Costing methods
To
ensure profitability, engineering companies need to have in place an effective
costing system that take into account the real cost of manufacturing the
product or delivering the service that it provides. Without such a system in
place it is impossible to control costs and determine the overall profitability
of the business operation.
Cost
accounting is necessary for a company to be able to exercise control over the
actual costs incurred compared with planned expenditure. From the point of view
of cost control, a costing system should not only be able to identify any costs
that are running out of control but should also provide a tool that can assist
in determining the action that is required to put things right.
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