Meaning of Cost Accounting

If the objective of an organization is to close down a branch, then cost accounting should guide management by bringing out the cost and benefits of such management’s action. Cost accounting, therefore, is the process of collecting, summarizing, analyzing and reporting in monetary terms tailor made information to management showing the costs and benefits of pursuing each alternative course of action open to management. The cost figures that will be useful to management in deciding on long-term pricing strategy will be different from the ones for short-term pricing, especially, when the firm is operating at capacity.