Cost accumulation

Cost accumulation involves the use of a formal cost accounting system to collect cost information. By collecting and analyzing cost information, management can make more informed decisions about the operations of a business. Cost accumulation systems fall into two main categories, which are:

  • Job cost system. Accumulates materials, labor, and overhead costs about individual jobs.
  • Process system. Accumulates costs by cost center and then assigns average costs to products.

Related Courses

Accounting for Inventory 
Cost Accounting Fundamentals