Practical Costing

Costing is one of the most important branch of modern accounting system. It has developed because of limitations of financial accounts. In these days it is necessary that a business concern should conduct its production activities with utmost efficiency or with the minimum possible wastages and costs. This may not be necessary sometimes when there is such a large shortage of goods that the consumers have to buy whatever is offered to them and at a price which the sellers demand. This, however, is not the usual case and in modern time, the customers have a wide choice of selection. The choice will naturally be dictated by the value which the product or the service give to the consumer and by the price he has to pay. Those concerns which do not try to continuously improve their product and service and to bring down costs and prices will sonner or later find themselves out of business because of the simple fact that there are other concerns which are constantly on the look out for a greater share in the existing market. Managements of business organizations, therefore need something by which they can constantly measure their performance objectively. In short, cost accounting may be regarded as that branch of accounting which provide detailed cost information to owners of business for their decision making.