Approach in cost accounting, Cost Accounting

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Approach in Cost Accounting

Cost accounting is based on the framework or concept of cost centers that is all the costs incurred throughout the production process contain to be identified and accumulated around specific points of the production process, referred to like cost centers.

A cost center may be defined like 'any point at those costs are gathered in order to control cost, fix responsibility and enable costs being recharged on an equitable basis. We will employ a cost flow diagram to demonstrate the principles of a cost center framework. The entire rectangular box represents a cost center. Each one cost will be the responsibility of one management member and will contain costs charged to it and costs recharged also from it if that costs are incurred for reasons of offering a service for other cost centers.

Given diagram displayed Cost flow of a typical manufacturing concern to organization:

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