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CMA - THE BRAIN BEHIND THE BUSINESS ################################# What is cost and management accounting? Accounting is a business language. We can use this language to communicate financial transactions and their results. Cost accounting and management accounting are two important terms in accounting that are used to control and formulate the organization policies. Both are used for different purposes with different styles. Cost accounting ############ Cost accounting deals with the calculation and assessment of costs and expenses to purchase or produce something. It relates to calculation per unit cost using different costing techniques. Its primary purpose is to facilitate managers in decision making. The main activities of cost accounting are: 1) Budgeting: In cost accounting, various budgets are prepared, showing cost, revenue, profit, production capacity and efficiency of plant and machinery, as well as the efficiency of workers. The budget is planned in a scientific and systematic way that is often unique to the company, as reports are not bound to the principles of Generally Accepted Accounting Principles (GAAP). 2)Classify and break down costs for external reporting and internal profit measurement. Since costs are calculated on a detailed level, identifying profitable and unprofitable items or activities becomes easy. 3) Information on costs and activities may be used as a basis to estimate future costs in preparing and reviewing budget estimates 4)Determine the fees or prices for goods and services: in tough market conditions or in slump periods, costing helps to determine the selling price of the product at the optimum level to be competitive. Management accounting ################## Management accounting relates to the provision of appropriate information for decision-making, planning, cost control and performance evaluation. Management accounting turns data into information, knowledge, and wisdom about a business entity’s operations. This is one step further than cost accounting. Management accounting works to know the reasons of profit or loss and studies the factors which influence efficiency to assist in decision making. Therefore, cause and effect is an important feature of management accounting. Conclusion ######## In short, cost accounting supports management accounting and in turn management accounting pushes cost accounting further according to the needs of the management. ################################################## FWI - THE FINANCE SCHOOL CMA | ACCA ADMISSION CONTINUES FOR THE UPCOMING BATCHES........ FOR ENQUIRY CONTACT : 8330812121 ################################################## #CMA #COST_ACCOUNTING #MANAGEMENT_ACCOUNTING #CMA_TOP_INSTITUTES_IN CALICUT #CMA_LOW_COST_KERALA #CMA_COPE_IN_INDIA #CMA_COACHING #CMA_JOB_OPPORTUNITIES
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