A Management accountant takes the help of various tools and techniques to assist the management in taking an informed decision. Analysis of Financial statements, Funds Flow Analysis, Cash Flow Analysis and Ratio Analysis are some of the popular tools. Apart from the above, he takes the help of various costing techniques such as Marginal Cost Analysis, Break Even Analysis, Cost Volume Profit Analysis, Analysis of Variances etc.
Definition: According to ICMA London, “Marginal Cost” is the amount for any given volume of output by which aggregate costs are changed, if the volume of output is increased or decreased by one unit”
Concept of Cost:
The British Institute of Cost and Management Accountants defines ‘Cost’ as the amount of expenditure incurred on given thing.
