Cost accounting essays

Cost Accounting Essay. Accounting is the system of recording and summarizing business and financial transactions and analyzing, verifying, and reporting the results; (Merriam-Dictionary, 2012). Cost accounting is described as the evaluating approach to the overall cost of when the business evaluates the cost that is associated with the business.

Costing in a transport undertaking consists of determining the operating cost of each vehicle and applying this cost to find out the cost per unit of service rendered by a vehicle. The cost unit is selected by taking into account factors like weight, bulk of goods carried and distance covered etc.

The use of Activity-Based Costing (ABC) reflects the fact that indirect costs and overhead costs are often more draining to modern organizations than direct costs. The article specifically discusses the use of ABC in terms of its use in costing logistics services.

Cost accounting consists of the identification, measurement, collection, analysis, preparation, and communication of financial information (Khan, 2010). In this paper, I will discuss the reasons why cost accounting is important to businesses and what role it plays in order for they to succeed.