What is managerial accounting?

Definition of Managerial Accounting

Managerial accounting is also known as management accounting and it includes many of the topics that are included in cost accounting.

Some of the managerial topics involve the computation of a manufacturer's product costs that are needed for the external financial statements which must comply with US GAAP. Other topics involve analyses and reports that are not distributed outside of the company but are used by management in its decision making and in the planning and control of the business operations.

Examples of Managerial Accounting Topics

Managerial accounting topics often include:

  • Job order costing
  • Process costing
  • Absorption costing vs. variable costing
  • Understanding cost behavior and cost-volume-profit analysis
  • Operational budgeting
  • Standard costing and variance analysis
  • Activity based costing
  • Pricing of individual products and services
  • Analyzing the profitability of product lines, customers, territories, etc.
  • Capital budgeting
  • Ratio analysis