Businesses have different types of costs. An expense is a type of expense that flows through the income statement and is subtracted from income to get net income. Due to the accrual principle in accounting, expenses are recognized when they are incurred, not necessarily when they are paid. Cost accounting is a form of managerial accounting. The mentioned accounting is aimed at covering the total costs of production in companies through the estimation of variable costs. This applies to all production steps as well as fixed costs such as rental costs. Cost accounting is most useful for internal management in companies. Cost accounting provides the company's management with data on the costs of specific products, supplies, activities or functions in the company and compares actual costs with predetermined values. Jadran-galenski laboratory d.d. is a significant player in the pharmaceutical industry in the Republic of Croatia. As one of the three largest manufacturers, it operates in a competitive environment together with other large companies such as Belupo d.d. and Plive d.o.o. Their classification as a large entrepreneur according to the amount of total assets, income and number of employees indicates significant economic power and potential for further growth. Managing business costs is critical to the success of any company because it directly affects profitability and competitiveness. A proactive approach allows managers not only to monitor existing costs, but also to anticipate future costs and develop strategies for their reduction or optimization. This approach includes the analysis of costs throughout the production cycle, as well as the evaluation of all activities related to products and services.