What is "cost accounting" focused on?

Cost accounting is focused on capturing a company’s total production costs. This branch of accounting provides detailed analysis and information about the expenses incurred in the manufacturing of products or providing services. By measuring production costs, cost accounting helps managers make informed decisions regarding budgeting, pricing, and financial forecasting.

This detailed understanding of costs includes direct costs such as materials and labor, as well as indirect costs like overhead. Capturing this information enables companies to identify inefficiencies, control budgets, and ultimately enhance profitability. The insights gained from cost accounting are integral for both internal management decision-making and external reporting, highlighting its importance in operational success.

In contrast, measuring total market share relates to a broader market analysis rather than internal cost management. Tracking sales revenue focuses on income rather than the costs associated with generating that income, and managing employee performance costs centers on workforce management rather than direct production costs. Therefore, the primary objective of cost accounting stands out clearly as the accurate assessment and analysis of production costs.