Different practices of financial and management accounting result in the same costs being treated and presented in different ways leading to confusion. International Federation of Accountants (IFAC) is trying to develop a body of generally accepted cost accounting practices that provide clearer insights into cost behavior so that managers can control them better. Resource Consumption Accounting is one such focus.
Methods of Cost & Management Accounting
Job Cost Accounting: Costs are identified and accumulated to specific jobs (which might involve a single product, say a building, or a batch of multiple products). Such direct costs are only accumulated to the extent considered economically worthwhile. Other operating costs (overheads) are allocated to jobs in predetermined ways.
Process Costing: In process costing, costs are accumulated by production processes, and then allocated to the products passing through the process.
