Cost accounting is used internally by management to make fully informed business decisions.
Unlike financial accounting, which provides information to external users of financial statements, cost accounting is not subject to established standards and can be flexible to meet the specific needs of management.
Therefore, cost accounting cannot be used in formal financial reporting and is not GAAP compliant.
Cost accounting takes into account all input costs associated with production, including both variable and fixed costs.
Costing types include standard costing, activity costing, lean costing, and marginal costing.