Cost Accounting Ascertainment of Cost Fixation Selling Price

The objective of cost accounting are ascertainment of cost, fixation of selling price, proper recording and presentation of cost data to the management for measuring efficiency and for cost control. The aim is to know the methods by which expenditure on materials, wages and overhead is recorded, classified and allocated so that the cost of products and services may be accurately ascertained; these costs may be related to sales and profitability may be determined. Yet with the development of business and industry, its objectives are changing day by day. To ascertain the cost per unit of the different products manufacturing by a business concern. Cost accounting provides the correct analysis of cost both by process or operations and by different elements of cost. It discloses sources of wastage whether material, time or expense or in the use of machinery, equipment and tools and to prepare such reports which may be necessary to control wastage. It is used to provide requisite data and serve as a guide to price fixing a product manufactured or services rendered. Cost accounting ascertain the profitability of each of the product and advise the management as to how these profits can be maximized. It is help to organize cost reduction programmes with the help of different departmental managers. Cost accounting data is used to the management to take various actions financial decisions such as introduction of new products, replacement of labour by machine etc. it is used to guide management in the formation and implementation of incentive bonus plans based on productivity and cost saving. To organize an effective information system so that different level of management may get the required information at the right time in right form for carrying out their individual responsibilities in an efficient manner. It helps the management in the preparation of budgets and implementation of budgetary control. It advice management on future expansion policies and proposed capital projects. It is present the data to the management for management planning, decision making and control.

• Broadly speaking, the above objectives can be re-grouped; under the following three heads
• Ascertainment and analysis of cost and income by product, function and responsibility
• Providing useful data to the management for taking decisions.

Accumulation and utilization of cost data for control purposes to have the minimum possible cost consistent with maintenance of quality is achieved through fixation of targets.