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What Do Cost Accountants Do?

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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 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.

Cost Accounting Career Path

Entry Level

Types of Roles


  • Staff cost accountant, junior accountant, accounting assistant, accounting clerk

Getting There


  • Bachelor's degree in accounting (Bachelor of Arts, Bachelor of Science, or Bachelor of Business Administration)
  • Proficiency in Microsoft Office and business management software such as SAP

Description


  • Work under a senior accountant or manager
  • Analyze financial information and prepare reports
  • Maintain and reconcile accounts
  • Work with accounting-related computer technology

Mid Level

Types of Roles


  • Cost accounting manager, senior cost accountant

Getting There


  • All entry-level requirements
  • Strong communication and analytical skills
  • At least a bachelor's degree in accounting or business administration; an MBA degree can mean higher salaries and better opportunities

Description


  • Collect and analyze data about operational costs
  • Assist and direct junior accounting personnel
  • Provide advice to managerial staff about costs and revenues

Senior Level

Types of Roles


  • Financial controller, chief financial officer, vice-president of finance

Getting There


  • All mid-level requirements
  • Solid management and organizational skills
  • Knowledge of corporate finance
  • A graduate degree such as an MBA is desirable; additional certifications such as a CPA may also be helpful

Description


  • Oversee all financial activities of the company
  • Create high-level reports for management and stockholders
  • Hire, train and oversee staff
  • Implement cost accounting improvements and other financial strategies to increase a company's efficiency

Cost Accountant Salary

According to the U.S. Bureau of Labor Statistics Occupational Outlook Handbook, cost accountants should have a projected job growth rate of 7% through 2030. This is just below the national growth average for all jobs.

You can take a look at median annual salaries nationally and by state below.

Accountants and Auditors

National data

Median Salary: $77,250

Projected job growth: 6.9%

10th Percentile: $47,970

25th Percentile: $60,760

75th Percentile: $99,800

90th Percentile: $128,970

Projected job growth: 6.9%

State data

State Median Salary Bottom 10% Top 10%
Alaska $77,450 $48,900 $116,770
Alabama $62,200 $44,960 $103,930
Arkansas $61,770 $39,380 $101,200
Arizona $76,060 $47,630 $124,440
California $80,540 $50,850 $139,000
Colorado $78,470 $48,830 $129,760
Connecticut $78,780 $49,430 $128,100
District of Columbia $101,280 $61,720 $162,600
Delaware $78,760 $48,940 $127,210
Florida $63,640 $39,150 $124,970
Georgia $74,700 $43,480 $128,530
Hawaii $63,020 $47,510 $99,740
Iowa $62,750 $47,470 $102,160
Idaho $62,750 $39,280 $102,380
Illinois $75,400 $47,470 $122,270
Indiana $64,280 $44,800 $106,580
Kansas $62,980 $46,310 $103,010
Kentucky $62,470 $40,610 $102,810
Louisiana $62,750 $39,080 $101,760
Massachusetts $80,910 $59,950 $132,690
Maryland $78,050 $48,710 $128,300
Maine $63,780 $48,490 $101,040
Michigan $72,100 $47,630 $121,700
Minnesota $76,450 $48,660 $125,930
Missouri $62,320 $38,540 $114,520
Mississippi $60,320 $37,050 $102,140
Montana $65,500 $47,860 $103,030
North Carolina $77,030 $48,430 $129,850
North Dakota $62,320 $38,610 $101,270
Nebraska $62,750 $45,490 $101,850
New Hampshire $76,270 $48,710 $111,660
New Jersey $95,640 $61,980 $134,880
New Mexico $62,480 $46,300 $102,920
Nevada $61,920 $31,000 $100,480
New York $97,640 $59,020 $166,330
Ohio $69,600 $47,100 $120,080
Oklahoma $71,320 $46,710 $121,020
Oregon $75,880 $48,490 $104,420
Pennsylvania $73,490 $47,160 $123,120
Rhode Island $79,890 $49,150 $129,000
South Carolina $61,900 $39,220 $107,160
South Dakota $62,750 $48,400 $98,600
Tennessee $62,680 $46,390 $100,390
Texas $77,640 $48,650 $129,820
Utah $63,540 $37,270 $121,700
Virginia $78,780 $48,730 $131,550
Vermont $69,530 $48,060 $101,900
Washington $79,680 $57,310 $127,010
Wisconsin $74,770 $48,670 $104,730
West Virginia $62,980 $38,610 $101,660
Wyoming $62,980 $45,760 $101,760

Source: U.S. Bureau of Labor Statistics (BLS) 2021 median salary; projected job growth through 2030. Actual salaries vary depending on location, level of education, years of experience, work environment, and other factors. Salaries may differ even more for those who are self-employed or work part time.