1. Score keeping and reporting
Cost accounting is important in accumulating data and reporting results to all levels of
management describing how the organization is performing. Feedback from scorekeeping and
attention directing often leads managers to revise planning decisions and sometimes make new
strategic decisions.
2. Selection of the best courses of action from among alternatives
Cost accounting is involved in comparative analysis of alternatives for decision making. This
information is valuable input for an important strategic decision. The goals of the analysis to
assist management make better decisions in selecting the best alternatives.
3. Attention directing
Cost accounting helps managers focus on opportunities and problems. For example, variance
analysis identifies areas where management should lay more emphasis on in terms of cost
reduction and revenue maximization.
4. Budgeting
Cost accounting assists management in planning and forecasting future financial position. Cost
accountants play a crucial role in profit forecasting, cash budgeting, materials and labour
budgeting and preparing the overall organization budget. This branch of accounting also assists in
estimating future costs
5. Other areas in which accounting assists management in decision making
- Application of economic order quantity in making optimal inventory purchase decisions.
- Assessing departmental performance through prudent cost allocation methods.
- Making pricing decisions by accurately allocating and apportioning costs to job units.
marto answered the question on February 26, 2019 at 09:39
- Factors influencing cost estimation method used by a manufacturing company(Solved)
Factors influencing cost estimation method used by a manufacturing company
Date posted: February 26, 2019. Answers (1)
- What are the features of process costing.(Solved)
What are the features of process costing.
Date posted: February 26, 2019. Answers (1)
- Give the functions of budgets.(Solved)
Give the functions of budgets.
Date posted: February 26, 2019. Answers (1)
- List the ways to improve cash management.(Solved)
List the ways to improve cash management.
Date posted: February 26, 2019. Answers (1)
- What are the causes of difference in cost and financial accounts(Solved)
What are the causes of difference in cost and financial accounts
Date posted: February 26, 2019. Answers (1)
- Give the problems in cost estimation.(Solved)
Give the problems in cost estimation.
Date posted: February 26, 2019. Answers (1)
- Give the Limitations of budgeting(Solved)
Give the Limitations of budgeting
Date posted: February 26, 2019. Answers (1)
- Give the causes of stock discrepancies.(Solved)
Give the causes of stock discrepancies.
Date posted: February 26, 2019. Answers (1)
- Give the factors considered in selecting overhead absorption rate(Solved)
Give the factors considered in selecting overhead absorption rate
Date posted: February 26, 2019. Answers (1)
- Give the definition of a cost centre and its application(Solved)
Give the definition of a cost centre and its application
Date posted: February 26, 2019. Answers (1)
- Give the causes of labour efficiency variance(Solved)
Give the causes of labour efficiency variance
Date posted: February 26, 2019. Answers (1)
- Give the causes of labour rate and efficiency variances(Solved)
Give the causes of labour rate and efficiency variances
Date posted: February 26, 2019. Answers (1)
- Give the disadvantages of overstocking:(Solved)
Give the disadvantages of overstocking:
Date posted: February 26, 2019. Answers (1)
- Distinguish between the following Incremental costs and Marginal costs,cost centres and object centres,job costing system and process costing system,relevant cost and relevant range,(Solved)
Distinguish between the following Incremental costs and Marginal costs,cost centres and object centres,job costing system and process costing system,relevant cost and relevant range,
Date posted: February 26, 2019. Answers (1)
- Give the assumptions of break-even analysis.(Solved)
Give the assumptions of break-even analysis.
Date posted: February 26, 2019. Answers (1)
- Give the requirements of an effective stock control system.(Solved)
Give the requirements of an effective stock control system.
Date posted: February 26, 2019. Answers (1)
- Give the benefits of a standard costing system.(Solved)
Give the benefits of a standard costing system.
Date posted: February 26, 2019. Answers (1)
- Give the classification of costs.(Solved)
Give the classification of costs.
Date posted: February 26, 2019. Answers (1)
- Give the assumption of the economic order quantity (EOQ) model.(Solved)
Give the assumption of the economic order quantity (EOQ) model.
Date posted: February 26, 2019. Answers (1)
- Give the major drawbacks of adopting a fixed budget:(Solved)
Give the major drawbacks of adopting a fixed budget:
Date posted: February 26, 2019. Answers (1)