In your own opinion, how does cost accounting affect the production of goods or rendering of services?
Cost accounting is the accounting of cost incurred on the manufacturing of the products or delivering service in an organization. It is a much detailed costing which accounts for material cost, labor cost and overheads incurred in manufacturing process or delivering service. It helps in production of goods or rendering of service in below ways:
· It helps in product/service costing. The product costing consists of prime cost, conversion cost, total manufacturing cost and cost of goods sold.
· It helps in analysing cost component wise like direct material, direct labor and manufacturing overhead.
· It helps in calculating unit production/service cost
· It helps in product/service pricing and ensuring the margin targets on products/service are delivered.
· It helps in cost management through cost control and cost reduction.
· It helps in analysing the profitablity of the products/services
In your own opinion, how does cost accounting affect the production of goods or rendering of...
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