Cost Accounting and its Objectives

Cost accounting is concerned with the application of costing principles, methods and techniques for ascertaining the costs with a view to controlling them and assessing the profitability and efficiency of the enterprise.

In the initial stages cost accounting was merely considered to be a technique for ascertainment of costs of products or services on the basis of historical data. In course of time it was realized, due to competitive nature of the market, that ascertaining of cost was not so important as controlling costs was. Hence, cost accounting started to be considered more as a technique for cost control rather than as a technique merely for cost ascertainment. The objectives of cost accounting are:

• Ascertaining the costs
• Controlling the costs
• Reducing the costs

Q. What do you mean by cost accounting? State its objectives.
Q. Write a short note on Cost accounting.