{"id":1237,"date":"2021-04-27T22:11:03","date_gmt":"2021-04-27T22:11:03","guid":{"rendered":"https:\/\/enorcerna.com\/wiki\/what-is\/cost-accounting\/"},"modified":"2021-04-27T22:11:03","modified_gmt":"2021-04-27T22:11:03","slug":"cost-accounting","status":"publish","type":"post","link":"https:\/\/enorcerna.com\/wiki\/what-is\/cost-accounting\/","title":{"rendered":"Cost accounting"},"content":{"rendered":"
\n

What is cost accounting?<\/h2>\n

Cost accounting, also called Analytical accounting,<\/strong> is a branch of accounting that deals exclusively with manage the production costs of a company.<\/strong><\/p>\n

To do it accumulates, predetermines, controls, distributes, analyzes and manages all costs<\/strong> that the company owns, with the objective of being able, through the financial information acquired, make decisions that benefit the entity through specific techniques and good planning.<\/strong><\/p>\n

In addition, cost accounting will evaluate how efficient the decisions made have been and, if any, will determine the weaknesses that are affecting the economic well-being of the company, with the aim of improving them.<\/p>\n

Cost accounting objective<\/h2>\n

Cost accounting has as its main objective the keep prices stable and<\/strong> determine cost per unit<\/strong> of production.<\/p>\n

At the same time, it also informs management about the costs necessary to carry out production and manufacturing operations.<\/p>\n

By having cost accounting, a company is able to make decisions rationally<\/strong>.<\/p>\n

Cost accounting features<\/h2>\n

Of the main characteristics of cost accounting we can highlight the following:<\/p>\n

    \n
  • It allows to know<\/strong> the cost of production and manufacturing<\/strong> of a company at a general level and per unit.<\/li>\n
  • Enhance production capacity and labor efficiency<\/strong>, which allows the business administration to make important decisions, both national and international.<\/li>\n
  • As part of accounting, it promotes efficiency in the financial decisions.<\/strong><\/li>\n
  • Rigorously analyze costs<\/strong> and identifies the various elements, both direct and indirect, that affect the production of a company.<\/li>\n
  • Analyze the quality and efficiency of manufacturing<\/strong> and, based on this, elaborates advice and decisions<\/strong> that allow to improve the financial and labor part.<\/li>\n<\/ul>\n

    Cost accounting example<\/h2>\n

    Take as an example a company that manufactures cell phones. <\/strong>Before putting production on the market, it must allow cost accounting to analyze the situation and propose the ideal price of the product.<\/p>\n

    To carry out the process, this accounting must identify the total cost<\/strong> of the production of a telephone; that is, establish your procedures, tests, documentation, supplies, insurance, etc. It must also define the alternative expenses related to employees, their profits, salaries and benefits.<\/p>\n

    Later will add such expenses<\/strong> And, with the result, you will be able to define the total price of a phone, always bearing in mind that it must be above the initial investment for the company's profits to be positive.<\/p>\n<\/div>\n\n\n

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    What is cost accounting? Cost accounting, also called Analytical accounting, is a…<\/p>\n","protected":false},"author":1,"featured_media":1238,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[],"class_list":["post-1237","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-what-is"],"_links":{"self":[{"href":"https:\/\/enorcerna.com\/wiki\/wp-json\/wp\/v2\/posts\/1237","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/enorcerna.com\/wiki\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/enorcerna.com\/wiki\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/enorcerna.com\/wiki\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/enorcerna.com\/wiki\/wp-json\/wp\/v2\/comments?post=1237"}],"version-history":[{"count":0,"href":"https:\/\/enorcerna.com\/wiki\/wp-json\/wp\/v2\/posts\/1237\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/enorcerna.com\/wiki\/wp-json\/wp\/v2\/media\/1238"}],"wp:attachment":[{"href":"https:\/\/enorcerna.com\/wiki\/wp-json\/wp\/v2\/media?parent=1237"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/enorcerna.com\/wiki\/wp-json\/wp\/v2\/categories?post=1237"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/enorcerna.com\/wiki\/wp-json\/wp\/v2\/tags?post=1237"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}