Читать книгу Cost Accounting For Dummies - Kenneth W. Boyd - Страница 17

Cost accounting is closer to management accounting than financial accounting. Cost accountants gather information to make decisions about the future. Also, cost reports are considered to be internal reports. Both of those traits apply to management accounting.

You see overlap between cost and management accounting. A good example is special orders. A special order is an order you take on when you have excess production capacity. A customer approaches you about producing an “extra” order — an order you weren’t expecting. You need to decide what price you will accept for the special order.

Management accounting instructs you to consider only the cost and revenues that change, based on your decision, called differential costs and revenues. That makes sense, because the method is forward-looking. Old, unchanging stuff generally doesn’t count.

Your price for the special order depends on the costs. Reports you generate about costs help you make the decision to accept or reject the special order. If you’re producing cost reporting, that sounds like cost accounting to me. So you see how cost and management accounting can overlap. There’s more on special orders later.

Cost accounting sometimes uses historical information to start the analytical process. For example, when you plan your costs for next year, you take a look at spending in past years. Spending in prior year provides a starting point for planning costs — a baseline. The baseline is adjusted for all the foreseeable changes that might occur in the New Year. That helps you decide whether your budgeted costs should be higher or lower.