Benefits of Management | Management Accounting

Running head: MANAGEMENT ACCOUNTING
Management Accounting
Name of the Student
Name of the University
Authors Note
Course ID

MANAGEMENT ACCOUNTING1
Table of Contents
Introduction:...............................................................................................................................2
Discussion:.................................................................................................................................2
Issue 1:...................................................................................................................................2
Understanding difference between cost and value:................................................................2
Reasons why management accounting information can better meet the management neet:. 3
Issue 2:.......................................................................................................................................4
Benefits of cost behaviour:.....................................................................................................4
Two often-used approaches of obtaining cost formula:.........................................................5
Common problems faced in the process of collecting information for analysis:...................6
Recommendations:.....................................................................................................................7
Conclusion:................................................................................................................................7
References:.................................................................................................................................8

MANAGEMENT ACCOUNTING2
Introduction:
The present report will be addressing the board of directors of Pieter Knol regarding
the importance of understanding the cost involved in making product and providing a service
in a systematic manner. The report aims at addressing the benefits of management to Pieter
Knol regarding the timely portray of information to management (Collis, Jill, and Roger
2017). A convincing reason will be provided to the board of directors and Pieter Knol
regarding the reasons of using management accounting information to meet the specific
business needs. The report will also demonstrate the benefit of understanding cost behaviour
and would explain two most regularly used approach of obtaining cost formula.
Discussion:
Issue 1:
The prices that Pieter Knol charge for its products should be viewed as a highly
notable business decisions the board of director makes. The board should understand that
setting price very high or very low will either yield best result or would limit the business
growth. At worst it may contribute to serious business problems for their sales and cash flow
(Datar and Madhav 2018). Below stated are the explanation which is critical to understand
for the board and Pieter Knol on what it clearly costs to product a product in a systematic
manner and recording the same in a proper manner.
Understanding difference between cost and value:
The board of director and Pieter Knol should understand the difference amid cost
value as it increases profitability. The board should understand the cost of product or services
as the sum it spends to make a product. Price should be viewed as financial reward for
offering product or service and the value should be viewed as something which its customers
believe the product or service is worthy to them (Kaplan, Robert and Anthony 2015). The