What is the Scope of Cost Accounting?

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a) Determination and analysis of Cost: Cost Accounting records cost and income information for each department, process, job, sales territory and lies order to ascertain cost and evaluate the operating efficiency of each division of the business enterprise.

(b) Control of Costs: In the age of competition, the objective of business is to maintained; in costs at the lowest point with efficient operating conditions. It requires examination of each individual item of cost in the light of the services or benefits obtained so that maximum utilisation of the money expended or- it may be recovered. This requires planning and use of standard for each item of cost for locating deviations, if any, and taking remedial measures.

(c)Proper matching of cost with re venue: It prepares monthly or quarterly statements to reflect the cost and income data identified with the sale of that period.

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(d)Aids to Management: Cost Accounting enables a business not only to ascertain what various jobs, products and services have cost to the business but also what they should have cost, It locates losses and wastages for taking corrective measures and to avoid them in future.

Special cost studies and investigations that help management in determining policies and formulating plans for profitable operations are also a part of cost accounting.

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