The Following Are The Important Functions of Cost Accounting:
- Ascertainment of cost of product: Cost Accounting ascertains cost of production of each job, process, or work order by applying different methods of cost accounting, such as job costing, process operation costing, contract costing etc. according to the suitability and needs of the organization.
- Fixation of selling prices: Cost accounting helps to find out cost of production and fixation of selling prices of the product or process job or operation. It also helps in preparing necessary tenders or quotations.
- Measurement of efficiency: Cost accounting measures the efficiency of each product, process or departments by applying standard cost method.
- Cost control procedure: Cost accounting controls cost by setting standards and compared with the actual. The deviation between them are identified and if required necessary controlling measures may be taken.
- Reporting to the Management: Cost accounting reports to the management periodically which may be monthly, quarterly or half yearly. According to the reports of the cost accounting, the management takes necessary decisions.
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