Municipal cost accounting has been described as the process of searching out all elements of cost required to attain a purpose, or to complete a unit of work, to carry on an operation, or to complete a specific job. Municipal cost accounting is used as an aid in policy determination, including fixing charges to the public and between departments, choosing between governmental and private performance of work, and estimating cost for future operations. It is also used as a guide to efficient performance of work, a protection against loss of materials, and various miscellaneous uses, such as aiding in preparing reports justifying expenditures. Several limitations in using municipal cost accounting should be noted however. Cost accounting itself costs money to install and operate, and for many activities, the cost would certainly exceed the value of the benefit obtained. In addition, unit costs cannot be properly interpreted without a knowledge of the conditions surrounding the performance of the work. Moreover, cost accounting is very complex and the information on municipal costing is inadequate. Despite these limitations, municipalities do choose this method more and more often. When a costing system is installed, the object accounts should preferably be removed to the cost books. The activity accounts may be made to serve as control accounts, or more detailed controls can be readily established by adding operation or major object accounts subsidiary to the activity accounts. The two systems of accounts thus can be properly coordinated. Footnotes are provided.