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OVERVIEW OF COST AND MANAGMENT ACCOUNTING
What is the primary objective of Cost Accounting?
The primary objective of Cost Accounting is to ascertain the cost of products or services and to help management in cost control, cost reduction, and decision-making.
What is 'sunk cost' and why is it irrelevant to future decisions?
Past cost already incurred and unrecoverable; ignored in future planning.
How does Management Accounting differ from Financial Accounting?
Management Accounting is forward-looking and focuses on internal reporting for managerial decisions, whereas Financial Accounting records historical transactions and prepares reports for external stakeholders.
What is 'differential cost' in management accounting decision-making?
Cost difference between two alternative courses of action.
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