Please address the following question: Explain the characteristics and purposes of cost accounting?
Cost accounting is an internal function which allows management and operations people to judge the efficiency and effectiveness of their departments or operations. Often associated with manufacturing or process costing, cost accounting can be used in mostly any business. It is a tool similar to ratio analysis in that it dissects expenses from a view of comparative data.
It also can be used to judge the performance of middle management, particularly those in charge of a line, process, or even an entire facility. Following that a little further, cost accounting can be used as a basis for decisions about personnel reviews, bonuses, salary increases, and incentives.
But the real benefits of cost accounting are cost savings. It is impossible to evaluate costs without the detailed information about the nature ...
This 400 word, cited solution presents several sources with their comments about the nature of cost accounting. It's good to get several views. There are also examples to explain how cost accounting can be used effectively in a business. Part of this solution also provides a historical perspective for the development of cost accounting.