Cost Accounting Explained: 4 Management Functions | CMA & CPA

What is cost accounting? It provides financial and nonfinancial information that managers use to make decisions, control operations, and carry out business strategy. This introductory lecture explains the role of cost and management accountants for accounting students, CMA candidates, and CPA candidates studying cost management. Professor Farhat walks through four management functions: strategic management, planning and decision-making, management and operational control, and preparing financial statements. Examples include product pricing, equipment decisions, cash planning, performance evaluation, inventory, and cost of goods sold (COGS). Try it free at https://farhatlectures.com — interactive exercises, lectures, simulations, cases, multiple-choice questions, and AI study tools for CPA, CMA, EA, and accounting students. CHAPTERS 00:00 Introduction to cost accounting 00:30 What cost and management accountants do 01:00 Financial and nonfinancial information 02:58 Internal users vs. financial accounting 05:06 Internal reporting and GAAP 05:58 Where cost accountants fit in an organization 06:31 The four management functions 06:55 Strategic management 07:41 Planning and decision-making 08:24 Management and operational control 09:16 Inventory, COGS and financial reporting 10:21 Strategic focus and cross-functional work KEY QUESTIONS How does cost accounting differ from financial accounting? Cost and managerial accounting emphasize detailed information for internal management decisions. Financial accounting emphasizes reports for external users under applicable reporting standards. Does cost accounting have to follow GAAP? Internal management reports can be tailored to the business's needs. Cost information used in external financial statements, including inventory and COGS, must support the applicable financial-reporting requirements. Why use nonfinancial information? Measures such as customer satisfaction help managers assess strategy and performance alongside financial results. CONTINUE STUDYING Cost Accounting Full Course:    • Cost Accounting Full Course | Complete Col...   Cost Management and Strategy:    • Strategic Cost Management: Cost Concepts, ...   #CostAccounting #CMAExam #CPAExam