Definition of Cost Accounting

Cost may be defined as the amount of cash equivalent or the fair value
of other consideration given to acquire an asset at the time of its acquisition or construction.

To the economists, cost is what must be given up in order to obtain something. Accountants, extending the perspective of economist, view cost as the value of economic resources used in the production of goods, services, income or profit. Accounting is a term desired from account and which is simply defined as an expression of transaction.

Brief description of Independent and Mutual-exclusive projects

Independent project

An independent project is one where the decision to accept or reject the project has no effect on any other projects being considered by the company. For example the decision to replace a company's computer system would be considered independent of a decision to build a new factory. 

Mutually-exclusive Projects

A mutually-exclusive project is one where acceptance of such a project will have an effect on the acceptance of another project. In mutually exclusive projects, the cash flows of one project can have an impact on the cash flows of another. Starbucks decision to buy Teavana will most certainly have a profound effect on the future cash flows of the coffee business as well as influence the decision making process of other future projects undertaken by Starbucks.