Define cost accounting describe briefly various types of costing?

Question: Define cost accounting describe briefly various types of costing?

Cost accounting is a form of managerial accounting that aims to capture a company's total cost of production by assessing the variable costs of each step of production as well as fixed costs, such as a lease expense. Cost accounting is used internally by management in order to make fully informed business decisions. Unlike financial accounting, which provides information to external financial statement users, cost accounting is not required to adhere to set standards and can be flexible to meet the particular needs of management. As such, cost accounting cannot be used on official financial statements and is not GAAP-compliant¹.

There are several types of cost accounting, each with its own unique approach. Here are some of the most common types:

1. Standard costing: This method assigns "standard" costs, rather than actual costs, to its cost of goods sold (COGS) and inventory.

2. Activity-based costing: This method takes overhead costs from different departments and pairs them with certain cost objects.

3. Lean accounting: This method focuses on reducing waste and increasing efficiency in the production process.

4. Marginal costing: This method calculates the cost of producing one additional unit of a product.