Factory burden is the third element. A few examples of this would be taxes, insurance, rent, maintenance, power, light, heat, and supervision. Now that cost has been defined, now the actual cost accounting can come into play. The four parts that make up cost accounting are planning, coordinating, controlling and decision making. Controlling entails the use of a decision method and feedback so that the company s goals and plans are carried out in the best way possible.
Cost accounting is vital to any successful business or company.
Without it, money would leave the company too fast, and sometimes faster than it is entering. The main reason for cost accounting is to maximize profit, since keeping production cost down will mean more money is kept in the company. In short, making a large profit would be almost impossible without cost management. Specthrie, Samuel Waldo. Basic Cost Accounting .