Different types of cost involves varying kinds of consideration in managerial analysis for decision making. For example, deferential and out of pocket cost are types of costs which attempt to envision and evaluate future condition in the light of the current situation.
The rapid rise and growth of business units into large scale enterprise caused cost accounting to develop as a separate yet integral division of the accounting function. Cost accounting should be regarding as the first step in distinguish a major part of accounting as managerial accounting. It institutes the concept of cost planning and cost control both of which are essential to managing successfully the multiple division in the interest of a modern organization. Cost accounting importance necessitates the establishments of that type of cost system which best fulfills the needs management.
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