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Cost Accounting Managerial Accounting and Its Uses

Cost accounting managerial accounting is that branch of the accounting that is concerned with the calculation of the actual costs that are involved in all the operations that the company indulges in. It is one of the most important parts of accounting. The cost accounting managerial accounting is done only for the use of the management of the company. The internal managers as well as the decision makers in an organization require the reports that are prepared by the cost accountants in order to determine the processes that are making profits and those that are resulting in losses. Cost accounting managerial accounting does not have to adhere to any of the guidelines that are prescribed by any of the accounting bodies like GAAP since it is meant only for the internal assessment of the company.

Cost accounting management accounting is very much crucial to the growth and development of the company. It determines and assigns the cost to the products as well as services on the basis of the costs incurred by the company in the entire lifecycle of the production.

Some methods of the cost accounting that are used by the companies are:

  1. Standard cost accounting
  2. Throughput cost accounting
  3. Resource consumption accounting
  4. Cost-volume-profit analysis
  5. Activity based accounting
  6. Lean accounting
Cost accounting managerial accounting takes into account the variable as well as the fixed accounts. It is important to note the difference between the two as the pricing of the products depends on them. Those costs that fluctuate with time are known as the variable costs whereas the costs that remain fixed at any given point of time are known as the fixed costs. Both of these parameters are taken into account while fixing the costs of the products and services of the company.