Cost Accounting: Definition and Types with Examples
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Published: 2023-03-28 12:21:56

Every business has to make expenses for their different business activities, it is very important to keep track of the expenses, then they will know their funds. So, every expense of the business can be kept on track with the use of cost accounting. When a business will know how much it is cost to make products and provide services, then it can divide its prices accordingly so that it can make a profit. Through the process of cost accounting, it will be helpful for the business to keep track of the profit that is made through any individual product or service. So, this will be helpful for businesses to decide which products to keep offering and which products to stop offering. Cost accounting is a very important tool for the business organization through which they can manage their finances and can take important strategic decisions. You have to build your skills in cost accounting to manage all these activities of a business. You can take Management Assignment help for your management assignments and concentrate on your other study activities. 

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## What is financial accounting? Types and example
All the money which are incurred in the production of goods and services in a business organization needs to be kept in tracking, analyzing, and management of those expenses is also important and can only be done with the process of cost accounting. The process of cost accounting includes recording, classifying, and summarizing the different expenses so that the business organization has knowledge about the allocation of resources and how to control different operations. 

It can be said that cost accounting is part of managerial accounting and is used for giving information to the management of the organization about the cost incurred and managing the current operation and can also able to plan the future. 


## Examples of cost example
The process of cost accounting help to keep the allocation of the resources for providing services or product manufacturing. 

The process of cost accounting is used by managers that will help them to decide on the allocation of costs for improving profitability.

The manager uses the process of cost accounting so that they can decide about pricing, and the missing products and make a strategy for investment.  

## Types of cost accounting
**Standard costing**
The type of cost accounting in which costs are fixed previously for manufacturing products and to value the inventory is referred to as standard costing. So, by the standard cost, it can be understood as the cost which is the budgeted amount for the production of the goods and services under ideal operating conditions. 

**Activity-based costing**
In activity-based costing or ABC, the different cost is made for different specific activities of the company that are carried out. Rather than the traditional method of cost the costing method of ABC is a more accurate way to attribute to the manufacturing overhead cost. 

**Lean accounting**
The approach of financial management is based on the principles of lean manufacturing and has the aim to reduce waste by eliminating non-value-added activities for example overhead costs maximizing the value.  

**Marginal cost**
The technique of managerial accounting that attributed to the variable cost of each unit of production and a fixed cost for all combined production activities. 


## Conclusion
Thus, cost accounting is a very important tool used by businesses and a thorough study of the subject is very important, if you need help with your assignment take our **[MBA Assignment Writing Services](https://www.treatassignmenthelp.com/service/mba-assignment-help)**. **[Treat Assignment Help AU](https://www.treatassignmenthelp.com/)** is the best assignment helper in Australia.