USERS OF COST AND MANAGEMENT ACCOUNTING (INTERNAL USERS)

USERS OF COST AND MANAGEMENT ACCOUNTING

Cost and management accounting information which are generated or collected are used by different stakeholders. The users of the information can be broadly categorised into internal and external to the entity. 

Internal Users

Internal users, which use the cost and management accounting information may include the followings:

(a) Managers- The managers use the information

(i) to know the cost of a cost object and a cost centre

(ii) to price for the product or service

(iii) to measure and evaluate performance of responsibility centres

(iv) to know the profitability- product-wise, department-wise, customer-wise etc.

(v) to evaluate the strategic options and to make decisions

(b) Operational level staffs- The operational level staffs like supervisors, foreman,

team leaders are requiring information

(i) to know the objectives and performance goals for them

(ii) to know product and service specifications like volume, quality and process etc.

(ii) to know the performance parameters against which their performance is measured and evaluated.

(iii) to know divisional (responsibility centre) profitability etc.

(c) Employees- Employees are concerned with the information related with time and attendance, incentives for work, performance standards etc.