ROLE OF COST ACCOUNTING IN DECISION MAKING

(With reference to Parle Products Pvt. Ltd.)

A FIELD PROJECT REPORT SUBMITTED TO

SAVITRIBAI PHULE PUNE UNIVERSITY

IN THE PARTIAL FULFILMENT OF

THE REQUIREMENT FOR THE DEGREE OF
BACHELOR OF COMMERCE
IN THE COURSE OF
COST AND MANAGEMENT ACCOUNTING

SUBMITTED BY
YASHODA DHARAMSING GADSHILA
Class: S.Y. B.Com. Sem-III
Division: C
Roll No.: 1291 / Seat No.: 34199

UNDER THE GUIDANCE OF

ASST. PROF. YOGITA RENUSE

DEPARTMENT OF COMMERCE
MARATHWADA MITRA MANDAL’S COLLEGE OF
COMMERCE, DECCAN GYMKHANA, PUNE – 411004

OCTOBER 2025

Page | 1
 FIELD PROJECT CERTIFICATE

This is to certify that the project report entitled “Role of Cost Accounting in Decision Making
(with reference to Parle Products Pvt. Ltd.)” in the course (Specialization) Cost and Management
Accounting was prepared by Yashoda Gadshila, Class: SY B.Com., Sem-III, Div. C Roll No.
1291 University Seat No. 34199 under my guidance and supervision for the Academic Year
2025-26.

This Project Report is based on original study / field work carried out by him / her. Material /
Notes obtained from sources has been duly acknowledged in the Field Project.

This Field Project is submitted to Savitribai Phule Pune University in partial fulfilment
of requirement of SY B.Com. for the Academic Year 2025-26.

Place: Signature

Date: Name of the Field Project Incharge

VIVA-VOCE EXAMINATION

Date of Viva-Voce Exam: ____________ University Seat No. _______________

Name & Signature of Internal Examiner Name & Signature of External Examiner

Page | 2
 TABLE OF CONTENTS

Sr. No. Title Pg. No.

1. Title Cover Page Pg. 1
2. Field Project Certificate Pg. 2
3. Table of Contents Pg. 3
4. Chapter No. 1: Introduction Pg. 4 – 13
5. Chapter No. 2: Profile of the Organization Pg. 14 – 28
6. Chapter No. 3: Review of Literature Pg. 29 - 31

Page | 3
 CHAPTER NO. 1: INTRODUCTION

Every business organization aims to earn profit and operate efficiently in the competitive world.
To achieve these goals, proper recording, analysis, and control of costs are essential. Cost
accounting plays a vital role in providing useful information for managerial decision making.
In this project, I have studied the “Role of Cost Accounting in Decision Making with reference
to Parle Products Pvt. Ltd.” This study focuses on how cost accounting helps the management
of an organization to plan, control, and take effective decisions.

1. Introduction to Cost Accounting:

In today’s fast-paced business world, companies face constant pressure to remain profitable
while managing their resources efficiently. One of the most important aspects of running a
successful business is understanding the cost of producing goods or providing services.
Cost accounting is the branch of accounting that focuses on recording, analyzing, and
controlling these costs. Unlike financial accounting, which is primarily meant for external
reporting to investors, banks, or regulatory authorities, cost accounting is designed for
internal use by management to make informed decisions.

The main purpose of cost accounting is to determine the actual cost of each product or
service. It carefully tracks all expenses, including raw materials, labour, and overhead costs,
to give a clear picture of how resources are being used. This detailed cost information helps
management in setting product prices, planning production, and ensuring profitability. For
example, if a company discovers that a particular product is costing more to produce than
initially estimated, management can take steps to reduce waste, negotiate better rates for
raw materials, or improve labour efficiency.

Cost accounting is not just about calculating costs—it is also a powerful tool for controlling
them. By analyzing spending patterns and comparing actual costs with standard or budgeted
costs, businesses can identify inefficiencies and areas where savings are possible. This
process, known as cost control, helps organizations improve operational efficiency,
optimize resource allocation, and prevent unnecessary expenses.

Another important aspect of cost accounting is its role in planning and decision-making.
Businesses can use cost data to prepare budgets, forecast future expenses, and evaluate the
profitability of different products or services. For instance, a company may use cost
accounting information to decide whether to launch a new product, discontinue an
unprofitable line, or expand production of a high-demand item. By providing this kind of
actionable insight, cost accounting supports strategic decisions and long-term business
planning.

In simple terms, cost accounting acts as a guide for management to understand how money
is being spent, how efficiently resources are being used, and where improvements can be
made. It ensures that business operations are cost-effective and that profits are maximized
without compromising the quality of products or services. In modern business, where
competition is fierce and customer expectations are high, cost accounting has become an
essential tool for success. It allows companies to make smart decisions, maintain financial
discipline, and achieve sustainable growth.

Page | 4
2. Objectives of Cost Accounting:
Cost accounting is an essential tool for businesses to manage their expenses and make
informed decisions. Its primary objective is to provide management with detailed
information about the costs involved in producing goods or providing services.
Understanding these costs allows businesses to plan efficiently, control expenditures, and
maximize profitability. The objectives of cost accounting can be explained as follows:

❖ Determining the Cost of Production:

One of the main purposes of cost accounting is to calculate the total cost of
producing a product or service. This includes both direct costs, like raw materials
and labour, and indirect costs, such as rent, utilities, or administrative expenses. By
knowing exactly how much it costs to produce each item, businesses can identify
areas where resources are being used inefficiently and take steps to optimize them.
Accurate cost determination also forms the foundation for other managerial
decisions, such as pricing, budgeting, and resource allocation.

❖ Setting Appropriate Selling Prices:

Accurate cost information helps management establish the right selling price for
their products or services. Pricing is not just about covering the basic expenses; it
also needs to ensure a reasonable profit margin. If prices are set too low, the
company may incur losses, while prices set too high could drive customers away.
Cost accounting allows businesses to balance these considerations, ensuring that
products are competitive in the market while still profitable for the organization.

❖ Controlling and Reducing Costs:

Another important objective of cost accounting is cost control. By analyzing the
detailed breakdown of costs, management can identify inefficiencies, wastage, or
unnecessary expenditures. This analysis helps in implementing corrective measures
to reduce costs without affecting product quality. For example, a manufacturing
company may find that it is spending excessively on electricity due to outdated
machinery. By upgrading equipment or improving operational practices, the
company can save money and increase overall efficiency.

❖ Valuing Inventory Accurately:

Inventory is a critical asset for many businesses, and proper valuation is essential
for both internal decision-making and external financial reporting. Cost accounting
provides methods to value inventory accurately, whether through FIFO (First In,
First Out), LIFO (Last In, First Out), or weighted average cost methods. Accurate
inventory valuation ensures that the company knows the real worth of its stock,
which aids in planning purchases, production schedules, and overall financial
management.

❖ Comparing Actual Performance with Standards:

Cost accounting also helps in evaluating business performance by comparing actual
costs with standard or expected costs. These standards act as benchmarks, and any
deviations—known as variances—are analyzed to understand the reasons behind
them. If actual costs exceed expected costs, management can investigate and
implement corrective actions. This continuous monitoring ensures that resources
are being used effectively and that the business stays on track to achieve its financial
goals.

Page | 5
❖ Assisting in Decision-Making and Planning:
Beyond tracking and controlling costs, cost accounting provides valuable insights
for planning and decision-making. Management can use cost data to make strategic
choices, such as whether to launch a new product, discontinue an unprofitable
product line, or expand production. It also aids in preparing budgets and forecasts,
allowing the company to anticipate future expenses and allocate resources
efficiently.

Page | 6
3. Importance of Cost Accounting in Business:
Cost accounting is more than just recording expenses; it is a powerful tool that helps
businesses understand, manage, and optimize their costs. It provides valuable information
that guides management in making strategic decisions, improving efficiency, and
maximizing profitability. The importance of cost accounting in business can be understood
in several key ways:

❖ Understanding the True Cost of Business Operations:

Cost accounting breaks down all the expenses involved in producing a product or
service, including raw materials, labour, and overheads. By providing a clear picture of
where money is being spent, it helps businesses identify costly areas and understand
the overall cost structure. This understanding forms the basis for better planning and
effective cost control.

❖ Assisting in Decision-Making:
Accurate cost information allows managers to make informed decisions about pricing,
production levels, product lines, and investments. Whether deciding which products to
focus on, whether to make or buy certain items, or how to allocate resources, cost
accounting provides the necessary data to ensure that decisions are financially sound.

❖ Improving Profitability:
By identifying areas of inefficiency and unnecessary expenses, cost accounting helps
businesses reduce costs without compromising quality. Efficient use of resources,
reduction of waste, and cost control directly contribute to higher profit margins and
overall financial health.

❖ Supporting Planning and Budgeting:

Cost accounting provides historical data and cost trends that are essential for preparing
budgets and forecasts. Businesses can anticipate future expenses, set realistic financial
goals, and plan for growth. This proactive approach helps prevent overspending and
keeps the company aligned with its strategic objectives.

❖ Evaluating Performance:
Comparing actual costs with standard or budgeted costs helps in assessing business
performance. Cost accounting highlights areas where performance deviates from
expectations, enabling managers to take corrective action promptly. This continuous
monitoring ensures efficiency and accountability in operations.

❖ Facilitating Competitive Advantage:

Understanding costs in detail allows businesses to price their products strategically,
maintain profitability, and stay competitive in the market. Cost accounting also
supports long-term strategic planning by highlighting which products or processes add
the most value to the company.

Page | 7
4. Role of Cost Accounting in Decision Making:
Cost accounting is more than just tracking expenses; it's a strategic tool that helps
businesses make informed decisions, optimize resources, and enhance profitability. Here's
how it plays a crucial role in decision-making:

❖ Informed Pricing Decisions:

Cost accounting provides detailed insights into the costs associated with producing
goods or services. This information enables businesses to set prices that cover costs and
ensure desired profit margins. By understanding the cost structure, companies can make
pricing decisions that are both competitive and profitable.

❖ Evaluating Product Profitability:

Not all products contribute equally to a company's bottom line. Cost accounting helps
in analysing the profitability of each product by comparing revenues against associated
costs. This analysis aids in identifying which products are performing well and which
may need adjustments or discontinuation.

❖ Make-or-Buy Decisions:
When faced with the choice between producing an item in-house or purchasing it from
an external supplier, cost accounting provides the necessary data to evaluate both
options. By comparing the costs involved in each alternative, businesses can make
decisions that minimize expenses and maximize efficiency.

❖ Budgeting and Forecasting:

Accurate budgeting and forecasting are essential for effective financial planning. Cost
accounting provides historical cost data that serves as a foundation for preparing
budgets and predicting future expenses. This proactive approach helps businesses
allocate resources efficiently and avoid financial surprises.

❖ Cost Control and Efficiency:

Identifying areas of inefficiency and unnecessary expenditure is vital for maintaining
profitability. Cost accounting allows businesses to monitor costs regularly and
implement control measures to reduce waste and optimize resource utilization. This
ongoing process of cost control ensures that operations remain efficient and cost-
effective.

❖ Strategic Planning and Investment Decisions:

Long-term decisions, such as investments in new projects or expansion plans, require
careful financial analysis. Cost accounting provides detailed cost information that helps
in evaluating the financial viability of such decisions. By assessing potential costs and
returns, businesses can make strategic choices that align with their goals and ensure
sustainable growth.

Page | 8
5. Scope of Cost Accounting:
Cost accounting is a specialized branch of accounting that focuses on the calculation,
analysis, and management of costs associated with producing goods or services. Its scope
extends beyond mere cost determination to encompass various activities that aid in
effective financial management and decision-making. Here's how cost accounting
contributes to business operations:

❖ Cost Ascertainment:
The primary function of cost accounting is to ascertain the cost of products, processes,
or services. This involves identifying, measuring, and recording all costs incurred
during production, including direct costs like materials and labour, and indirect costs
such as overheads. Accurate cost ascertainment is crucial for pricing decisions and
profitability analysis.

❖ Cost Classification:
Cost accounting classifies costs based on their nature, behaviour, and relevance to
decision-making. Common classifications include:
a. Direct Costs: Costs that can be directly traced to a specific product or service,
such as raw materials and direct labour.
b. Indirect Costs: Costs that cannot be directly traced to a single product and are
shared across multiple products, like factory overheads.
c. Fixed Costs: Costs that remain constant regardless of production levels, such
as rent and salaries.
d. Variable Costs: Costs that change in direct proportion to production levels, like
raw material costs. This classification helps in understanding cost behaviour and
aids in budgeting and forecasting.

❖ Cost Recording:
Systematic recording of cost data is essential for tracking expenses and ensuring
accuracy in financial reporting. Cost accounting involves maintaining detailed records
of all cost-related transactions, which serve as the basis for financial statements and
performance analysis.

❖ Cost Control:
Cost accounting plays a vital role in controlling costs by setting standards and
comparing actual performance against these standards. It helps in identifying areas
where cost overruns are occurring and implementing corrective actions to maintain
profitability.

❖ Cost Reduction:
Beyond controlling costs, cost accounting aims at continuously finding ways to reduce
costs without compromising quality or performance. It involves analyzing all processes
and operations to identify and implement cost-saving measures.

❖ Cost Audit:
Cost audit refers to the verification of cost records and accounts, ensuring adherence to
cost accounting standards and principles. It ensures the accuracy and reliability of cost
data, providing confidence to management and stakeholders.

Page | 9
❖ Budgeting and Forecasting:
Cost accounting provides valuable data for preparing budgets and forecasts. By
analyzing historical cost data and current market conditions, businesses can develop
realistic projections of future costs and revenues, aiding in strategic planning and
resource allocation.

❖ Decision Support:
Cost accounting provides crucial data that supports managerial decisions relating to
pricing, budgeting, expansion, and cost control measures. It helps in evaluating the
financial implications of various decisions and selecting the most cost-effective
alternatives.

Page | 10
6. Need and Significance of the Study:
In today’s competitive business environment, companies face constant pressure to reduce
costs, improve efficiency, and maintain profitability. Cost accounting has emerged as an
essential tool that helps businesses achieve these objectives by providing detailed
information about the costs involved in production and operations.

The need for this study arises from the fact that many organizations, including those in the
service and manufacturing sectors, often lack precise knowledge about their cost structures.
Without proper cost information, management cannot make informed decisions regarding
pricing, resource allocation, or cost control. Studying the role of cost accounting in a real
company like Parle helps to understand how cost data is used in actual business operations
and how it supports decision-making in practice.

The significance of this study lies in its ability to highlight the importance of cost
accounting in the service and manufacturing processes. For a company like Parle, which
operates on a large scale in the food and beverage industry, effective cost management is
crucial to maintain product quality, competitive pricing, and profitability. This study
demonstrates how cost accounting provides managers with the necessary insights to plan
budgets, control expenses, and make strategic decisions.

Furthermore, the study helps students, researchers, and business managers understand the
practical application of cost accounting techniques in a real-world business setting. By
analyzing the cost practices of Parle, the study provides valuable knowledge on how cost
information contributes to efficiency, productivity, and long-term sustainability.

In simple terms, this study is important because it bridges the gap between theoretical
knowledge of cost accounting and its practical use in decision-making, making it highly
relevant for businesses aiming to improve operational and financial performance.

Page | 11
7. Objectives of the Study:
The main objectives of this study are to explore how cost accounting helps businesses in
the service and manufacturing industry make effective decisions. Specifically, the study
aims to:

❖ Understand the Role of Cost Accounting in Decision-Making:

To analyse how Parle uses cost accounting information to plan, control, and manage its
operations efficiently.

❖ Examine Cost Determination Methods:

To study how costs are calculated and allocated in Parle, including the breakdown of
direct and indirect costs, and how this aids in accurate cost assessment.

❖ Evaluate Cost Control Measures:

To identify the techniques used by Parle to control and reduce costs without
compromising on quality, and how these measures contribute to profitability.

❖ Assess the Impact on Pricing and Profitability:

To investigate how cost accounting information supports pricing strategies and helps
maintain a competitive advantage while ensuring profitability.

❖ Highlight the Practical Importance of Cost Accounting:

To provide insights into the real-world application of cost accounting, demonstrating
its relevance for managers, stakeholders, and students.

❖ Support Future Decision-Making:

To provide recommendations on how cost accounting practices can be further improved
to aid better planning, budgeting, and strategic decisions in the service/manufacturing
sector.

Page | 12
8. Limitations of the study:
Every study has certain limitations, and it is important to acknowledge them to maintain
transparency and provide context for the findings. The limitations of this study are as
follows:

❖ Dependence on Secondary Data:

The study primarily relies on information available from secondary sources such as
company reports, websites, articles, and research papers. Lack of direct access to
Parle’s internal cost data may limit the depth of analysis.

❖ Time Constraints:
Due to the limited time available to complete this study, in-depth exploration of all cost
accounting practices and detailed financial analysis of Parle could not be performed.

❖ Industry-Specific Factors:
The findings are based on the practices of Parle, a company in the food and beverage
sector. The results may not be fully applicable to other service or manufacturing
industries with different operational structures.

❖ Limited Scope of the Study:

The study focuses only on the role of cost accounting in decision-making and cost
control. Other areas such as taxation, legal compliance, and financial reporting are not
covered.

❖ Dynamic Business Environment:

Cost accounting practices and operational decisions may change over time due to
market conditions, competition, or policy changes. Hence, some information in this
study may not reflect future practices.

❖ Restricted Access to Confidential Information:

Certain detailed financial data and internal decision-making processes of Parle are
confidential and not publicly available, which limits the comprehensiveness of the
study.

This study focuses on the role of cost accounting in decision-making in the

service/manufacturing industry, using Parle as a case. Cost accounting helps businesses track,
analyse, and control costs, enabling informed decisions on pricing, budgeting, and resource
allocation.

The study highlights the need and significance of cost accounting in understanding cost
structures, improving efficiency, and ensuring profitability. The objectives include analyzing
cost determination, cost control, impact on pricing, and practical applications for management.

The limitations involve reliance on secondary data, time constraints, limited scope, and
restricted access to internal company information. Overall, the chapter establishes the
foundation for understanding how cost accounting supports business decision-making and
operational efficiency.

Page | 13
 CHAPTER NO. 2: PROFILE OF THE ORGANIZATION

1. Introduction to Parle Products Pvt. Ltd.:

Parle Products Private Limited is one of India’s most renowned and trusted food
companies, celebrated for its biscuits, confectionery, and snacks. Established in 1929 in the
Vile Parle suburb of Mumbai by Mohanlal Dayal Chauhan, the company began as a small
bakery producing bread, traditional Indian snacks, and buns. Mohanlal, originally from
Gujarat, ventured into the food business after his tailoring profession did not succeed, and
he brought his entrepreneurial spirit into creating a brand that would become synonymous
with quality and affordability. His five sons—Maneklal, Pitambar, Narottam, Kantilal, and
Jayantilal—later joined him, helping to expand the business into a leading food company.

In 1939, Parle began manufacturing biscuits, initially supplying exclusively to the British
Army. After India’s independence in 1947, the company introduced affordable glucose
biscuits to the Indian market, resulting in the creation of the iconic Parle-G biscuit. Parle-
G quickly became a household name and has been recognized as one of the world’s best-
selling biscuits, loved for its taste, nutrition, and affordability. The brand’s popularity
played a key role in establishing Parle Products as a major player in the Indian food
industry.

Over the decades, Parle expanded its product range to include a variety of biscuits,
confectionery, and snacks. Its portfolio today includes popular brands such as Hide & Seek,
Krackjack, Milano, 20-20 Cookies, Melody, Magix Creme, Monaco, and Happy Happy.
This diversification helped Parle cater to the tastes of millions of consumers across different
age groups and regions, strengthening its position as a household name.

Parle Products operates multiple manufacturing facilities across India, including locations
in Kanpur, Neemrana, Bengaluru, Hyderabad, Kutch, Khopoli, Indore, Pantnagar,
Sitarganj, Bahadurgarh, and Muzaffarpur. These plants use large-scale automation to
ensure product quality and efficiency. With nearly a century of experience, Parle has not
only maintained high standards in production but also continuously adapted to changing
consumer needs, making it a symbol of trust and reliability.

Today, Parle Products Pvt. Ltd. reports a revenue of ₹17,223 crore (approximately $2
billion) and a net income of ₹905 crore (about $110 million), demonstrating its strong
financial standing and market presence. The company’s journey from a small bakery to a
leading multinational food corporation highlights its commitment to quality, innovation,
and consumer satisfaction. Parle continues to uphold its legacy of delivering nutritious,
affordable, and tasty products, making it one of India’s most respected and enduring brands
in the food industry.

Page | 14
2. History and background:

Parle Products Private Limited is one of India’s most iconic and trusted food companies,
known primarily for its biscuits and confectionery products. The story of Parle begins in
1929, in the Vile Parle area of Mumbai, when Mohanlal Dayal Chauhan, a visionary
entrepreneur from Gujarat, decided to start a small bakery. Initially, Mohanlal had tried
his hand at tailoring, but after that business did not succeed, he turned to the food
industry. He began by making bread, buns, rusks, and traditional Indian snacks, selling
them locally. Even in those early days, Mohanlal was committed to quality and
consistency, which helped him build a small but loyal customer base.

Mohanlal’s five sons—Maneklal, Pitambar, Narottam, Kantilal, and Jayantilal—later

joined the business, bringing fresh energy and ideas. Together, they expanded the
bakery’s operations and diversified its product offerings. In 1939, the company made a
significant leap by starting biscuit production. Initially, these biscuits were supplied
exclusively to the British Army in India. This period was crucial because it allowed the
company to gain experience in large-scale production and develop the technical expertise
needed for future growth.

After India gained independence in 1947, Parle saw a huge opportunity to serve the newly
independent country. The family decided to introduce glucose biscuits that were not only
tasty but also affordable for the common Indian consumer. This led to the creation of the
famous Parle-G biscuit, which quickly captured the hearts of people across India. Parle-G
became more than just a biscuit; it became a symbol of trust, nourishment, and
affordability. Families from all walks of life began to include it in their daily lives, and it
soon became a household name. The success of Parle-G helped the company establish a
strong foundation in the Indian market, setting the stage for decades of growth and
innovation.

Over the years, the Parle family decided to divide their business into three separate
entities, each managed by different branches of the family. Parle Products Pvt. Ltd., led
by Vijay, Sharad, and Raj Chauhan, focused on biscuits and confectionery. Another
branch, Parle Agro, took responsibility for beverages, producing famous drinks like
Frooti, Appy, Gold Spot, and Thums Up. The third branch, Parle Bisleri, concentrated on
bottled water. Although these companies operate independently, they share the legacy of
the Chauhan family and the brand name “Parle.”

Under the leadership of the current management, Parle Products continued to innovate
and expand its product range. In addition to Parle-G, the company introduced brands such
as Hide & Seek, Krackjack, Milano, 20-20 Cookies, Melody, Magix Creme, Monaco, and
Happy Happy. Each of these products was carefully designed to appeal to different age
groups, tastes, and preferences, helping the company maintain its leadership in the Indian
biscuit and confectionery market.

Parle Products now operates multiple manufacturing facilities across India, including in
Mumbai, Kanpur, Neemrana, Bengaluru, Hyderabad, Kutch, Khopoli, Indore, Pantnagar,
Sitarganj, Bahadurgarh, and Muzaffarpur. These factories combine modern technology
with strict quality control measures, ensuring that every product meets high standards.
The company also places great emphasis on efficiency and sustainability in its operations,
reflecting its commitment to responsible business practices.

Page | 15
Today, Parle Products Pvt. Ltd. is much more than a biscuit company. It represents nearly
a century of dedication, resilience, and innovation. The company has grown from a single
small bakery into a multinational corporation with products sold not only across India but
in many international markets. Its success is rooted in the vision of its founder, the hard
work of the Chauhan family, and its consistent focus on quality, affordability, and
customer satisfaction. Parle’s journey is a story of entrepreneurship and perseverance,
showing how a small local bakery can evolve into a trusted brand recognized by millions.
The company continues to uphold its legacy by delivering products that bring joy,
nourishment, and trust to households everywhere, solidifying its place as one of India’s
most respected and enduring brands in the food industry.

Page | 16
3. Vision, Mission, and Objectives:

Vision: Parle Products Pvt. Ltd. envisions being more than just a food company; it aims to
be a household name that brings quality, nutrition, and happiness to millions of people. The
company strives to maintain its leadership in the biscuit and confectionery market while
expanding globally. Its vision emphasizes delivering products that are not only tasty and
affordable but also trusted by families for their nutrition and quality. Parle sees itself as a
brand that nourishes people, strengthens communities, and continues to innovate in ways that
meet the evolving tastes and needs of consumers.

Mission: The mission of Parle Products Pvt. Ltd. revolves around providing high-quality,
affordable, and nutritious food products to consumers across India and the world. The
company focuses on understanding customer preferences and producing biscuits,
confectionery, and snacks that satisfy different tastes while maintaining consistent quality.
Parle aims to make its products accessible to people in every corner of the country, ensuring
that even consumers in remote areas can enjoy its offerings. Additionally, the company is
committed to innovation, constantly introducing new products and flavours to delight
consumers while sustaining the trust that has been built over decades.

Objectives: Parle Products Pvt. Ltd. operates with several key objectives that guide its
growth and operations:
1. Delivering Quality Products:
Parle aims to maintain consistently high standards in its products, ensuring that
consumers receive reliable, safe, and tasty food every time.

2. Consumer Satisfaction and Trust:

The company focuses on building long-term relationships with its customers by
understanding their needs and providing products that meet or exceed expectations.

3. Innovation and Variety:

Parle seeks to continually innovate its product lines, introducing new flavours, formats,
and products to cater to evolving consumer preferences and trends.

4. Market Expansion:
A core objective is to reach as many consumers as possible, both in India and
internationally, by expanding distribution networks and making its products easily
available.

5. Sustainable Growth:
Parle also emphasizes responsible business practices, including sustainable production,
social responsibility initiatives, and supporting communities where it operates.

6. Leadership in the Industry:

The company aspires to maintain its position as a leader in the biscuit and
confectionery market, setting benchmarks for quality, affordability, and innovation.

Page | 17
4. Organizational Structure:

Parle Products Pvt. Ltd., being one of India’s largest and most successful biscuit and
confectionery companies, follows a hierarchical organizational structure designed to
ensure efficient management, smooth operations, and effective decision-making. The
structure is a mix of functional and family-managed hierarchy, reflecting both its modern
corporate approach and its roots as a family business.

At the top of the hierarchy is the Board of Directors, which provides strategic direction
and overall supervision of the company. The board is primarily composed of members of
the Chauhan family, who continue to maintain active involvement in major decisions,
ensuring that the company’s vision, mission, and values are upheld.

Directly under the board, the company has the Managing Directors (MDs) and senior
executives who oversee day-to-day operations. The MDs are responsible for making key
operational, financial, and marketing decisions, ensuring that the company’s strategic
objectives are implemented effectively across all departments.

The organizational structure is divided into several functional departments, each headed
by a department head who reports to the Managing Director. These departments typically
include:
1. Production and Operations:
This department manages the company’s manufacturing facilities located across India,
ensuring high-quality production, timely supply, and efficient use of resources. It
oversees all aspects of production, including procurement of raw materials, production
scheduling, quality control, and maintenance of machinery.

2. Marketing and Sales:

Responsible for promoting Parle products, this department works on advertising
campaigns, brand management, and distribution strategies. It ensures that the products
reach consumers in urban and rural areas alike and maintains strong relationships with
distributors, retailers, and wholesalers.

3. Finance and Accounts:

This team manages the financial health of the company, including budgeting, cost
accounting, taxation, and financial reporting. They also play a vital role in evaluating
the cost-effectiveness of production and marketing strategies, helping the company
make informed business decisions.

4. Research and Development (R&D):

Parle invests in innovation through its R&D department, which focuses on developing
new products, improving existing ones, and ensuring that all products meet high
standards of nutrition, taste, and quality.

5. Human Resources (HR):

The HR department manages recruitment, training, employee welfare, and performance
management. It ensures that Parle has a skilled and motivated workforce to meet its
operational and strategic goals.

Page | 18
6. Supply Chain and Logistics:
This department coordinates the movement of raw materials to factories and finished
goods to warehouses and retailers. It ensures that production and distribution are
seamless, timely, and cost-effective.

The structure of Parle is designed to be centralized at the top with family oversight, while
operational departments enjoy functional autonomy to execute daily activities efficiently.
This combination allows Parle to maintain a balance between family values, traditional
business ethics, and modern corporate management practices.

Overall, Parle’s organizational structure enables the company to maintain its leadership
position in the Indian food industry, ensuring operational efficiency, innovation, and
customer satisfaction across its extensive product range and geographic presence.

Page | 19
5. Product Range:

Parle Products Pvt. Ltd. offers a wide and diverse range of products, catering to different
tastes and preferences of consumers across India and abroad. The company’s portfolio
includes biscuits, confectionery, snacks, cakes, rusk, and premium products.

❖ Biscuits and Cookies: Biscuits are the core of Parle’s business. Its flagship product, Parle-
G, is one of the most iconic biscuits in India, known for its affordability, nutritional value,
and consistent quality. Parle has also introduced several other biscuit brands to cater to
different tastes, including Hide & Seek, a premium chocolate chip cookie; KrackJack, a
sweet and salty cracker; Monaco, a crisp salted biscuit; 20-20 Cookies, which are crunchy
and flavourful; Magix Creme, cream-filled biscuits; Milk Shakti, a milk-based biscuit; and
Parle Marie, a light and crisp option. Other offerings include Nutricrunch, Happy Happy,
Coconut Biscuits, and the premium Platina Range, which includes Hide & Seek Milano,
Nutricrunch Premium Digestive, and Mexitos.

❖ Confectionery: Parle has a significant presence in the confectionery segment, producing

toffees, candies, and chocolate-based products. Popular products include Kismi, a
traditional toffee bar; Melody, a chocolate-filled toffee; Mango Bite, a tangy mango-
flavoured candy; Poppins, colourful candy balls; Rol-a-Cola, a cola-flavoured candy; and
other fruit-flavoured or coffee-flavoured candies like Orange Bite, Mazelo, Cafechino, and
Kapi Candy. The company also offers eclairs under the brands 2 in 1 Eclairs and Duet New.

❖ Snacks: Parle has ventured into savory snacks as well. Its offerings include Mexitos,
Mexican-style nachos; Fulltoss, a crunchy snack; and Parle’s Wafers, available in flavors
such as Cream n Onion, Masala Masti, Tangy Tomato, Classic Salted, Piri Piri, Aloo Chaat,
and Subtle Onion. The company also produces traditional Indian snack mixes under the
Chatkeens range.

❖ Cakes: Parle produces a range of soft cakes under the Happy Happy brand, available in
flavours like chocolate, vanilla, and tutti-frutti. These cakes are designed to be soft,
flavourful, and affordable for everyday consumption.

❖ Rusk: Parle Rusk is a crunchy, twice-baked bread product that is popular for tea-time
snacks. It has been a staple product in many Indian households for decades.

❖ Premium Range: Under its Platina Range, Parle offers premium products for consumers
seeking a higher-end experience. This includes premium chocolate chip cookies like Hide
& Seek Milano, health-focused biscuits such as Nutricrunch Premium Digestive, and
Mexitos nachos. These products focus on superior quality, taste, and nutrition.

❖ Breakfast Cereals and Atta: Parle has also expanded into breakfast cereals and branded
wheat flour (atta), ensuring its presence in more categories of the food market while
maintaining the same focus on quality and nutrition.

Overall, Parle Products Pvt. Ltd. has successfully built a diverse portfolio that caters to all
age groups, tastes, and income levels. From affordable biscuits to premium chocolates,
Parle has positioned itself as a company that combines taste, nutrition, and trust, making it
a leader in India’s food industry.

Page | 20
6. Production Process:
Parle Products Pvt. Ltd. employs a highly efficient and standardized production process to
manufacture its biscuits, ensuring consistent quality and taste. Here's an overview of the
key stages involved:

❖ Raw Material Testing and Storage: Before production begins, all raw materials
undergo rigorous testing to ensure they meet quality standards. These materials
include:
o Wheat flour (Maida)
o Sugar
o Sugar syrup
o Vanaspati (hydrogenated vegetable oil)
o Milk solids
o Baking powder (Leavening agents)
o Salt
o Emulsifiers (E322, E471, E481)
o Dough conditioners (E223)
Once tested, these ingredients are stored in controlled environments to maintain their
quality until they're needed in the production process.

❖ Mixing: The first step in the production line is the mixing of the raw materials. Using
high-powered Stephan mixers, the ingredients are blended to form a dough with the
desired consistency. This stage is crucial for ensuring uniformity in the biscuit's
texture and taste.

❖ Moulding: The mixed dough is then fed into a rotary moulder, a machine equipped
with 260 cups that shape the dough into individual biscuits. This process allows for
the creation of approximately 10,000 biscuits per minute, each embossed with the
iconic "Parle-G" logo.

❖ Baking: The shaped dough pieces are transferred to a 260-foot-long baking oven,
where they are baked at temperatures ranging from 200°C to 300°C. The baking time
typically spans 12 to 15 minutes, during which the moisture inside the biscuits
evaporates, resulting in a crisp texture.

❖ Cooling: Post-baking, the biscuits are moved onto a cooling conveyor that extends
over 260 feet. This gradual cooling process is essential to prevent the biscuits from
becoming soggy and to ensure they retain their crunchiness.

❖ Counting and Packaging: Once cooled, the biscuits are counted and grouped into
packs. Automated machines handle the packaging process, ensuring that each packet
contains the correct number of biscuits and is sealed properly to maintain freshness.

❖ Dispatch: Finally, the packaged biscuits are boxed and dispatched to various
distribution centres, retailers, and wholesalers, ensuring they reach consumers across
India and internationally.

Page | 21
❖ Quality Assurance and Waste Management: Parle Products Pvt. Ltd. places a strong
emphasis on quality control throughout the production process. The company
implements:
o HACCP (Hazard Analysis and Critical Control Points) systems to identify
and mitigate potential risks.
o Regular quality checks using modern equipment to ensure consistency and
safety.
o Wastage management strategies, including recycling broken biscuits and
reprocessing under-baked or over-baked products, minimizing environmental
impact and reducing waste.

❖ Production Capacity: Over the years, Parle Products Pvt. Ltd. has significantly
increased its production capacity. From producing 160 tons of biscuits in 1960, the
company now manufactures approximately 35,000 tons annually, reflecting its growth
and commitment to meeting consumer demand.

Page | 22
7. Departments in Parle:
Parle Products Pvt. Ltd. is a large-scale organization that operates through multiple
specialized departments to ensure smooth functioning, high-quality production, and
efficient management of its business operations. Each department has a specific role and
works collaboratively to achieve the company’s goals.

❖ Production Department:
The Production Department is responsible for manufacturing all Parle products,
including biscuits, confectionery, snacks, cakes, and rusk. This department ensures that
the production process follows strict quality standards, maintains efficiency, and meets
the demand of consumers. It oversees the entire process, from mixing raw materials to
baking, cooling, packaging, and dispatch.

❖ Quality Control and Assurance Department:

Parle places strong emphasis on product quality. The Quality Control Department tests
all raw materials before production and monitors products at every stage of the
manufacturing process. This ensures that the biscuits and other products meet hygiene,
taste, and safety standards. Modern testing laboratories and HACCP (Hazard Analysis
and Critical Control Points) systems are used to maintain consistency.

❖ Research and Development (R&D) Department:

The R&D Department focuses on product innovation, flavour development, and
improving existing products. It studies consumer preferences and market trends to
design new products and ensure that Parle stays competitive and relevant in the ever-
changing food industry.

❖ Marketing and Sales Department:

The Marketing and Sales Department is responsible for promoting Parle products,
building the brand, and increasing market reach. This department designs advertising
campaigns, manages promotions, works with retailers and distributors, and ensures that
Parle products are available across urban and rural markets.

❖ Finance and Accounts Department:

The Finance Department manages the company’s financial health. It handles
budgeting, accounting, taxation, and financial reporting. Cost analysis and monitoring
help Parle make informed business decisions, manage expenses, and plan for future
growth.

❖ Human Resources (HR) Department:

The HR Department manages recruitment, training, performance appraisal, employee
welfare, and labour relations. It ensures that the company has a skilled, motivated, and
satisfied workforce to maintain productivity and operational efficiency.

❖ Supply Chain and Logistics Department:

This department coordinates the movement of raw materials to the factories and
finished goods to warehouses and distributors. It ensures timely delivery of products,

Page | 23
 manages storage facilities, and optimizes transportation to reduce costs and maintain
product freshness.

❖ Administration Department:
The Administration Department takes care of general management functions, office
maintenance, legal compliance, and internal communications. It supports the other
departments to function smoothly and ensures organizational efficiency.

❖ Information Technology (IT) Department:

Parle’s IT Department manages digital systems, enterprise software, and technology
infrastructure. It supports production automation, inventory management, sales
tracking, and data security, enabling the company to operate efficiently in a modern,
tech-driven environment.

Page | 24
8. Cost Accounting Practices in Parle
Parle Products Pvt. Ltd., being one of India’s leading biscuit and confectionery
manufacturers, relies heavily on cost accounting to manage its production efficiently and
maintain profitability. The company’s cost accounting system is designed to track all costs
accurately, help in decision-making, and ensure that products like Parle-G biscuits remain
affordable without compromising quality.

Parle uses a combination of process costing and marginal costing techniques. Since biscuits
are produced in large quantities with standardized processes, process costing allows the
company to calculate the cost of production at each stage, from mixing dough to packaging
the finished biscuits. Marginal costing, on the other hand, helps the management understand
how costs change with production levels and assists in making decisions such as pricing,
production planning, and expansion.

The company categorizes its costs into several components. Direct materials, such as wheat
flour, sugar, milk solids, and oil, form a major part of the cost. Direct labour, which includes
wages of workers directly involved in production, is carefully monitored. Factory
overheads, including electricity, maintenance, and depreciation of machinery, and
administrative overheads, such as office expenses and salaries of staff not directly involved
in production, are also accounted for. Additionally, selling and distribution costs, including
advertising, transportation, and packaging, are included in the overall cost structure.

To optimize costs, Parle takes several practical measures. It purchases raw materials in bulk
to take advantage of economies of scale and reduce per-unit costs. Its factories are
strategically located near sources of raw materials, which helps minimize transportation
costs and ensures timely availability of inputs. Modern machinery and automation improve
efficiency and reduce reliance on manual labour, while waste reduction techniques are
applied to prevent unnecessary material loss.

The cost accounting system also helps Parle analyze the profitability of each product. For
example, the cost of producing Parle-G biscuits is carefully broken down into direct and
indirect costs. By comparing these costs with sales revenue, the company can determine
profit margins and identify areas where efficiency can be improved.

The introduction of the Goods and Services Tax (GST) in India has also influenced Parle’s
cost structure. Input tax credits help reduce the overall tax burden on raw materials, while
compliance with GST requires investments in technology and staff training. These costs
are carefully tracked to ensure that the company can maintain competitive pricing for its
products.

Overall, cost accounting at Parle Products is not just about numbers—it is an essential
management tool that guides the company in pricing, production planning, and resource
allocation. It ensures that Parle continues to provide high-quality, affordable products to
millions of consumers while sustaining profitability and supporting long-term growth.

Page | 25
9. Challenges Faced by Parle Products Pvt. Ltd.:
Despite being one of India’s most trusted and successful food companies, Parle Products
Pvt. Ltd. has faced several challenges over the years. These challenges range from market
competition to changing consumer preferences, and they have required the company to
continuously adapt and innovate.

❖ Intense Competition:
The Indian biscuit and confectionery market is highly competitive. Parle faces stiff
competition from both domestic brands like Britannia, ITC, and Sunfeast, as well as
international players entering the market. This competition puts pressure on Parle to
maintain high quality while keeping prices affordable, especially for products like
Parle-G that target price-sensitive consumers.

❖ Changing Consumer Preferences:

With evolving lifestyles and rising health consciousness, consumer preferences have
shifted towards healthier snacks, sugar-free biscuits, and products with natural
ingredients. Parle has had to innovate continuously to introduce new product lines like
Nutri crunch and premium biscuits to meet these demands, while ensuring that
traditional favourites remain popular.

❖ Rising Raw Material Costs:

Fluctuations in the cost of key raw materials such as wheat, sugar, milk solids, and
vegetable oils directly affect production costs. Parle must manage these fluctuations
carefully to maintain profitability without raising prices drastically, as affordability is
a major factor in its brand positioning.

❖ Regulatory Compliance:
The food industry in India is heavily regulated. Parle has to comply with strict
guidelines regarding food safety, labelling, hygiene, and environmental standards.
Implementing these regulations requires investment in quality checks, certifications,
and technology, which can increase operational costs.

❖ Supply Chain and Distribution Challenges:

Parle’s extensive distribution network reaches both urban and rural areas. Ensuring
timely delivery of products while maintaining freshness is a constant challenge,
especially during the monsoon season or in remote locations. Managing logistics
efficiently is crucial to maintain market share.

❖ Brand Management Issues:

Parle’s business was divided among family members, resulting in separate entities
using the same “Parle” brand name. This has sometimes led to brand confusion in the
market, particularly between Parle Products (biscuits), Parle Agro (beverages), and
Parle Bisleri (water). Maintaining brand identity and trust across different product lines
is a delicate task.

❖ Technological Upgradation:
To stay competitive, Parle needs to continuously invest in modern machinery and
automation. Upgrading technology for large-scale production, packaging, and quality
control requires significant capital investment and training for employees.

Page | 26
 ❖ Global Market Expansion:
While Parle has started expanding internationally, entering foreign markets comes with
its own set of challenges, such as understanding local tastes, meeting foreign food
standards, and competing with established global brands.

10. Future Plans and Strategies:

❖ Revenue Growth Target:

Parle aims to double its turnover and cross ₹20,000 crore in the next few years. This
growth is planned mostly through organic expansion rather than acquiring other
companies.

❖ Becoming a “Total Food Company”:

Instead of focusing only on biscuits and confectionery, Parle wants to enter and expand
in other food categories—like staples, snacks, bakery products, and pulses.

❖ Premiumisation of Existing Brands:

Parle is focusing on upgrading its product lines, giving some brands a more premium
feel. For example, its “Platina” division (brands like Hide & Seek, Milano) is being
emphasized. The goal is to increase the share of premium brands in its total sales
turnover.

❖ Expansion into Staples (Pulses, etc.):

The company has already launched pulses in certain states (Maharashtra & Karnataka)
in types like arhar, masoor, urad, moong, etc. It plans to increase its presence of staples
across India.

❖ Wider Rural Market Penetration:

Increase the availability of more of its brands (not just Parle-G) in rural areas via
distributors and retailers.
o Subsidise costs for distributors in smaller towns so distribution becomes viable.
o Use regional media and local languages for communication in rural/semi-urban
markets.

❖ Strengthening Distribution Network Across India:

The company plans to expand its reach especially in smaller towns and new regions,
increasing both width (more outlets) and depth (more product offerings in each outlet)
of distribution.

❖ Focus on New Product Categories (Breakfast Cereals, Atta/Wheat Flour, etc.):

Parle has re-launched Parle-G Atta, entered breakfast cereal segment, and is looking to
strengthen its portfolio in these growing categories.

Page | 27
 ❖ E-Commerce and Digital Marketing:
Parle is increasing its presence in e-commerce and quick commerce channels. Also, it
uses digital and regional media for marketing in rural and urban areas.

Parle Products Pvt. Ltd. is one of India’s oldest and most trusted FMCG companies. It offers
a wide range of products such as biscuits, snacks, and confectionery that cater to all sections
of society. Its production process is systematic, beginning from sourcing quality raw
materials to baking, packaging, and distribution across the country. The company operates
through key departments like Purchase, Production, Sales, Human Resources, and Accounts,
all working together to ensure smooth operations.
Parle follows sound cost accounting practices to manage material and labour costs, prepare
budgets, and evaluate overall efficiency. These systems help the management make informed
decisions about pricing and marketing. Despite its success, Parle faces challenges such as
increasing raw-material prices and strong competition from other FMCG giants like HUL, ITC,
and Britannia.

To overcome these issues and maintain growth, Parle plans to expand further into rural markets,
strengthen exports, and introduce new product lines. It is also focusing on digital marketing,
premium brands, and new food categories to remain competitive and sustain its leadership in
the Indian market.

Page | 28
 CHAPTER NO. 3: REVIEW OF LITERATURE

The research paper titled “The Role of Cost Accounting System in the Pricing Decision-
Making in Industrial Companies of Taiz City, Yemen” by W. M. Alahdal, M. H. Alsamhi,
and T. Prusty (2016) investigates how cost accounting systems influence pricing decisions in
Yemeni industrial companies. The study uses descriptive and analytical methods with
fieldwork through questionnaires targeting accountants, auditors, and financial managers in
Taiz City. Data was analyzed using SPSS with statistical methods such as frequencies,
percentages, SMA, standard deviation, t-tests, and Cronbach's alpha. The study finds that cost
accounting systems provide high-quality accounting information, which significantly impacts
pricing decisions. Managers rely on cost information to make strategic decisions, including
product pricing, optimal product mix, and operational cost evaluation. The paper emphasizes
that accurate, timely, and reliable cost information is essential for effective decision-making.
The research also reviews prior studies, showing that cost systems are critical in improving
efficiency, profitability, and managerial control in industrial settings.

The research paper titled “The Changing Role of Managerial Accounting in Decision-
Making Process: Research on Managing Costs” by Gabriela Fotache, Marian Fotache, Radu
Cristian Bucşa, and Lucian Ocneanu (2011) explores how managerial accounting has evolved
from a traditional cost-recording system into a vital tool for strategic decision-making. The
authors argue that in the past, managerial accounting mainly focused on measuring historical
costs and determining product or departmental expenses. However, in the modern competitive
business environment, this traditional focus is no longer sufficient. Organizations now require
more dynamic and predictive cost information that helps managers anticipate changes, analyze
cost behavior, and make informed decisions regarding pricing, production, budgeting, and
performance evaluation. The paper highlights that the informational needs of decision-makers
have expanded significantly. Managers no longer rely solely on financial data but also require
non-financial and qualitative information that reflects operational efficiency, customer
satisfaction, and environmental performance. Decision-making now occurs at multiple
levels—strategic, tactical, and operational—and thus demands timely, relevant, and reliable
accounting information. The authors emphasize that traditional managerial accounting systems
often fail to meet these complex informational needs because they are reactive, focusing on
what has already occurred rather than forecasting future trends. This time lag in cost reporting
and the problem of information overload can hinder effective managerial decisions.

The research paper titled Cost Accounting Systems Structure and Information Quality
Properties: An Empirical Analysis” by Sandra Cohen and Efrosini Kaimenaki (published in
Journal of Applied Accounting Research, Vol. 12, Issue 1), Cohen and Kaimenaki set out to
investigate how the structural features of cost accounting systems influence the quality of cost
information produced, particularly insofar as decision makers perceive it. Their work is
grounded in the idea that not all cost systems are equal — that is, some systems are more
sophisticated, better structured, and more tailored, and thus have a greater capacity to supply

Page | 29
high-quality information that will actually help managers make decisions. The authors begin
by defining cost accounting systems structure using four key dimensions:
(1) the level of detail in cost information,
(2) the ability to disaggregate costs by behaviour (for example, fixed vs. variable, direct vs.
indirect, controllable vs. non-controllable),
(3) the extent to which variance analysis is applied (i.e., deviations between actual and
budgeted results), and
(4) the frequency with which cost information is generated and reported to users. From a
decision-making standpoint, the implications of this study are quite strong. It suggests that
designing a cost accounting system with sufficient detail, solid variance analysis, and regular,
frequent reporting is not merely a technical or cosmetic matter — such system features
materially enhance the perceived quality of information, which in turn makes it more useful to
managers making strategic and operational decisions. In this project on “Role of Cost
Accounting in Decision Making,” we could use this article to underline the importance of
system design (not just what data is collected, but how the system organizes, processes, and
reports that data) in influencing how usable and trusted cost information becomes.

The research paper titled “Analyzing Cost Accounting Methods in Light of Technological
Development and Their Impact on Managerial Decision-Making” by Maytham Abbas,
Hasanain Salim Rasheed, and Hussein Falah Hasan (April 2025) was conducted at the General
Company for Electrical Industries in Baghdad, and its central objective is to explore how
technological advancement influences cost accounting methods, and how in turn those methods
affect managerial (administrative) decision-making. The researchers gathered data via a
questionnaire of 30 items, administered to department heads and specialized employees in the
company. The questionnaire was structured around three main axes: technological
development, cost accounting methods, and administrative decisions. Rigorous testing
(Cronbach’s alpha) was carried out to verify reliability of the instrument: the components
(technological development, cost accounting methods, and decisions) had high reliability
coefficients — around 0.84 to 0.87 (for individual axes), total questionnaire reliability was ~
0.946.

The research paper titled “Strategic Cost Accounting: How Large Corporations Use
Costing Methods to Drive Long-Term Decision-Making” by Mbonigaba Celestin & Anjay
Kumar Mishra (2025), based on the Journal of Financial Planning and Management article. n
this study, the researchers set out to examine how large corporations apply strategic cost
accounting methods in order to make long-term financial decisions. Their interest is especially
in techniques like Activity-Based Costing (ABC), Standard Costing, Job Order Costing, and
also how modern enhancements—such as AI-driven cost analytics—are integrated. They
analyze data from several multinational companies (names include Apple Inc., Walmart,
General Motors, Johnson & Johnson, Boeing) over the period 2020-2024. The methodology is
descriptive and comparative. They employ statistical tools—correlation, ANOVA, and
regression analyses—to investigate how different costing methods relate to outcomes like

Page | 30
profitability, revenue growth, and forecast accuracy. Specifically, the findings show a strong
correlation (r = 0.87) between the use of strategic cost accounting methods and improved
financial performance measures. Corporations using more advanced costing methods
(especially ABC supplemented with AI analytics) have significantly higher profit margins
(18%) and revenue growth (14%) compared to those using more traditional standard costing
approaches (7% and 6%, respectively). Also, forecast accuracy in firms that use AI-enhanced
cost analytics is around 92%, which is substantially better than in firms not using such tools.

REFERENCES
1. Alahdal, W. M., M. H. Alsamhi, and T. Prusty. "The role of cost accounting system in the
pricing decision-making in industrial companies of Taiz city, Yemen." International
Academic Journal of Accounting and Financial Management 3.7 (2016): 70-78.
2. Fotache, Gabriela, et al. "The Changing Role of Managerial Accounting in Decision
Making Process Research on Managing Costs." Economy Transdisciplinarity Cognition 14.2
(2011).
3. Cohen, Sandra, and Efrosini Kaimenaki. "Cost accounting systems structure and
information quality properties: an empirical analysis." Journal of applied accounting
research 12.1 (2011): 5-25.
4. Al-Salmawi, Maytham Abbas Khudhair, Hasanain Salim Rasheed, and Hussein Falah
Hasan. "Analyzing Cost Accounting Methods In Light of Technological Development and
Their Impact on Managerial Decision-Making."
5. Mishra, Anjay Kumar, and Mbonigaba Celestin. "Strategic Cost Accounting: How
LargeCorporations Use Costing Methods to DriveLong-Term Decision-Making." NOLEGEIN
Journal of Financial Planning and Management 8.1 (2025): 1-17.

Page | 31