Management Notes

Reference Notes for Management

Importance of Cost Accounting -4 Major Importance | Introduction to Cost and Management Accounting

Importance of Cost Accounting

Importance of Cost Accounting

Management has realized the importance of cost accounting due to the limitations of financial accounting. Any type of business requires expenditures on labour, materials, and other items needed to manufacture and dispose of the product. Each stage of the process should be managed to avoid waste. This requires ensuring that no machine remains idle, that efficient labour is appropriately rewarded, that byproducts are properly utilized, and that costs are accurately determined.
A good costing system benefits not only the management, but also creditors and employees. The cost accounting system increases the productivity of an organization and contributes to the prosperity of the nation. Hence, the following are the reasons why cost accounting is important: 

Read more