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Summary of Article
Topic: Practical Issues in Managerial Cost Accounting
Author Name: Dr. Dale R. Geiger
In this article Dr. Dale R Geiger observed that companies are facing many problem like decreased sale revenue due to increased market competition and in government sector facing decreased budget due to reduced borrowing and lower taxes.
Cost accounting is one of the different types of accounting systems that fall under management accounting. It is a system that has been developed to provide managers with a structure to examine the day to day finances of the company, while not having tax factors to worry about. From the information gathered, managers can make decisions on where to cut costs to improve the company’s profitability.
This article explore practical issues in cost measurement useful in the development of managerial cost accounting system. The Cost is very important for development any organization, it is very important to recognize the value of diversity in managerial costing system. Different organization in different environments employing different people unlikely to be efficiently served by any one system, role of managerial costing is a prerequisite to cost management. It is also important to understand the differentiation in managerial costing and external reporting.
Cost and Management Accounting practice helps an organization to survive in the competitive ever changing world because it provides an important competitive advantage for an organization that guides managerial action, motivates behaviors, supports and creates the cultural values necessary to achieve an organization’s strategic objectives. As an organization the degree of adaption with the new techniques or procedures it depends successful.
Many government organization are now finding their cost accounting systems inadequate to support the new cost management agenda.

Dr. Dale R Geiger give a Managerial Costing Differentiation Theory, He differentiated managerial costing and external reporting on several dimensions like purpose, measurement goals, measurement methodology, criteria for success and dynamics.

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Companies are required to publish annual and quarterly reports by the Securities and Exchange Commission. Government organization are required to submit budget reports by their legislative bodies. Managerial costing underline the purpose. The goal of managerial costing to gain useful insights into the costs of the organization. External reporting tends to develop highly defined accounting methodology otherwise the reporting would be unreadable to external users.
Cost accounting has a huge impact on the quality of decisions made by managers. Cost information is valuable in decision-making process to ensure the achievement of a production, an activity with a reasonable cost by eliminating waste and production factors which translate into greater efficiency. Managers make decisions that govern how a company reaches its goals. Many of these goals have financial aspects, such as revenue and profit targets. The level of costs included in such decisions has a major impact on the finances of the company.
Hence we know that cost accounting is a specialized branch of accounting which involves classifications, assignment and control of costs. The use of cost accounting concepts and practices is required for a company to be successful. Cost accounting helps managers make better decisions by providing key information for planning and controlling. Cost accounting assists with measuring performance, determining costs & prices for goods or services, reducing costs, managing costs, and analyzing the benefits of an activity or process. Companies need to measure their costs and then understand the behavior of those costs over varying conditions such as changes in the volume of goods or services produced. Once this has been done the costs can be assigned to the items produced or services provided and the profitability of each can be determined.

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