Cost and management accounting

Cost accounting records what a product or service costs; management accounting uses that information to decide prices, product mix and budgets. The most powerful single tool is break-even analysis: the point where revenue exactly covers costs. Worked example: a firm with fixed costs of ₹2,00,000, selling price ₹100 and variable cost ₹60 per unit has a contribution of ₹40 per unit, so its break-even point is 2,00,000 ÷ 40 = 5,000 units.