ABSTRACT
Costs serve no useful purpose unless and until they have been communicated to the management and their implications grasped. The main tasks a company management expects from the cost department are: the present cost per unit of production; the relative cost of the different lines to be sold; the cost per unit at varying volumes of output; cost of new and proposed lines; and the break-up of costs into charges for man, machine, process or department. A manager aims at comparing the cost and selling price of each unit to ascertain the profit margin. In making such comparison from week to week he also gains an impression of the progress of the factory and the varying desirability of selling lines. The financial accountant records what has happened with emphasis on prevention of misappropriation of cash while the cost expert records how and why the happenings have taken place with emphasis on misuse of both material and labour.
