Basics of Cost Accounting is a method of understanding and recording the costs of producing goods or services. It allows for the careful tracking and analysis of how much it takes to make a product, to allow for better business decision-making. By looking at the various components of what goes into making a product, like labor, materials, and overhead, businesses can then make well-informed plans on how to increase efficiency, decrease expenses, and optimize production. With a comprehensive understanding of cost accounting principles, companies can create accurate budgets and better manage their finances.