Cost accounting scope is very wide. However, this has been described under three headings as follows:
Budgeting
In order to do anything, you need to be aware of the resources that you have and how it will turn out. This all can be done with the help of the budget. In cost accounting, actual costs are compared with the budgeted costs to evaluate the performance.
Planning
Planning plays a key role in making any project successful especially in a manufacturing concern. For example, in order to continue production smoothly, the availability of raw material is necessary in a timely manner, otherwise production will halt up and may cause severe losses of profits and customers.
Control
Cost accounting exercises various techniques such as the standard costing approach to control the overall cost of the manufacturing. Company set the standard cost at the start of the project and forecasted/ budgeted figures are estimated. Once the project is done, this is compared with the actual results. The adverse differences then discussed and controlled to improve efficiency.