Objectives of Cost Accounting

Objectives of Cost Accounting 

Objectives of Cost Accounting 

Cost accounting aims at systematic recording of expenses and analysis of the same so as to ascertain the cost of each product manufactured or service rendered by an organization. Information regarding cost of each product or service would enable the management to know where to economize on costs, how to fix prices, how to maximize profits and so on. Thus, the main objectives of cost accounting are the following.

1. Cost Control :- Cost control involves managing and regulating expenses to ensure they align with the budget or predefined targets. 

2. Cost Reduction:- Cost reduction is the process of decreasing business expenses and improving efficiency to achieve lower overall expenditure. 

3. Ascertainment of Cost:- The ascertainment of cost involves the detailed determination and calculation of expenses incurred in producing goods or delivering services. 

4. Performance evaluation:- To assess the efficiency and effectiveness of various departments or operations within an organization.

5. Facilitating Financial Statements:- To provide data for preparing financial statements like balance sheets and income statements.

6. Decision Making :- To provide information for making informed decisions regarding pricing, product lines, and resource allocation.

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