Management Accounting: Data for Decision Making, Cost Methods, and Budgets

MANAGEMENT ACCOUNTING

Contents
INTRODUCTION...........................................................................................................................1
1. Assessment of type of data required for management in relation to decision making.......1
2. Selection and application of appropriate management accounting and cost method.........3
3. Functional and master budgets for a variety of organisational scenarios...........................4
CONCLUSION................................................................................................................................5
REFERENCES................................................................................................................................6

INTRODUCTION
Concept of management accounting is quite primordial as it is being used in organisational
context in order to meet several organisational objectives. This study extracts the criticism from
different authors subject to use of these budgets by organisations (Boyns and Edwards, 2013).
The report presents the critical analysis of the need and process of making budgets and the
discuss the evaluation of modern budgeting terminology like Balance Scorecard and Activity
based budgeting.
1. Assessment of type of data required for management in relation to decision making
Managerial decision mainly based upon future feasibility of business and effectivity.
Enhancing of profitability and profitability of business is the last objective of managers and
organisers. Management accounting relates to accounting reporting. It helps administration to
accurately perform all its tasks, including scheduling, arranging, hiring, directing and controlling
with both the aid of accounting data. It offers the essential information required to support
leadership in policy-making between day and-to-day activities. Management accounting
responsibilities contains all related activities to the manager's collection, storage, analysis and
presentation of data. In accounting it includes setting up expense centres, planning schedules,
preparing reports for controlling costs and establishing accountability for functions. In J's
opinion. Batty, ' management accounting ' is the term that describes the methodologies of
accounting, frameworks and strategies that, combined to specific skills and knowledge, support
administrators in profit maximization or reducing loss (Siyanbola, 2013).
Effectiveness of decisions and strategies are mainly recognised effective if the taken
decisions have been increased the revenues or decreased the cost of operations for business. So,
in both the direct and indirect point of view management decisions remain related to revenue and
cost of entity. In financial terms the cost and benefit analysis mainly carried out by the managers
to resolve the financial consequences and increasing the profitability of business. A combined
formation of financial information and accounting decisions are practically utilised in real
business environment. the outcomes at the end of the accounting period justifies the effectivity of
decisions. The results are compared with the revenues and cost of previous years. If the cost of
remain lesser and revenue graph reflects increasing trends than it is clearly justified that the
management decision is worthy.
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