Managerial accounting is different from cost accounting in that it takes into account more than the cost of the perpetual inventory system; it also has to make decisions based on the needs of the whole company. Cost accounting deals with the process of tracking recording and analyzing costs that are associated with a company’s product or project. As an internal manager, they are the ones that normally use the cost accounting information. Direct costs, indirect costs and overhead costs are what are included in the cost accounting. This information is then used by managers when decisions are made dealing with company costs and how to improve profit (Wild & Shaw, 2012).
Management accounting provides other department managers on the business decisions that will allow them to their management and control functions equipped. This accounting is not accessible by everyone especially when it comes to making major decisions. In the end the account manager is the primary and the rest of the employees may have an opinion but not the final word.
Cost accounting does work or operate with the management accounting. This accounting is what managers use to make their decisions on what is for the greater good of a company to stay profitable. Accounting as businesses became complex. More date that is comprehensive is needed to help when management makes decisions other than the typical Product Costing reports. (Wild & Shaw, 2012).
Lean production philosophy is based off of two components. The first is when the company thinks of want to eliminate waste in its accounting process. An efficient process means an agile one - which can quickly adapt to customer demands (eba, n.d.). Leadtimes, or the time that it takes to produce a product or service, can been shortened. It the leadtime can be shortened, waste can be removed and operations can become for resourceful which