Cost and Management Accounting

6 minute read
Cost and Management Accounting

Forming a vital component of Accounting studies and practice, Cost and Management Accounting aims to manage and optimally reduce costs along with ensuring that the set standard of cost-related procedures is followed. In an enterprise, small or big, profitability is a function of both cost and revenue, i.e, favourable cost and revenue numbers translate into higher profitability and vice versa. This blog will focus on summarising, in brief, what is cost and management accounting, the exams in which it is a core part and its varied other features.

Degree Certificate
Full Form Cost Management Accounting
Duration 3 Years
Age Minimum 17 years
Minimum Percentage 50% with commerce in HSC
Average Fees INR 50K – 2.5 LPA
Average Salary INR 2.5 LPA – 7 LPA (Source: Payscale)

What is Cost and Management Accounting?

In today’s world, business/financial decisions are largely tripoded on a heavy amount of analysis of data related to the financial aspects of business and cost and management accounting aims to make those decisions in an informed manner. Since costing considers both fixed and variable costs arising throughout the line of business of the corporation, be it manufacturing, production or services industry, it helps in the calculation of a comprehensive measure of analysis.

Eligibility Criteria

The eligibility criteria for pursuing Cost and Management accounting are as follows:

Qualifications for Foundation level

  • The applicant must have successfully completed class 10 or any other equivalency from a recognised board or institution.
  • The candidate must have passed the senior secondary (10+2) exam or any other exam that is an equivalent from a board or institution that is recognised.

Qualifications for Intermediate level

  • The candidate must have passed the senior secondary (10+2) exam or any other exam that is an equivalent from a board or institution that is recognised.
  • The applicant ought to have passed the ICAI’s foundational exam.

Qualifications for the Final Level

  • The candidate must have passed the senior secondary (10+2) exam or any other exam that is an equivalent from a board or institution that is recognised.
  • The applicant must have passed the ICAI’s intermediate-level exam.

Also Read: Diploma in Financial Accounting

Admission Process

There are two different ways to apply for CMA admission in India. It can be done either in person at the college or university by going to the admission office or online through the admission portal. The course admissions process is strictly based on the marks from the 10+2 commerce classes, with a minimum of 50% overall marks. As a result, candidates applying for the programme must meet the prerequisites for the CMA programme, which include grades in their 10+2 classes and success on the CMA entrance exams.

Subjects Covered

The subjects covered under cost and management are vast and not only include the various types of costs but also include the study of variegated costing methods, budgeting techniques and cost audits, amongst others. They help managers understand and interpret cost-related information, in turn aiding them to interpret the overall financial statements of a company. In the long run, to adopt new-age and innovative cost optimisation systems, managers rely on this information as well. Some of the major subjects under Cost and Management Accounting include:

  • Material and Labour Cost
  • Direct Expenses & Overheads
  • Cost Records
  • Costing Systems
  • Marginal Costing
  • Standard Costing
  • Budget, Budgeting and Budgetary Control
  • Activity-Based Costing
  • Cost Accounting Records and Cost Audit
  • Analysis and Interpretation of Financial Statements

Note: This list of subjects has been taken from ICAI’s Cost and Management Accounting Paper Syllabus.

Also Read: How to Become a Chartered Accountant

Top Colleges and Fees

The cost of a CMA course in India ranges from 50,000 to 2.5 LPA. The level of education offered to students as well as the college/facilities university and amenities may even cause them to vary. Depending on the college or university that students choose, the CMA fee structure may vary. The structure of CMA fees for colleges in India is as follows:

College Name Fees Per Annum (INR)
Lakshya Academy, Kochi 25,000
Amity University, Lucknow 65,000
Shobhit University, Meerut 40,000
Jain University Bangalore 50,000
BCMS, Bangalore 1 LPA

Exams & Courses

Firstly, Cost and Management Accounting is part of Module 1: Paper 2 in CS Executive Syllabus and in Intermediate [Paper 3] of the CA course. Further, it is included in a plethora of undergraduate and graduate-level Accounting courses such as BCom, BFM Course and MBA in Accounting, amongst others. Further, management accounting is also offered by the globally recognised ACCA certifications.

Read More About: How to Become a Company Secretary

Books 

In order to study Cost and Management Accounting in detail, several books are recommended, out of which a few have been mentioned below.

S.No. Book Link
1 A Textbook of Cost and Management Accounting by M. N. Arora Click Here
2 Padhukas Student handbook on Cost and Management Accounting:
CA Inter New Syllabus by CA B. Saravana Prasath
Click Here
3 Cost Accounting: Texts & Problems by M. C. Shukla and T.S.Grewal Click Here
4 Modern Cost and Management Accounting by Hanif Click Here
5 Cost & Management by Ravi M. Kishore [with CD] Click Here

Related Articles You Must Read: CA Subjects

Cost Accounting vs Financial Accounting

While costing techniques help in making managerial decisions within a company more effective, financial accounting is undertaken solely from the perspective of an outsider. It mainly concerns customers, investors, creditors, auditors etc. who have an existing or potential interest in the company. On the other hand, the motive of Cost and Management Accounting is to improve cost-related processes within the organisation. Tasks may include, the determination of standard costs of a particular procedure, and a measure of the current cost [based on performance]. Comparison and contrasting of results obtained and figuring out solutions as to the aspiring disparities. Further, cost accounting also aims to reduce the overall costs as well reducing the overall burden on capital.
Though Cost and Management Accounting or, in general, Accountant courses, are extensively technical, offer exciting and lucrative career opportunities in industries of Finance, Consulting and Strategy, amongst others.

Jobs and Salary

The following table displays the typical annual salary offered in various job roles following the completion of a qualification in the field of cost management accounting:

Job Roles Average Annual Salary
Financial Analyst Rs. 5 – 6 lakhs
Financial Controller Rs. 7 – 20 lakhs
Financial Manager Rs. 6 – 10 lakhs
Financial Director Rs. 20 – 30 lakhs
Chief Financial Officer (CFO) Rs. 20 – 40 lakhs

Top Recruiters

  • Nestle
  • Master Card
  • TATA
  • IBM
  • Standard Chartered
  • Walmart
  • EY
  • Amazon
  • Walter Bushnell
  • CITI
  • Quin Street 

Future Scope of CMA Certification

According to a survey, accounting is one of the industries that business/commerce graduates prefer to work in. The Times of India carried out the poll. Students with a background in business should consider pursuing a career in accounting or auditing because there are many opportunities available. Obtaining an education in the accounting field will provide in-depth knowledge of the business world and open up excellent career opportunities.

Professionals with training in cost management accounting have the ability to handle work for large corporations. Since every business needs professionals for their accounting needs, a career in cost management accounting is not only secure but also pays well.

Every year, many businesses in India hire specialists in this area. Some of the top scorers are immediately chosen and hired by major corporations. Additionally, it provides the necessary edge for education and training in this field, enabling one to work both domestically and abroad and still earn a living. It creates opportunities and qualifies professionals for employment with major corporations and MNCs all over the world.

FAQs

Which degree is best for cost accounting?

For some entry-level positions, candidates with associate’s degrees and relevant experience may be qualified. A cost or management accounting specialisation programme is ideal for prospective students who want to major in accounting.

How to study cost and Management Accounting?

Learn the fundamentals before looking into cost and management accounting. Get a solid understanding of the concepts and methods, then practise, practise, and more practice. Be tolerant. If you don’t get it the first or second time, things will start to improve by the third or fourth exercise.

Is cost and Management Accounting a degree?

A certificate programme in cost and management accounting is created to prepare students for employment in various corporate roles and industries. The Institute of Cost Accountants of India is responsible for awarding the CMA course credentials in India (ICAI).

Needless to say, entering such fields requires consistent efforts and a single-goal-oriented approach. Consult the experts at Leverage Edu and we’ll guide you in finding a suitable course and university that can equip you with immense knowledge and exposure to make a successful career in Accounting. Book a 30-minute free counselling session for all your study abroad queries.

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