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The main functions of cost accounting are; UNIT COST CALCULATION; COST ESTIMATION; PLANNING; CONTROLLING; PROVIDING INFORMATION...

The main functions of cost accounting are; UNIT COST CALCULATION; COST ESTIMATION; PLANNING; CONTROLLING; PROVIDING INFORMATION FOR DECISION MAKING. By mentioning all of these functions, briefly explain the importance of cost accounting for business entities and its role in decision making. Your answer should be between 200 to 500 words.

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Answer #1

Functions of cost accounting are as follows -:

1.Unit cost calculation - The main objective of cost accounting is to ascertain the cost of goods and services.

2.Cost estimation -:  The analysis of cost is necessary to classify the cost into controllable or uncontrollable, relevant or irreverent, profitable or unprofitable etc.

3.Cost planning -: It help in fixation of selling prices. The selling price per unit is calculated by adding a certain profit on the cost per units.

4.Cost controlling - : a  technique that is used to minimize the cost of product and services without compromising on the quality.

5.Cost information -: it helps in assisting the management in planning by providing necessary costing information that also enable the evaluation of the past activities as well as future planning.

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