Cost Accounting
A branch of accounting focused on recording, analyzing, and controlling costs within an organization to improve operational efficiency and profitability.
Cost Accounting
A branch of managerial accounting that involves collecting, analyzing, summarizing, and evaluating various alternative courses of action to help management make informed decisions about costs and resource allocation.
For example, a manufacturing company might use cost accounting to determine the cost of producing each product line, analyze variances between budgeted and actual costs, evaluate whether to make or buy components, and identify opportunities for cost reduction.
Cost accounting differs from financial accounting in its internal focus and flexibility. While financial accounting adheres to GAAP for external reporting, cost accounting systems can be customized to provide the specific information management needs for planning, control, and decision-making. Common methodologies include job costing, process costing, standard costing, and activity-based costing.