Question

Explain The Nature And Importance Of Coast Accounting.​

Answer 1

Answer:

Nature of Cost Accounting are :-

• Cost Accounting as a Science - Cost Accounting is a science because like other sciences Cost Accounting too has its own principles, procedures, techniques and knowledge about which can be done through study and training. Actually the knowledge of Cost Accountant should not remain confined to Cost Accounting only instead he should also know In-depth about Production Control, Operations Research and Linear Programming related to cost accounting

• Cost Accounting as an Art - Cost Accounting is also an art because it's Standard Costing and Marginal Costing etc. are such techniques which helps a Cost Accountant to determine that how investments can be controlled, should a new plant be replaced with the old plant or not , etc. in this way with the use of techniques of Cost Accounting important decisions related to Increasing The Profit Earning Capacity of an organisation can be taken at the right time.

Importance of Cost Accounting are :-

• Study, Analyse & Classification- Important in studying, analysing and classifying the cost of goods and services produced.

• Finding out total cost and unit cost- Helpful in finding out the total cost and the unit cost of the goods and services.

• Finding out cost price- Beneficial in finding out the cost price on the basis of which selling price can be determined or to ascertain costs so that selling prices can be rightly fixed for purposes of quotations or tenders.

• Evaluation- Helps in evaluating the efficiency of a department and persons involved in production and to check inefficiency and control unproductive activities.

• Provide Guidelines- In providing guidelines and a basis of control of workers and officials involved in production.

• Cost Control- In controlling the costs incurred on materials labours and other production activities and to check wastage of resources.

Hope it may help you....

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