Cost accounting methods are methods used to track and analyze the costs associated with producing goods or providing services. They provide invaluable insights into a business’s financial performance, allowing them to identify areas for improvement and allocate resources more efficiently. Cost accounting methods can be divided into two categories: direct costing and absorption costing. Direct costing focuses on directly attributable expenses associated with making a product, such as labour and materials. Absorption costing factors in overhead costs related to production, like rent, depreciation, and general maintenance. Cost accounting methods are an essential part of keeping a business competitive and profitable.