Certified Supply Chain Professional (CSCP) Practice Exam

What is a common objective achieved through cost accounting?

1. Enhancing customer satisfaction

2. Tracking company expenses effectively

3. Increasing employee productivity

4. Improving sales forecasting accuracy

The correct answer is: Tracking company expenses effectively

Cost accounting plays a pivotal role in an organization's financial management by focusing on tracking, analyzing, and controlling costs associated with production and operations. One of its primary objectives is to provide detailed information on company expenses. This enables managers to identify areas where costs can be reduced, making it easier to plan budgets and make informed financial decisions. By effectively tracking expenses, organizations can assess the profitability of different products or services, allowing for better strategic planning and resource allocation. This focus on expense management supports overall financial health and ensures that financial resources are used efficiently, which can ultimately lead to improved decision-making and cost control. While enhancing customer satisfaction, increasing employee productivity, and improving sales forecasting accuracy are important business objectives, they are not the main focus of cost accounting. Instead, cost accounting provides the necessary data that can indirectly impact these areas by ensuring that the organization operates within its budget and maximizes its profitability.