This is the advanced cost management. How the cost influence in taking decisions.It comes under the field operations. Tells about what type of process or activity is required to produce a particular product in a manufacturing unit. There are many process to do a particular job and choosing the one which have the huge benefit depends on the advanced cost management

1. -by
Sruthe SS(12Ac36)
PSG Institute Of Management.

2. Introduction
Cost accounting is a process of collecting, analyzing,
summarizing and evaluating various alternative
courses of action.
Its goal is to advise the management on the most
appropriate course of action based on the cost
efficiency and capability.

3. Needs of cost accounting
To Ensure Optimum Utilisation of Resources
To Achieve Overall Efficiency of Business
To Overcome the Limitations of Financial Accounting
a.
b.
c.
d.
It provides only past data
It reveals only overall results of the business
It is static in nature
It fails to take into account the change in price level

4. Nature of cost and management
accounting:
 Is a branch of knowledge
 Is a branch of science
 Is an art
 It’s a profession

5. Similarities of cost accounting and
financial accounting
 The fundamental principle of double entry
Recording transactions using invoices and vouchers
The results of business are revealed
The causes for loses and wastages are provided
Accuracy of accounts are maintained.

6. Dissimilarities
Cost Accounting
Financial Accounting
Accounting aims at computing cost of
production/service in a scientific
manner and facilitate cost control and
cost reduction
Aims to find out the results as profit
and loss and balance sheet
Internal reporting is made
External Reporting is made
Maintained voluntarily
Maintained Compulasrily
Cost classification based on type of
transactions
classification is basically on the basis of
functions, activities, products, process
and on internal planning and control
and information needs of the
organization.

7. In decision Making
Used by the managers in taking decision regarding products,
process and activities.
Strategic and tactical
long run and short run

8. Scope of Cost accounting
Costing
The technique and process of costing
b. Ascertainment of cost
a.
Cost Accounting
Cost Control
Budgeting
Cost Audit

9. Classification of Costs
By Element
By Nature or Traceability
By Functions:
By Behavior
By control ability
By normality
By Time

10. Types of cost
Unit Costing
Job Costing
Activity Based costing
Target Costing
Operational Costing
Lean costing
Life Cycle costing

11. Element of cost
Raw Material
Labour
Overhead