Management Accounting Tools and Techniques : Report
Added on -2020-07-23
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Introduction to Management Accounting
TABLE OF CONTENTSINTRODUCTION...........................................................................................................................1MAIN BODY..................................................................................................................................1Stating master budget and its process..........................................................................................1CONCLUSION................................................................................................................................5REFERENCES................................................................................................................................6
INTRODUCTIONManagement accounting is highly concerned with making improvement in the internalfinancial aspect and overall performance. This tool of finance is highly significant which in turnprovides input to the team of higher management for decision making. In this, manager appliesfinancial tools and thereby makes assessment of areas that require improvement. Thus,management accounting tools and techniques aid in profitable decision making and thereby makecontribution in the growth or success of organization. In this, the present report will providedeeper insight about aspect of master budget and steps which are involved in the preparation forsame. Further, it will shed light on the extent to which effectiveness of budget influences ifsenior management do not participate in such process. MAIN BODYStating master budget and its processBudget may be served as framework which contains income and expenses that businessunit will earn as well as incur during the specific time frame. Hence, after making in-depthevaluation of activities which need to be performed during a yearmanager of firm sets budget.There are several types of budget that can be prepared by business entity namely production,sales, material, labour, overhead etc. Hence, master budgetis the most effectualbudget which inturn interconnects or combines all the monetary aspect into one framework. Thus, it may beserved as a yearly budget planning or framework that encompasses all other budgets. One canalso prepare such budget on monthly and quarterly basis.Master budget is highly based on other specialized or individual budgets namelyoperating, capital expenditure and financial. Master budget is highly significant and makes vitalcontribution in the planning and control aspect.Moreover, by making comparison of the actualperformance with budgeted aspect manager can easily find out deviations that takes place inperformance aspect. In this way, by assessing the cause of deviation manager would become ableto take suitable action for performance improvement. 1
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