A TERM PAPER ON THE IMPORTANCE OF COST ACCOUNTING IN AN ORGANIZATION

By

EZE BENEDICA

Presented To

Department of Accountancy

ABSTRACT

The importance of cost accounting is to provide data management for managers of a company in areas of planning decision and control and budgeting.

The research was carried out in a number of business organization with and without a cost accountant and found out that most banks go distressed and most companies fold up because of the absence of a cost accountant to give reasonable data information

TABLE OF CONTENT

COVER PAGE I

TITLE PAGE II

APPROVAL III

DEDICATION IV

ACKNOWLEDGEMENT V

ABSTRACT VI

TABLE OF CONTENT VII

CHAPTER ONE

INTROCDUTION 1

OBJECTIVE OF THE STUDY 2

SIGNIFICANCE OF THE STUDY 3

SCOPE OF THE STUDY 4

CHAPTER TWO

DEFINITION OF ACCOUNTING 6

TYPES OF ACCOUNTING 7

COST ACCOUNTING 7

MANAGEMENT ACCOUNTING 8

FINANCIAL ACCOUNTING 8

WHO IS COST ACCOUNTANT 8

THE PURPOSE OF COST ACCOUNTING 9

FUNCTIONING OF COST ACCOUNTING 9

DECISION MAKING 10

PLANNING AND CONTROL 10

BUDGETING 11

ROLE OF COST ACCOUNTING 12

IN MATERIAL COST CONTROL 12

IN LABOUR COST CONTROL 13

CHAPTER THREE

SUMMARY OF FINDINGS 15

CONCLUSION 15

RECOMMENDATION 15

BIBLIOGRAPGHY 16

CHAPTER ONE

INTRODUCTION

In ever, changing world, accounting has been adapted to a number of special roles, which in the initial stage did not play. Hence accounting has become very pervasive, transcending several boarders and affecting the economy pulse of all on the over all financial progress of organizations.

In the accounting field, we have cost accounting, financial accounting and management accounting. In this work, we are concerned mainly with the importance of cost accounting in an organization. The phrase " cost account' when used in isolation is meaningless. The phrase when related to human effort in the firm is given substance. Cost accounting is a conscious and rational procedure by accountants for accumulating cost and relating such cost to specific products or department for effective management actions.

Such cost are used in balance sheet and income determination

Cost accounting is therefore the bedrock or success of any organization because if profit making oriented or otherwise.

This research work is therefore intended to consider. The importance of cost accounting in an organization with the view to ascertaining what accounting information is needed by management is planning, decision accounting and control accounting.

OBJECTIVE OF STUDY

The overview of this term paper is based on the importance of cost accounting in an organization. It is felt that whatever a farm of business venture has developed, some level of accounting is necessary.

The function of cost accounting are purely different from that of financial accounting.

A good accounting system cannot be said to be complete without relevant information from the accountant because he works with many other departments including engineering, marketing and personal.

The objective of this study is to examine the importance of cost accounting in an organization and what are their consideration, on areas of planning, decision accounting and control accounting and to what extent does tits activities satisfy the objective of the organization.

SIGIFICANE OF THE STUDY

Cost accounting is one major part of the formal reporting system of many organization in particular medium and large size organization.

The satisfied institute of management accounting which established budget and standard cost and actual cost operations, processes department or product and the analysis of variance profitability or social use of funds.

It is expected that this research work would be great benefit to business organization like PAHOBIZ industries, oil Companies, manufacturing firms etc. to enlighten them on some indispensable aspiring to own one by his research work acquaint themselves of the need and not just on financial as the case may be. Further research in this field will also find the project useful.

SCOPE OF THE STUDY

This field of study is such that research cannot but afford to limit himself to a reasonable scope of the study.

The scope of the importance of cost accounting is too vast, in fact, it runs through parastatals, ministries, companies banks etc. therefore, cost accounting exist to provide management with information which will help them to plan and control the resources for the business and take better informed decisions.