Cost accounting

Cost accounting refers to the process of accumulation of various cost into a cost pull, assigning cost, to cost objects(cost allocation) ( dept/ products) , dividing indirect cost (overheads) among cost objects (cost apportionment) and absorption of total cost by the cost objects . A newly setup business must install a cost accounting system for ascertainment of correct cost of the product or service and for determining current selling price. Management s contention that company has a robust financial system in place is not correct.this is because every co. whether manufacturing, trading or service organization is req to maintain cost accounting records separately according to CARR prescribed by the central government for each sector. Factors to be considered while installing a cost accounting system in an organization :       Size of the company nature of business raw material required, process of manufacturing, resources used The organizational structure Management Policies Regulatory Framework