What does it mean cost accounting?
Cost accounting is an accounting method that let companies make the recording, classifying, analyzing, summarizing, allocating, and understanding cost associating with the process of production, distribution, administration and financing for the internal use of the company.
It also provides the detailed information that managers need to facilitate making decisions, make control of the current operations and plans for the future.
There are several types of cost accounting, they can be classifying according to the approaches like:
Standard cost accounting. Is an alternative for the traditional cost accounting method, it is based on the historical costs.
Activity-based costing. This let you identify activities and assign them a cost, with resources to all products and services according to the actual consumption of each one inside the organization.
Resource consumption accounting. Is a management theory that provides managers with decision support information for enterprise optimization.
Throughput accounting. Identifies factors that limit an organization from reaching its goal, and then focuses on simple measures that drive behavior in key areas towards reaching organizational goals and for enterprise profitability improvement.
Life Cycle Costing. Studies the total cost of ownership over the life of an asset.
Environmental accounting. Identifies resources use, measures them and communicates costs of a company economic impact on the environment, with the end of minimizing their ecological footprint.
Target costing. This let you determine a product’s life-cycle cost which should be sufficient to develop specified functionality and quality, while ensuring its desired profit.
Do you think your organization needs to benefit from any of them?
Every company needs to be in control of their cost accounting, but it can varies in use from company to company or from department to department. which area do you need help in?
Being able of take care of your organization's costs will allow you:
• Keep in order your income and expenses.
• Make effective investment plans.
• Improves your inventary and increase your sales every month.
• Keeping a record that will allow you to see the possible mistakes you have made and how to correct them.
Just, look for the professionals!