State the purposes of Cost Accounting
The primary emphasis of Cost Accounting is segment reporting. This means that the costs and sales of individual products or parts of the business are prepared for management in order to know the profitability of each product or part. [blur]In Financial Accounting, the focus of reporting is on the totality of the business rather than individual parts.[/blur]
[blur]The preparation of financial Accounting must conform to what is known as Generally Acceptable Accounting principles (GAAP) and government regulation. When cost accountants speak of cost accounting, they have in mind the ascertainment of:[/blur]
- [blur color=blue] The cost of manufacturing a product; or[/blur]
- [blur color=purple]The cost of giving a service; or[/blur]
- [blur color=green]The way in which cost can be[/blur]
[blur]In view of the cost of that is involved in manufacturing, the conversion of raw materials to finished goods through the utilization of labour and overhead support, the three basic elements of manufacturing costs are direct materials, direct labour and manufacturing overhead.[/blur]
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