What are the objectives of Cost Accounting?

These are the following important objectives of cost accounting:

  • Ascertainment of Cost: The primary objectives of the cost accounting is to ascertain cost of each product, process, job, operation or service rendered.
  • Ascertainment of Profitability: Cost accounting determines the profitability of each product, process, job, operation or service rendered. The statement of profit or losses and Balance Sheet also submitted to the management periodically.
  • Classification of Cost: Cost accounting classifies cost in to different elements such as materials, laborer and expenses. It has further been divided as direct cost and indirect cost for cost control and recording.
  • Control of Cost: Cost accounting aims at controlling cost by setting standards and compared with the actual, the deviation or variation between two is identified and necessary steps are taken to control them.
  • Fixation or Selling Prices: Cost accounting guides management in regard to fixation of selling prices of the products. It is also helpful for preparing tender and quotations.

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