A method of accounting that determines the actual cost of manufacturing a product by looking at every expense in the supply chain. Manufacturing companies use cost accounting to help them monitor and control how much it costs to produce their products, prepare budgets, analyze profitability and comply with required accounting standards.

Cost accounting systems for manufacturing companies typically allow either standard cost or moving average cost methods to value inventory and calculate the cost of goods sold, including both fixed and variable costs.

Rootstock Cloud ERP software provides detailed cost management to support the entire manufacturing process, including the ability to accurately track up to eight cost elements in inventory, work in process and finished using either standard cost or moving average cost methods, then roll up and post automatically to the General Ledger.