Cost accounting goal is to assist managers in achieving the maximum value for their organizations. Measuring the effects of decisions on the value of the organization is one of the fundamental services of cost accounts.
Providers of information = accountants
Users of information = managers
We want the value chain to be as efficient as possible
Value chain goes from beginning to end (complete end/disposal)
Managers evaluate value-added activities (activities that customers perceive as adding utility to the goods or services they purchase) to determine how they contribute to the final product’s service, quality, and cost.
Financial accounting teaches us to prepare and interpret financial statements
Cost accounting we understand how the individual stages contribute to value and how to work with other managers to improve performance.
Cost accounting is for managers or internal users – the one who make decisions for the organization. They do not need comparisons instead only use information relevant for the decisions that managers operating in a business environment with a particular strategy make.
Managers add value to the organization by the decisions they make.
From a different perspective, accoun- tants (you) add value by providing good information to managers making the decision. The better the decisions, the better the performance of your organization, whether it is a manufacturing firm, a bank, a not-for-profit hospital, a government agency, a school club, or, yes, even a business school. so estimates of future costs are more valuable for decision making than are the historical and current costs that are reported externally
This does not mean there is no “right” or “wrong” way to account for costs. It does mean that the best, or correct, accounting for costs is the method that provides relevant information to the decision maker so that he or she