Why is Cost accounting necessary? Cost accounting is a process of assigning costs to cost objects that typically include a company's products, services, and any other activities that involve the company. Cost accounting is helpful because it can identify where a company is spending its money, how much it earns, and where money is being lost. Cost accounting is a business practice in which you record, examine, summarize, and understand the money that a business spent on a process, product, or service. It can help an organization control costs and engage in strategic planning to improve cost efficiency. Objectives of cost accounting are ascertainment of cost, fixation of the selling price, proper recording and presentation of cost data to management for measuring efficiency and for cost control and cost reduction, ascertaining the profit of each activity, assisting management in decision making. cost accounting focuses on tracking productivity-based data to determine a business's break-even point and plan for future growth. At its core, cost accounting takes a granular look at the fixed and variable expenses that are unique to a specific business.

Prachi Garg

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