Cost Accounting and Management

Study Notes

Provides information for both management accounting and financial accounting.
Measures and reports financial and non-financial data related to the cost of acquiring or consuming resources by an organisation.

Describes the actions of managers in short-run and long-run planning and control of costs that increase the value for customers and lower the costs of products and services.
Entails the continuous reduction of costs.
A key part of general management strategies and their implementation.

Routine reporting: Daily, weekly reports.
Non-routine reporting: Outsourcing, design of a special cost control tracking system.

Provides information to investors, government authorities, and other outside company stakeholders on the organisation’s financial position, operations, and related activities.

Planning: Deciding on organisation goals, predicting results under various alternative ways of achieving those goals, and deciding how to attain those desired goals.
Control: Deciding and taking actions that implement the planning decisions, and deciding on performance evaluation and related feedback that will help future decision-making.
Budget: A quantitative expression of a plan of action and an aid to the coordination and implementation of the plan.

Compares actual results with budgeted amounts.
Examples: Revenues, Cost of Goods Sold, Wages, General, Fixed Costs, Operating Income.

Involves managers examining past performance and systematically exploring alternative ways to improve future performance.

Scorekeeping: Accumulating data and reporting reliable results to all levels of management.
Attention Directing: Helping managers properly focus their attention.
Problem-Solving: Identifying and resolving problems.

Customer Focus: Investing resources in customer satisfaction to attract and retain profitable customers.
Key Success Factors: Cost, Quality, Time, Innovation, Sustainability.
Continuous Improvement and Benchmarking: Searching for higher levels of performance within the organisation.

Treats each of the business functions in the value chain as an essential and valued contributor.
Integrates and coordinates the efforts of all business functions in addition to developing the capabilities of each individual business function.

Management accountant should be aware of digital disruption, rapid cognitive development, artificial intelligence, robotics, blockchain, and data availability.