Cost accounting is used to analyze and report a firm's costing structure and assign costs to cost objects that include the company's products, services, and other activities involved in the day-to-day running of the organization (Drury, 2013) . One takeaway from the course is the understanding of different types of accounting. These include standard costing, wh ich involves assigning a standard cost to the goods and inventory rather than their actual cost and activity-based accounting that usually identifies departmental overhead costs and gives these costs to specific cost objects (Jasinski et al., 2015). There is also lean accounting based on the philosophy of lean manufacturing and products and aims to improve organizational management practices and marginal costing used to evaluates the impact of adding one unit in the production process on the cost of the product. Another takeaway is the understanding that cost accounting does not have to follow a specific standard since it can be adjusted to fit the requirement of the management.
Understanding how money moves in the company and various ways to account for cash flows in the organization will help me make informed managerial information that will drive value in the organization I work (Fouché & Kgapola, 2016) . Also, understanding the different types of cost accounting will enable choosing the best accounting approach that will suit the organization's needs and be adjusted according to the managerial requirements.
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Response to Sandra Willis
Great post, Sandra! I agree with you that Job Costing is very important in the service industry since it indicates that the business is making a profit or not when offering its service. Job Costs are part of operating expenses and may fall under the category of Operation Costing Accounting. When accounting for cash flows in an organization, operating costing helps determine the organization's costs and stock management efficiency. To ensure that the company is generating revenue and making profit through services and products they offer, operating costing helps highlight the level of cost the company needs to be incurring. Therefore, by understanding its operating expenses, the company can decide whether to continue producing the product or not, as you have highlighted in your post.
References
Drury, C. M. (2013). MANAGEMENT AND COST ACCOUNTING (Third ed.). Springer.
Fouché, J. P., & Kgapola, M. P. (2016). PROFESSIONAL ACCOUNTANTS’ PERSPECTIVE OF SKILLS REQUIRED TO PROGRESS TO MANAGEMENT POSITIONS. International Journal of Business and Management Studies, 8 (1), 20-36.
Jasinski, D., Meredith, J., & Kirwana, K. (2015, December 1). A comprehensive review of full cost accounting methods and their applicability to the automotive industry. Journal of Cleaner Production, 108 , 1123-1139. Retrieved from https://doi.org/10.1016/j.jclepro.2015.06.040
