Cost Accounting # BBA

Cost Accounting will help you to make better financial decisions for your business, to create more logical and accurate growth strategies, and to improve your business’s overall financial health. Cost accounting is helpful because it allows executive management of companies to understand how to use its resources more effectively by tracking and measuring them and study their effects.
1. To Reduce Expenses : We study cost accounting because we are interested to reduce our expenses. Cost accounting teaches us, how you can reduce expenses. It identifies the area where we can save cost.
2. To Make Us Rational : Continue study of cost accounting makes us rational regarding the decision of buying raw material and using labors and other overheads in production process. With cost accounting, we can reduce misuse of resources of company.
3. Variance and its Treatment: In cost accounting, we make budget of overheads and after this we can calculate variance of overheads. By checking under-absorbed overheads, we can treat it correctly.
4. To Determine the Prices: To study cost accounting is very necessary because it is helpful to determine the prices of products correctly.
5. To Control the Cost: Advance study of cost accounting will be helpful to control the cost of each product and of each cost center.