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What Is Cost Accounting And Its Objectives? Cost accounting is a form of managerial accounting that aims to capture a company's total cost of production by assessing the variable costs of each step of production as well as fixed costs. Following are the main objectives of cost accounting: • To ensure the cost per unit of the different products manufactured by a business concern • To provide a correct analysis of cost both by process or operations and by different elements of cost • To advise management on future expansion policies and proposed capital projects www.statanalytica.com
What are the definitions related to cost accounting? • Variable cost and fixed cost Variable costs are the cost that can vary with the outcome, but in fixed cost, it is not varied. • Period cost and product cost The period costs are chargeable as per the current duration. They are not related to the inventories’ values. Whereas the product cost does not change over the period, and these are related to the output. • Operating cost These are the expenses that are related to everyday business activities. These involve the cost which is used for operating expenses of the businesses. www.statanalytica.com
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