IMPORTANCE OF COSTING

Importance of Cost Accounting

The limitations of financial accounting have made the management to realize the

importance of cost accounting. Whatever may be the type of business, it involves expenditure on

labour, materials and other items required for manufacturing and disposing of the product. The

management has to avoid the possibility of waste at each stage. It has to ensure that no machine

remains idle, efficient labour gets due incentive, by-products are properly utilized and costs are

properly ascertained. Besides the management, the creditors and employees are also benefited in

numerous ways by installation of a good costing system.