Cost accounting concepts and objectives Usually there are three management levels The operating management The middle management The executive management

Role of three levels These three levels of management control all the planned activities of the business The first phase is planning Continuous observation of plans is known as control Planning consists of a comprehensive operational plan which covers all the phases of all the operations Control is basically that force which guides the management for the achievement of specified goals by comparing actual with planned

The concept of management Management basically deals with planning establishing policies making decisions giving orders in order to achieve the desired results These desired objectives can be achieved by management together with the effort of all the employees controlled by the management through two basic functions Planning controlling

planning Planning is the first most essential phase as it is decided how to allocate resources to achieve possible and desired objectives Planning is looking ahead and preparing for the future and it involves a choice between different alternatives all leading towards a common goal the choosing between them is known as decision making

Control Control is basically the systematic effort of comparing the actual results of operations with Plans Continuous supervision of an activity job or task is necessary to keep the operations on track and within required boundaries termed as budgets or standards comparison is made between actual and budgeted and the differences are accounted for as needed

Responsibilities of three levels of management Overall planning responsibility rests on the shoulders of executive management and the final analysis in the hands of the president The major plans are than broken and divided between middle and operational management to achieve maximum efficiency

The nature of cost accounting Cost accounting also known as management accounting or managerial accounting is the biggest source of information for the management in planning and controlling phases As cost accounting records all the costs related to material labor and other expenses it helps the management to set market prices for the goods manufactured

Cost accounting in control phase In control cost accounting continuously records all the costs of operations and management continuously compares these actual results with standards or budgets Cost accounting frequently gives information about each and individual product if its making profit or loss

Scope of cost accounting Cost accounting is usually considered in manufacturing organizations but in these days economy cost accounting principles are used by any organization in which any item of monetary value involves and takes part in day to day operations like insurance companies transportation companies school colleges e.t.c

The cost department This department is responsible for keeping records of all the costs of manufacturing and non manufacturing activities Cost accounting issue control reports for the management for better planning and decision making the cost department concerns with the recording of costs and revenues for operations already happened