Managerial Accounting Principles

Eight factors and characteristics differentiate traditional managerial accounting from financial accounting: (1) Managerial accounting focuses on providing data for the internal use of an organizations managers, while financial accounting focuses on providing data for external uses by investors and creditors. In this context, the application of managerial accounting principles in the public sector is appropriate; (2) Managerial accounting emphasizes the future, while financial accounting emphasizes the current period and the past. In this context, the application of managerial accounting principles in the public sector is appropriate; (3) Financial accounting is governed by ge

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eakeven charts and other management accounting tools. It should be noted that some costs tend to straddle the fixed/variable classification line; a factor for which financial managers must be especially alert. Cost classification of this type is more valuable to a profit-oriented organization than to the typical governmental organization. Production costs are also considered in the context of concepts such as full costs, direct costs, indirect costs, job costs, process costs, standard costs, joint costs, and others. Each of these concepts provides the manager with a different perspective of costs. These different perspectives may provide a means of enhancing the efficiency of an operation, without damaging the integrity of the firm, even though most of the costs derived through the application of these concepts of costs will differ from the costs derived through the application of financial accounting concepts. This approach to cost accounting, a part of managerial accounting, can be beneficial in a public sector organization, although greater benefits from such cost accounting will likely be derived in profit-oriented organizations. The use of costs derived through the application of these managerial accounting concepts
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Approximate Word count = 1595
Approximate Pages = 6 (250 words per page)

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