Importance of Management Accounting and Break Even Analysis

Accounting
Information

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
Break even analysis:....................................................................................................................3
Importance for management accounting for the company how it different from the financial
accounting:...................................................................................................................................5
Techniques for the management accounting:..............................................................................6
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................7

INTRODUCTION
Financial analysis is about analysing the financial performance for the company.
Accounting is all about maintaining data for the business by its information. Accounting refers
for recording business transactions which helps managers for future decision making. Break even
analysis refers for useful in difference between the variable cost, fixed cost and the revenue.
Break even analysis indicates where the company is, or a new product or service, will be benefit.
Organisations uses accounting for its financial decision making (Baboukardos and Rimmel,
2016). The company which is chooses for this report is Walk about Ltd. This report includes
topics which are break even analysis, profits. Apart from this it includes topics which are
importance for management accounting how it different from financial accounting, techniques
for the management accounting.
MAIN BODY
Break even analysis:
Break even analysis:- Break even analysis is useful in difference between the variable
cost, fixed cost and the revenue. Break even analysis indicates where the company is, or a new
product or service, will be benefit (Christensen, Nikolaev and Wittenberg‐Moerman, 2016). In
organisation, it manages the size of unit to be sold, budgeting and setting targets, manage the
margin of safety, monitor and control the cost, helps in designing pricing strategy.
for units
75000
Particulars amount in units total amount
sales 11 825000
variable costs 6 450000
Contribution 5 375000
fixed costs 4.6666666667 350000
profits 0.3333333333 25000
A. break even point ( in units and amount)
Break even point ( in units )= fixed costs / ( sales price per unit – variable costs per
unit )