accounting for costs

Accounting for costs involves tracking and analyzing expenses related to running a business. It helps determine how much money is spent on different activities, such as materials, labor, or overhead. These costs are categorized into fixed (ongoing expenses like rent) and variable (costs that change with production levels). Proper accounting ensures accurate financial statements, informs pricing strategies, and guides decision-making. It also helps identify areas to improve efficiency and profitability while ensuring compliance with financial regulations. Essentially, cost accounting provides a clear picture of where money is going and supports managing resources effectively.