Inventory Cost Accounting is an accounting process used to track the cost of inventories from the purchase or production stage through to sale. This method is used to calculate inventory costs, as well as associated expenses such as taxes, freight and handling fees, storage costs and more. With proper inventory cost accounting, businesses are able to gain accurate insights into the true and total cost of their inventories, enabling them to make better-informed decisions about production, purchasing and pricing. By understanding how much it costs to hold stock, businesses can optimize resources and maximize profitability.