Cost accounting is the process of recording, classifying, and summarizing costs to determine the costs of products or services, plan and control costs, and provide information to management for decision making. It involves ascertaining, estimating, controlling, reducing costs and determining selling prices to facilitate financial statement preparation and operational policy. Cost accounting helps identify direct and indirect costs, fixed and variable costs, and normal and abnormal costs to provide information on cost behavior for managerial decision making. The key elements of cost include materials, labor, and expenses which are classified based on their nature, function, and behavior.