A cost system is an organized method to communicate and calculate the costs of a company’s operations. It takes into account every aspect of production – from purchasing materials and labor to overhead costs, taxes and more. By using a cost system, businesses can effectively manage their expenses and ensure that profits remain within acceptable levels. Furthermore, it provides helpful insights for decision-making, allowing companies to determine which processes are most efficient and how to reduce costs in the long run. With a cost system, businesses have complete visibility over their spending and can operate with greater efficiency.