Compiled Notes

, and
Introduction to management costing terminology .




Management accounting → application of
principles of
accounting and financial management to :




create , preserve and increase value for state holders
.
.




↳ support value creation in
organisations .




→
Management accounting includes cost
accounting

↳ record , classify and summarise cost data .




→ Covers both financial and non - financial information to set goals and forecast performance .




→ Serve the purpose it is intended for .




Management Accounting us .
Financial Accounting .




( confidential )
(public )




FA convergence
with MA :




→
required basic cost ( inventory valuation methods)


Management accountants
today are part d- the management team .( decision influencer)



↳ keep for innovation that help with efficiencies and competitive advantage
eyes can .

, Cost object →
product , service centre , activity ,
customer in relation to which costs are ascertained .




↳ items for which cost measurement is
required .




Cost Driver → factor that causes a
change in the cost of an
activity .




Cost classification for financial reporting purposes : .




Capitalised costs : .


recognised as Assets CSCFP )



pens ed periodic
F- ✗ -
costs : .

recognised on basis as
expenses ( Is )




Cost classification for Management Accounting Purposes : .




-0--7-00 Me


By cost function : .




Product cost → Total cost of
purchasing / delivering

cost of sales : → direct material .




→ direct labour


→ overhead .




Inventory held : → raw materials ( materials had far und )


work
→ in
progress ( Unfinished goods)
- -




held for
→ Finished goods ( sale )




Trading businesses : .
Service business : .




-
Cost of sales -

( I / 5) -


Operating cost related to
provision of service (IIT)


Inventory held ( SOFA
- -
No
inventory or Cort of sales .