classifying, analyzing, summarizing, and allocating costs associated with a process, and then developing various courses of action to control the costs. Its goal is to advise themanagementon how to optimize business practices and processes based on cost efficiency and capability. Cost accounting provides the detailed cost information that management needs to control current operations and plan for the future.[1]

Cost accountingis the process of recording, classifying, analyzing, summarizing, and allocatingcostsassociated with a process, and then developing various courses of action to control thecosts.

Main objectives of cost accounting are as under:

1.To ascertain cost:The basic objective of cost accounting is to ascertain cost of cost center. Cost ascertainment is the process of determining costs after they have been incurred. Basically there are two methods of cost ascertainment - Job costing and Process costing. Different industries follow different methods of costing because of the difference in the nature of their activity.

2.To control cost:Cost accounting aims at controlling costs by using various techniques such as Budgetary control, Standard costing, Inventory control etc.

3.To provide information for decision making:Cost accounting aims at providing information for various managerial decisions

a)Whether to make or buy component

b)Whether to retain or replace an existing machine

c)Whether to process further or not

d)Whether to shut down or continue operations

4.Todetermine selling price:Cost accounting provides cost information to determine the selling price of products or services. During the period of depression, it guides the management to decide, “ How much reduction in selling price may be made to meet the situation? ”

5.To ascertain costing profit:Cost accounting aims at ascertaining the costing profit or loss of any activity on an objective basis by matching cost with the revenue of that activity