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3. LIMITATIONS
S:
2. Controlling cost
Cost accounting helps in attaining aim of controlling cost by using
various techniques such as Budgetary Control, Standard costing, and
inventory control. Each item of cost [viz. material, labour, and
expense] is budgeted at the beginning of the period and actual
expenses incurred are compared with the budget. This increases the
efficiency of the enterprise.
Cost accounting is a specialized branch of managerial accounting that provides detailed information about each individual direct and indirect
cost incurred on the production line in relation to the output. Managerial accounting takes the cost accounting information and uses it to create
reports that weigh the production costs against the sales revenue. The report information is updated as the production costs change. The close
relationship between cost accounting and managerial accounting means that the two disciplines have several accounting principles in common.