Cost accounting is the process of determining and accumulating the cost of particular product or activity. Any product, function, job, process for which cost are determined and accumulated, are called cost centers.
The basic purpose of cost accounting is to provide a detailed break up of costs of different department, processes, jobs, product, sales and others, so that effective cost control can be exercised.
Cost accounting also helps in making revenues decisions, such as those related to pricing, product mix, profit volume decisions and so on.
The objective of cost accounting, therefore can be summarized in the form of three important statements that is, to determine costs, to facilitate planning and control of business
activities and to supply information for short and long term decisions.