Cost accounting is an important branch of accounting that provides information beyond what financial accounting can. It is activated when financial accounting limitations are present. Cost accounting establishes section-wise information, such as direct materials, labor, and overhead costs for production and service departments. This allows an organization to monitor costs and identify areas for reduction. A cost sheet example is provided that calculates cost of goods sold by tracking material consumed, direct costs, factory overhead, work-in-progress, finished goods, and selling/distribution overhead costs.

2. COST AND MANAGEMENT ACCOUNTING
 Introduction
 Cost accounting is one of the important
branch of accounting.
 It is enable or activate when the financial
accounting limitations.

3. ESTABLISHMENT OF COST ACCOUNTING
 Limitations of financialaccounting
 Financial accounting
provides historical
information only.
 It involves only monitory
transactions. It doesn’t
given fair information.
 It doesn’t provide each
section information i.e.,
over heads information
place wise.
 Uses of cost accounting
 The main intension of
maintain cost accounting
is to reduce the cost.
 It provides information
section wise. i.e.,
materials and labour
(direct) in production
department material,
labour (indirect) and
overheads in service
department.
 In cost accounting we
have to maintain
information monitory wise
and unit wise.

4. COST SHEET
 Opening stock of material XXXX
add: purchase of materials XXXX
add: carriage inwards xxxx
less:closing stock of material xxxx
material consumed
xxxx
add : wages xxxx
add: direct expenses xxxx
prime cost xxxx
To be continued

5. Add: factory overheads xxxx
Add: opening stock of
work-in-progress xxxx
Less: cloising stock of
work-in-progress xxxx
works cost
xxxx

6. Add: office overheads xxxx
Add: opening stock of
finished goods xxxx
Less: closing stock of
finished goods xxxx
cost of production xxxx
Add: selling & distribution OH xxxx
Add: carriage inwards xxxx
Cost of goods sold xxxx