What is a Costing System?
Costing systems are components of a broader accounting system used by a given company or organization. The main function of the costing system is to keep a focused eye on expenditures made by the company. While the data that is collected and generated by the costing system is also integrated into the overall accounting system, the costing approach allows for easy extraction of the data for reports to upper management. The information that typically is gathered by a costing system allows owners and managers to quickly identify the current status of two key factors that are relevant to the success of the company. Operational costs are often the foundation of the data collected by a costing system. Here, management is able to get a snapshot of all expenditures that are directly connected with the general operation of the organization, especially in terms of production costs. A second important bloc of information that is retrieved with the use of a costing system is performance cost. Here
