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business law On tracing the history of financial accounting and cost accounting, we would notice that the scope of these subjects would seamlessly and imperceptibly

business law On tracing the history of financial accounting and cost accounting, we would notice that the scope of these subjects would seamlessly and imperceptibly move towards their greater use in managerial non-financial decisions. All such decisions would surely have financial repercussions in the long run. However, these will not be obvious in the short term. Thus, using correlated training costs and effectiveness, customer servicing time and customer satisfaction, customer sales and customer profitability is a typical application of management accounting. As the Institute of Management Accounting of the US defines it, management accounting is a value adding continuous process of planning, designing, measuring, and operating both non-financial information systems and financial information systems that guides management action, motivates behaviour, and supports and creates the cultural values necessary to achieve an organization's strategic, tactical, and operating objectives In every one of these segments of the value chain, management accountants help in identifying the key controllable factors and success factors, cost and efficiency, quality, time management, innovation, and benchmarking. They use standard costing and variance analysis to help the management to correct themselves for achieving operational and strategic targets. These functions are briefly described as under: Research and Development: Keeping a tag on the project cost and achievement of milestones, warning of the likelihood of future excess over project cost based on PERT cost analysis, choice of projects based on likely internal rate of return.

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