Relevant aspects of cost accounting for new business ventures.

in hive-175254 •  2 months ago 

Greetings to all readers of this great platform, in this opportunity I come to share with you the relevant aspects of cost accounting, when starting a new business, as many of us know the beginnings are always difficult, that is why we must conduct an in-depth study of the market or business we want to start, for this we must take into consideration all the factors involved in this process, mainly the costs of it.


The image used is from Public Domain, Author: Goumbik, 2017



To have a better idea of the subject, it is necessary to develop the definition of cost accounting, which, according to Ramirez, D. (2008) states that "cost accounting consists of the recording and control of manufacturing operations, and aims to determine the unit cost of production, which is the basis for setting the selling price".

Taking into consideration the above definition, it can be considered that we must accurately determine the costs that we will require to make the products of our new business, or the costs required to provide a service, it is very important to carry out these controls in order to avoid losses, which in a start-up business could quickly lead to the closure of its operations.

In order to be able to make the corresponding evaluations, we must be clear about what a cost is, According to Polimeni, Fabozzi and Adelberg (1994), cost is defined as "the value sacrificed to acquire goods or services, which are measured by reducing assets or incurring liabilities at the time benefits are obtained".

Taking into consideration what is defined in the previous paragraph, it is necessary to have clear each one of the costs to acquire the goods for the manufacture of our product or the provision of service, in case that there is no clarity of these costs, it is very possible that the new businesses generate losses quickly, and without having any type of profitability.


The image used is from Public Domain, Author: Mahamed Hassan, 2019



Cost accounting helps us to determine each cost incurred in a production process or in the provision of a service, this helps us to make our business run in the best way, this is one of the main conditions that we must be clear when we are going to start our new business, thus making it durable over time, and with great profitability, which ensures that it is a thriving business, we must always be clear about all the factors that may be involved.





  • Polimeni, Fabozzi y Adelberg.(1994) Contabilidad de Costos. Conceptos y Aplicaciones para la Toma de Decisiones Gerenciales. Tercera Edición. McGraw-Hill Interamericana, S.A. Bogotá, Colombia.
  • Ramírez, D.(2008). Contabilidad administrativa. 6ta edición McGraw-Hill.


All the images used by the Author @Chucho27 are Public Domain, in each one of them you can find the source of the image.

The image of the Banner at the bottom, is in the public domain obtained from: PixaBay

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hello @chucho27,
I believe that one of the most important things when we are entrepreneurs is to know what our operating costs are and what our manufacturing costs are. Knowing in detail these costs allows us to establish a profit margin that makes the activity profitable, without this cost information it is possible that we are selling a product or providing a service above its real market value, on the other hand if we establish a lower value we are losing money every time we make the product or provide the service.

Hello @chucho27
This costing thing seems to be an easy thing, but I assume that considering every single expense or investment in every production process must not be an easy task.
Many aspects to consider, and usually in informal businesses these things are not carried in a rigorous way, it is more averaging what they spent and what they made after selling, but I guess there must be formulas and more for this.

Hi @chucho27 I think I understand from your good explanation that this tool allows companies to determine the economic losses they will have in terms of consumption of goods, depreciation of assets and deductions, good information if I'm right thanks for the input