IMPORTANCE OF COST

ACCOUNTING
BASICS OF COST
ACCOUNTING
 01 Meaning

02 Importance

03 Determination
CONTENT Disclosure of
S 04 profitable product
Control of material
05 supplies
Idelness can be
06 detected
 07 Conclusion
CONTENT
S
Meaning :

 Process that aims to capture a company's cost of

production by assessing the input cost of each step of
production ,as well as fixed costs such as depreciation of
capital equipment

 First measure and record these cost individually

 Compare input results to output or actual results to

aid company management in measuring financial
performance
Importance of cost
Accounting

1. Classification and subdivision

of cost
 Cost accounting classifies cost
and income by every possible
decisions data regarding costs
by departments, process ,
function , products, orders ,
jobs, contracts , and services
can easily computed
2. Helps in determining selling
Price

 Since CA analysis the cost

of each unit, it gives an idea
about the cost of production
 The awareness helps to decide adequate selling price
 High price and low price affects the company
3. Disclosure of profitable products
 CA analysis each and every
units , so the most profitable
and unit making loses can be
easily identified

 So, decision regarding which all

activities are to be promoted,
which all are to be modified or
avoided can be easily taken

 This will help to improve overall performance and profit

4. Control of material and supplies

 In CA material are allocated

according inn terms of
departments , jobs , unit of
production or services

 This helps to minimise

misappropriation, losses from
defective ,spoild, scarp, out of
date material supplies
 5. Idelness can be detected

 Cost accounting values

each single unit

 So it is easy to detect the idelness which

result in wastage of time ,money and
other reasources
 Proper steps can be adopted to avoid
this loss
Conclusions

 The main objective of the cost

accounting is to pinpoint the
efficiencies and inefficiencies, if any ,
in the use of material , labour and
machinery.
 Since cost accounting analysis
each possible units it is beneficial
to management as well as
employees.
THANK YOU