Cost Accounting Important Question and Answer

Running head: COST ACCOUNTING
Cost accounting
Name of the Student
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Author Note

COST ACCOUNTING
Table of Contents
Answer to question 1:.................................................................................................................2
Answer to question 2:.................................................................................................................2
Answer to question 3:.................................................................................................................3
Answer to question 4:.................................................................................................................4
Answer to question 5:.................................................................................................................5
Answer to question 6:.................................................................................................................6
References list:...........................................................................................................................8

COST ACCOUNTING
Answer to question 1:
Cost accounting is the technique of cost management that examines the cost structure
of any business by evaluating the information that is incurred in performing the activities and
evaluating the cost usage efficiency. In other words, cost accounting is the recording,
classification and allocation of expenditure appropriately so that the cost of profits and
services offered by the company can be determined (Khan 2017). It assist the managers in
gaining an insight into the losses and earnings generated by the company. There are various
objectives that are served by the cost accounting and they are listed below:
 Different elements of costs and the process of operations helps in providing a correct
analysis of costing.
 Cost per unit of the products which is manufactured by any business concern is
ascertained by the cost accounting.
 Management are advised on the profit maximization by ascertaining the profitability
of each products.
 The capital locked up in the stocks can be minimized by exercising effective control
on the raw material stocks, consumable stores, finished goods and work in progress.
Cost classification is the grouping of costs in accordance with the similarity in
characteristics. Depending upon the nature, cost is classified as labor cost and material cost.
Based on functions, cost can be classified as commercial and production costs. When it
comes to traceability, cost is divided into indirect and direct costs. Cost classification based
on normality segregates the cost into abnormal and normal costs.
Answer to question 2:
The differences between cost accounting and financial accounting are outlined in the
table below: