A branch of accounting that is concerned with producing the information that enables an entity’s management to control and evaluate the costs of production. Cost accounting is the process of tracking, analyzing and summarizing all the accounting information related to fixed and variable costs associated with the production of a product, purchase of goods for sale or the delivery of a service. Under cost accounting, cost account is used to track of all costs associated with a business or project.

Cost accounting involves analyzing and tracking expenses, budgets, cost allocations and asset values. This helps an entity to make informed decisions about its operations/ activities and envisage its profitability (in a bid to maximize it). With cost accounting, businesses can understand their past spending patterns and make informed predictions about future expenditures, ultimately giving them the insights they need to stay competitive.