Question

Cost Accounting system is neither unnecessary nor expensive rather it is a profitable
investment”. Discuss. Also, clarify whether direct cost and product cost and indirect cost
and period cost are same and similar concepts.

Answer 1

Answer:

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Answer 2

Cost Accounting a profitable investment:

Cost Accounting Can Improve Cost-Efficiency.Perhaps the greatest benefit of implementing cost accounting is its ability to reduce costs and improve cost-efficiency without reducing the level of production. It can streamline processes to help identify waste factors, such as wasted time or surplus resources.Cost Accounting Helps Businesses Accurately Ascertain Costs.Cost Accounting Forms the Foundation of an Effective Budget Plan.It can guide pricing.It improve departmental accountability.It inform better decision making.

Direct,product,Indirect and period costs:

• Product cost is that cost that is directly or indirectly traceable with the product.
• Direct costs like direct material costs and direct labor costs and indirect costs like manufacturing overhead. 
• Period cost is a cost that is not traceable with the product is called a period cost.
• Indirect costs are costs that are not directly accountable to a cost object. Indirect costs may be either fixed or variable. 

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