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Planning Tools In Management Accounting

   

Added on  2021-02-19

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MANAGEMENTACCOUNTING
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Table of contentINTRODUCTION..........................................................................................................................................4LO 3............................................................................................................................................................4Use of planning tools in management accounting............................................................................4LO 4 ...........................................................................................................................................................7Comparing ways in which companies could management accounting in dealing with their financial problems.............................................................................................................................7CONCLUSION..............................................................................................................................................8REFERENCES...............................................................................................................................................9
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INTRODUCTIONManagement accounting is the kind of accounting which is concerned with thereporting of costs related data for an objective of assisting the management of thecompany in their decision making process. In the present project report, differentkinds of planning tools will be analyzed and their application in the forecasting ofbudgets be evaluated. Further, it will also include a comparison regarding howcompanies can apply the management accounting techniques for dealing with theirfinancial problems. LO 3Use of planning tools in management accountingThere are various kinds of planning tools which assists the managers of theorganization in forecasting their operations,expenses for the future. Some of theplanning tools are as follows :Fixed budgets : These are the budgets which are does not get changed for any level of salesvolume. It remains static irrespective of the increase or decrease in the level ofproduction and sales. This is the reason why it is also called as static budget. This typeof budget is helpful only when the costs are majorly fixed so that expenditure does notchange as income or revenue variate (Schaltegger and Zvezdov, 2015). Advantages :It is easier to create, implement and follow as it does not require the regularupdates in the budget throughout the accounting period for which they arecreated. This budget is capable of providing the meaningful insights about the costs oforganization especially when a variance analysis is conducted. This allows themanagers of the company in assessing the areas where they might beunderestimating or overestimating the expenses which leads to better businessdecisions.Disadvantages :
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