Key Differences Between Cost Accounting and Management Accounting
- The accounting related to the recording and analysing of cost data is cost accounting. The accounting related to the producing information which is used by the management of the company is management accounting.
- Cost Accounting provides quantitative information only. On the contrary, Management Accounting provides both quantitative and qualitative information.
- Cost Accounting is a part of Management Accounting as the information is used by the managers for making decisions.
- The primary objective of the Cost Accounting is the ascertainment of cost of producing a product, but the main objective of the management accounting is to provide information to managers for setting goals and future activity.
- There are specific rules and procedure for preparing cost accounting information while there is no specific rules and procedures in case of management accounting information.
- The scope of Cost Accounting is limited to cost data however the Management Accounting has a wider area of operation like tax, budgeting, planning and forecasting, analysis, etc.
- Cost accounting is related to ascertainment, allocation, distribution and accounting face of cost. On the flip side, management accounting is associated with impact and effect aspect of cost.
- Cost accounting stresses on short-range planning, but management accounting focuses on long and short range planning, for which it uses high level techniques such as probability structure, sensitivity analysis etc.
- While management accounting can’t be installed in the absence of cost accounting, cost accounting has no such requirement, it can be installed without management accounting.