It is a method used by a management's internal team to determine the variable and fixed costs associated with the production process. The costs are measured and recorded individually and then input costs is compared with output results for understanding financial performance as well as making future business decisions. Types of costs involved in cost accounting are fixed costs, variable costs, operating costs and direct costs. Fixed are those which are not dependent on production process, that is any decrease or increase in production level could cause no change in these costs. Variable costs are tied to company's level of producing. Operating is associated with day to day operations in a business. Direct costs are related to producing a product and indirect are those which can't be related to a product. The method is different from financial accounting, since cost accounting is used an aid by company for decision making. More information about the topic can be understood from the presentation.

Abhijith S

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