Any Five Advantages Of Cost Accountancy

Cost accountancy may be defined as an accounting discipline, which is concerned with the collection, analysis and presentation of cost information. Since, cost control and planning falls under one of the most challenging area for management decision-making, cost accounting overcomes the limitation of financial accounting and sets cost standards, which helps manager to execute effective decision-making.The major advantages of cost accounting are listed below:

• Cost accounting helps in price fixation by summarizing cost and also helps in estimating the tender or quotation price.
• It provides information by which business managers can identify profitable and unprofitable operations, products and activities, such that corrective measures can be taken for the unprofitable ones.
• While evaluating the alternatives, cost accounting provides vital information for selection best one.
• Cost accounting helps the management to formulate the production policies.
• Cost accounting enhances the management for optimum utilization of the resources