a waste of time and resources

Types and Classification of Cost Accounting

• Activity Based Costing: 
• Lean Accounting
• Standard Accounting
• Marginal Costing

Importance and Objectives of Cost Accounting

• Classification of Cost
• Cost Control
• Price Determination
• Fixing of Standards

Advantages

• Measuring and Improving Efficiency
• Identification of Unprofitable Activities
• Fixing Prices
• Price Reduction
• Control over Stock
• Evaluate the Reasons for Losses
• Aids Future Planning