Explain the relevance of cost acconting in today's environment Includeconcepts covered. These are the role of cost accoutants, cost terms and purposes, job and process costing and the concepts of...

Importance of cost accounting and role of management accountant:
In today’s economic environment, Management accounting is very important area of concern for
every organization. Management accounting serves many purposes of an organization which
includes setting up prices to beat the competitors and earn required return on the funds invested,
managing and utilizing resources efficiently and effectively, to establish appropriate standards
for managers and employees, providing supply chain management system etc.
Role of a senior management accountant is very crucial for the success of an organization; senior
management accountant helps an organization in taking strategic decisions. In order to take
strategic decisions an organization has to segregate its relevant and irrelevant revenue and
expenses. In order to determine whether a particular item is relevant or irrelevant management
accountant uses its knowledge of the basic concepts of management accounting. Only relevant
items shall be considered while taking any decision.
Key role of strategic management accountant in an organization:-
Strategic management accountant plays vital role in an organization and helps it to grow and
sustain itself in the industry. When a company is growing at a fast pace it needs management
accountant to help in sustaining the growth by taking effective strategic decisions. Advent of
technology and introduction of new management tools has made it more important for an
organization to hire management account. Integration of information technology and
management accounting tools has become a useful weapon for an organization to sustain its
growth.
Strategic management accounting involves various steps and
management accountant plays important role in each step, the steps are
as follows:-
1. Formulating strategies.
2. Communicating strategies throughout the company.
3. Developing and carrying out tactics to implement the strategies.
4. Developing and implementing controls.
Tools of management accounting:-
Various tools which a management accountant can use to help the organization in taking better
decisions are budgetary controls, Variance analysis, Inventory management system, working
capital management system etc.
Budgetary control helps organization to determine standards for various areas of operations and
this in turn helps an organization to achieve budgeted results. Variance analysis is extension of
budgetary control, in variance analysis management accountant compares actual results with
budgeted results and the difference is termed as favorable or unfavorable. Favorable variances
are sign of good performance whereas unfavorable variances are sign of bad performance. After
computing variances...