Variance analysis is used to observe how well a business is performing and how close actual costs are to the standard cost. An accounting variance is defined as the difference between actual cost and standard cost. Variance analysis uses the standard versus actual amount to judge the performance. The analysisRead More →
Cost Volume Profit Analysis is a method of accounting that looks at the impact that varying levels of costs and volume have on the operating profit of a business. It helps to understand the interrelationship between cost, volume, and profit in an organization. There are three factors in Cost VolumeRead More →
In a break-even chart, the angle of incidence is formed at the break-even point where the total cost line intersects the total sales line. This angle shows the rate of profit earning of the company. Basically the angle of incidence forms when the company’s sales line intersects with the company’sRead More →
Standard costing is a technique of costing which is used to compare the costs and revenues associated with a product with the actual results and determining the variances. It analyses the productivity of an organization. Standard costing focuses on measuring the performance, controlling the deviations, inventory valuation, and deciding theRead More →
Marginal Costing is a very useful decision-making technique. It helps management to set prices, compare alternative production methods, set production activity level, close production lines, and choose which of a range of potential products to manufacture. Following are some techniques which highlight the application of marginal costing in decision making-Read More →
Marginal Costing Marginal Costing is the process of ascertaining marginal cost, by differentiating between fixed cost and variable cost, and of the effect on profit of changes in volume or type of output. In marginal costing, fixed costs are never charged to production. They are treated as period charge andRead More →
Fund flow statement is a statement which shows the sources and uses of funds for a period of time. It is a method by which we study changes in the financial position of a business enterprise between the beginning and ending financial statement dates. According to Anthony “the fund flowRead More →
Cash flow analysis is the evaluation of a company’s cash inflows and outflows from operating, financing and investing activities. It shows how the company is generating its money, where it is coming from, and what it means about the overall value of the company. Cash flow analysis should be doneRead More →
Meaning of Ratio Analysis Ratio analysis is the process of analysis and interpretation of the figures appearing in the financial statement (i.e. profit and loss account, balance sheet, and fund flow statement etc.) It is a very important tool useful for measuring the performance of an organization. It enables usersRead More →
Meaning of financial statement analysis The term financial statement analysis and interpretation refer to the process of determining the financial strength and weaknesses of the firm by establishing a strategic relationship between the items of the balance sheet profit and loss account and other operative data. According to John N.Read More →
A management accountant is a person who looks after a company’s financial accounts. They advise the businesses regarding financial planning and its implications on the business for making better business decisions to aid growth and profit. They are responsible for advising the top management on the following: Different sources ofRead More →
Difference between Management Accounting, Cost Accounting and Financial Accounting MANAGEMENT ACCOUNTING – In simple words management accounting can be defined as that tool that provides accounting information to carry out management activities such as planning, controlling, evaluating, and decision making. It helps the managers in identifying problems, formulating strategy, decision makingRead More →