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Cost accounting is a systematic process of recording, categorizing, analyzing and allocating business costs into various expense categories. It provides detailed cost information that helps businesses make informed decisions about product pricing, manufacturing processes, overhead allocation, and operational efficiency. By understanding the true costs associated with producing goods or providing services, businesses can optimize their operations, increase profitability, and plan for future growth. Cost accounting is a critical component of business planning and cash flow management, as it enables businesses to accurately forecast expenses, manage resources, and allocate funds effectively.