Map of Prambachkirchen on Implicit in the economic concept of cost is the notion of sacrificing time, money, or other resources, in order to commit to the production of goods or services. After all, resources are scarce, and it is necessary to approach the use of scarce items with as much verifiable information as can be obtained. Cost accounting methodology therefore takes into account all perceived costs, including opportunity costs. Opportunity costs are the forgone benefits of the next best alternative when any scarce resource is used for one purpose over another. The use of qualitative measures is what sets cost accounting apart from financial accounting, which is only concerned with the external reporting of historical information to outside users. The cost accountant therefore analyzes a basic economic problem revolving around scare resources: to what end do scarce resources get devoted, and what ends are sacrificed? This combination of quantitative and qualitative analytics is unique in that it enables that which is perhaps the most significant pillar of capitalism, and that is economic calculation. Economic calculation necessarily depends on cost determinations, hence making cost accounting an essential apparatus for the individual entrepreneur as well as the competitive market force as a whole. Map of Prambachkirchen 2016.
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