Introduction to cost accounting

Definition-Cost Accounting is a branch of accounting which is more affiliated to actual production or provision of services such as wheat flour and medical care services etc.

Cost Accounting is a managerial methodology of capturing the total cost incurred or paid to produce a complete unit of a good or service.

Cost Accounting then therefore entails measuring of the cost of all the product elements making up the complete unit of a product.

Cost-Cost is the monetary value of all economic resources utilized in producing a unit of a product. Here, product can be either a physical good or service such as medical care. The resources aforementioned may take the form of raw materials, labor and other overheads.

Types of cost

  • Material Cost
  • Labor Cost

  • Direct Expenses

  • Overheads Costs

About the Author - Dr Geoffrey Mbuva(PhD-Finance) is a lecturer of Finance and Accountancy at Kenyatta University, Kenya. He is an enthusiast of teaching and making accounting & research tutorials for his readers.