A responsibility centre is a unit or function of a firm headed by a manager who is directly responsible for its performance. It generates information and allows them to be used directly in motivating and controlling the action of each manager in charge of the responsibility centre.
Cost Volume Profit analysis is a technique for studying the relationship between cost, volume and profit. The profits of an undertaking depend upon a large number of factors.
Divisional performance measurement involves both the subjective and objective assessments of the performance of sub-units within an organization such as departments or divisions.
Responsibility accounting is that type of management accounting that collects and reports both planned actual accounting information in terms of responsibility centres.
Variance analysis is a tool that compares the standard or expected amount with the actual amount to evaluate performance. The analysis includes an explanation of the difference between actual and expected figures.
Standard costing is the preparation of standard costs and applying them to measure the variations from standard costs and analyzing the causes of variations to maintain maximum production efficiency.
Meaning, Features, Objectives, Scope, Advantages, and Disadvantages of Marginal Costing Meaning of Marginal Costing The term ‘marginal cost’, derived from the word ‘margin’, is a well-known concept of economic theory. The accountant’s concept of marginal cost differs from the economist’s concept of marginal cost. From the economist’s point of view, the cost incurred in producing an…
Limitations of Management Accounting Limitations of Management accounting is concerned with the presentation of accounting information to the management in such a way as to assist them in their managerial functions of decision-making, planning and control. Management accounting is developed because of management’s demand for information on past and present-day modern operations for foretelling coming trends. The…
Cost management is the process that involves planning, controlling, initiating and making decisions that improve the cost leadership of an organization.
Cost Control meaning Over some time, cost control has become much more important than mere cost ascertainment. The bigger the size of a business, the greater the importance of cost control. The Chartered Institute of Management Accountants, London defines cost control as “the regulation by executive action of the cost of operating an undertaking, particularly where such…