Cost Accounting Career Information
Learn about cost accountant careers and how to get your cost accounting degree.
What Do Cost Accountants Do?
Cost accounting—a type of management accounting—is a specialized area of expertise concerned with analyzing the costs of products manufactured or sold by a company. In order for a corporation to be profitable, it's critical to understand the precise costs associated with a product and use that information to set appropriate prices. Cost accountants help a company do just that, and are therefore vital to overall financial decision-making.
Where Do Cost Accountants Work?
Cost accountants might work for accounting or consulting firms, or they might work directly for corporations in the retail or manufacturing sectors. But regardless of work environment, accurate cost accounting enables a company to reduce financial waste and increase profit.
How is this accomplished? By determining the specific factors affecting the cost of a product or service. These factors may include labor costs for the production process, cost of materials used in making the product, packaging costs, waste costs, inventory costs, and overhead figures such as the cost of running a particular piece of equipment. A cost accountant understands how these factors, and many more, influence the selling price of an item or service.
The day-to-day duties of cost accounting range from data collection and report preparation to developing and implementing recordkeeping and accounting systems. Cost accounting managers may have additional responsibilities, such as directing other accounting personnel and providing advice about costs and revenues to other managers within the company.
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Cost Accounting Career Path
| Entry Level | Mid Level | Senior Level | |
|---|---|---|---|
| Types of Roles | Staff cost accountant, junior accountant, accounting assistant, accounting clerk | Cost accounting manager, senior cost accountant | Financial controller, chief financial officer, vice-president of finance |
| Experience | 1 - 4 years | 5 - 10 years | 10+ years |
| Getting There |
|
|
|
| Salary* | $27,428 – $59,443 | $41,588 - $74,663 | $62,289 - $205,854 |
| Description |
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* Depends on company size, specific job, and location
Sources: PayScale.com, 2009; Bureau of Labor Statistics, 2009
Cost Accountants in History: Profile
Josiah Wedgwood (1730 - 1795), founder of the Wedgwood ceramic company
Known as the "Father of English Potters," Josiah Wedgwood founded his now-world-famous business in 1759, and it's been a success for over 250 years. This is due in no small part to Wedgwood's own cost accounting expertise.
Though this innovator and artist started as a pottery apprentice, after founding his own company he learned the principles of cost accounting. When his business went through a difficult period, Wedgwood took it upon himself to examine the books, including the costs of materials and labor for manufacturing each of his different ceramic products, from vases to bone china dinner sets.
As a result of his analysis, he not only changed his pricing policies, but also produced different sets of products for different customer bases—higher-cost products for wealthier customers versus lower-cost pottery for the mass market. He even developed equipment innovations that helped reduce his costs further. As a result, his company was able to weather that storm and survive the centuries to remain a source of prized ceramic work even today.