Slang Cost and Performance Accounting Part I

The cost and performance accounting (CPA) is a list of services that – in contrast to classic bookkeeping – refers to the internal costs . For example, these can be costs due to resources that arise when different products are produced.

Full definition

When building a business or a company, the main focus is on accounting , which is mandatory depending on the type of company . Often, however, only external expenses and income are taken into account. For example, the costs that arise when the company-specific product is ordered by a supplier. This does not take into account the fact that , depending on how it is structured, certain costs can also arise within the company .

What is cost and performance accounting?

According to, the cost and performance accounting, CPA for short, therefore focuses on costs that can arise in operation . With this calculation, the entrepreneur can define how economical the internal processes really are and whether they will bring the desired success in the long term.

Aim of cost and performance accounting?

The purpose of this cost and performance calculation is to define exactly where the specific costs are incurred and how they can be optimized . This could be, for example, costs for the personnel or for the necessary machines.

If it is precisely defined where the costs or possibly excess costs arise, then this is an area that can be optimized by the entrepreneur through new approaches .

Required data for cost and performance accounting

The data required for cost and performance accounting are based on three basic aspects:

  • 1. The types of costs : This term is self-explanatory, as the type of costs can be divided into different categories depending on the type and area of ​​the company .
  • 2. The cost unit : The cost unit is the service or product that is offered in the company.
  • 3. The cost centers : The cost centers are the defined locations and areas in the company where certain costs arise.

The entrepreneur should ask himself the following questions, among others:

  • “Which product or service is responsible for the greatest cost ?”,
  • “Which product or service offers the greatest profit ?”
  • and ” Where can costs be saved ?”

These questions can be answered with cost and performance accounting.

Division of cost and performance accounting into three areas

The cost accounting is divided into the just mentioned three areas: We speak here of the cost type accounting , the cost center accounting and cost accounting .

Cost type accounting

With cost type accounting , it is precisely determined which costs have arisen in the company. For this reason, it is also the first step in cost and performance accounting and therefore provides the basis for further analyzes and calculations.

Determination of the costs incurred

In the cost type calculation, various points are clarified which should then lead to the fact that it can be shown exactly where and how the costs were incurred by your own company .

These points can be:

  • Cost breakdown : The cost breakdown is the exact definition of the individual categories that can be set up for the costs. This helps to show in which area or in which category the most costs arise.
  • Employment level : The employment level defines the connection between the current and the maximum production ratio .
  • Cost function : The cost function describes the connection between production and the costs incurred . This defines whether the service is in line with the costs.
  • Cost influencing variables : With the cost influencing variables, it is analyzed which external conditions have an influence on the costs.

This is only a small selection of possible ways of dividing and specifying costs. There are some other issues such as the cost theory , the cost breakdown , the limit number , the break-even point and the specific cost categories .


To understand exactly what cost type accounting is, an example is the simplest solution. Let us assume a company sells porcelain tableware through an online shop. These are extremely easy to destroy and must therefore be optimally protected. This is done through optimized packaging with special protection.

There are additional costs that are referred to as special items. These also belong to the internal costs .

Cost center accounting

In cost center accounting , the costs incurred are taken and precisely analyzed where they were incurred in the company, such as in production. This helps to show in which areas of the company the most costs are incurred .

Cost and Performance Accounting 1