cost accounting
Internal expense analysis
Cost accounting is the branch of accounting that tracks and analyzes the costs of producing goods or services.
It breaks down expenses—materials, labor, overhead—to determine what each product or process actually costs.
Unlike financial accounting, which reports to outsiders, cost accounting serves internal management: Cost accounting revealed that our flagship product was barely profitable.
No net gain
- varianceSpread around the mean
- overheadLocated directly above
- contribution marginRevenue exceeding variable expenses
Edge of a page
- gross profitEarnings before operating expenses
- net incomeProfit after all deductions
- contribution marginRevenue exceeding variable expenses
- break-evenNo net gain
Estimating future conditions
- allocationDistribution of shares
- financial planningOrganizing future monetary goals
- expenditureMoney paid out
- projectionSomething that extends outward
fiscal year · cash flow · budget variance · operating budget · departmental budget · budget cycle · budget constraints · resource allocation
Expense allocation by assignment
- activity-basedOrganized around doing things
- absorptionProcess of taking in
- contribution marginRevenue exceeding variable expenses
Maximizing efficiency or performance
- benchmarkingMeasuring against top performers
- throughputProcessing rate over time
- waste reductionDecreasing material for disposal
- process improvementEnhancing operational efficiency systematically
capacity utilization · cycle time · economies of scale · continuous improvement · productivity · performance metrics · operational efficiency
break-even
No net gain
- varianceSpread around the mean
- overheadLocated directly above
- contribution marginRevenue exceeding variable expenses
margin
Edge of a page
- gross profitEarnings before operating expenses
- net incomeProfit after all deductions
- contribution marginRevenue exceeding variable expenses
forecasting
Estimating future conditions
- allocationDistribution of shares
- financial planningOrganizing future monetary goals
- expenditureMoney paid out
projection · fiscal year · cash flow · budget variance · operating budget · departmental budget · budget cycle · budget constraints · resource allocation
job costing
Expense allocation by assignment
- activity-basedOrganized around doing things
- absorptionProcess of taking in
- contribution marginRevenue exceeding variable expenses
optimization
Maximizing efficiency or performance
- benchmarkingMeasuring against top performers
- throughputProcessing rate over time
- waste reductionDecreasing material for disposal
process improvement · capacity utilization · cycle time · economies of scale · continuous improvement · productivity · performance metrics · operational efficiency
- financebank, CFO, banks, controller, finance
- budgetingbudget, budgets, budget app, budget template, budget allocation
- accountingbookkeeping, ledger, balance sheet, general ledger, auditing
- business accountingaccrual, balance sheets, bookkeeping, balance sheet, auditor
- bookkeeping historybookkeeping, ledgers, double-entry, balance sheets, journal entries
- business educationMBA, business school, business degree, business administration, Harvard Business School
cost, account, costs, accounts, accountant, accountable, accrue, accounting, accrued