Report: Management Accounting for Travel and Tourism Business

This report provides an in-depth analysis of management accounting techniques within the travel and tourism industry. It begins with an introduction to the growing travel and tourism business and highlights the importance of cost management for firm profitability. The report then delves into various management accounting techniques, including budgeting, variance analysis, and break-even analysis, explaining how each can be utilized for effective decision-making. It emphasizes the significance of cost control, optimal resource allocation, and the determination of sales targets through the application of these accounting methods. The conclusion reiterates the crucial role of management accounting information in controlling costs and improving overall profitability within the travel and tourism sector, supported by cited references on tourism and accounting.

TASK 2

INTRODUCTION
• Travel and tourism business is growing a fast rate across the globe. In the current report,
varied issues in respect to travel and tourism business are discussed in detail. Cost is the
one of the factor that have huge impact on the firm profitability. Hence, in PPT varied
management accounting techniques that can be used to make decisions are analyzed in
proper manner and detail discussion are carried out on same.

2.1 Different type of management accounting information that can be used in the
business
• Cost is the one of the important factor that has due significance for the firms. In today era,
biggest challenge in front of firms is to maintain control on cost in the business. There are
different sort of expenses that are made in the business.
• It is the management accounting information that help any firm in controlling expenses in its
business and help in identifying areas where it need to work in order to improve its
performance. Different sort of management accounting information that can be used in the
business are given below.

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• Budget: In the budget cash inflow and outflow is made and on that basis net balance is computed.
Budget can be used in the business to make decisions. This is because in the budget cash inflow
and outflow is projected .
• Variance analysis: Variance analysis is also one of the most important tools that is used in
management accounting. Under this method deviation is identified between actual and standard
value and on the basis of difference deviation is identified which may be considered good or bad in
the business.

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• Break even analysis: Break even analysis is another approach under
which it is identified that how many number of units need to be sold in the
market to cover cost in the business. It can be said that there is very huge
importance of break even analysis approach for the firms.

2.2 Use of management accounting information as decision making tool
• Cost control: Cost control is one of the most important objectives of any business firms. Cost
control can be achieved in business by using varied management accounting methods.
Management accounting information related to expenses made in the business in comparison to
standard is the one of the most important management accounting information that need to be
taken into consideration for making decisions. By doing so good control is maintained on cost in
the business which lead to increase in profitability of the business. This reflect that there is due
importance of cost in the business.

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• Best use of resources in the business: budget is used as manager review
all sort of expenses that are made in the business and accordingly
resources are allocated in the business. This reflect that management
accounting information that is obtained through budget is one of the
important decision making tool.

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• Determining sales target: Sales target are also determined on the basis of
management accounting information. In this regard break even analysis method is
used in the business and under this minimum units that need to be sold in the
market are determined. By considering multiple factors overall sales target for the
firm is determined. Thus, it can be assumed that there is great use of management
accounting information in respect to determination of sales target in the business.

CONCLUSION
• On basis of above discussion it is concluded that there is huge importance
of management accounting information for the firms. This is because by
using same varied aspects of cost can be analyzed and controlled. All
these things lead to earning of good profit in the business.

REFERENCE
• Hall, C.M. and Page, S.J., 2014. The geography of tourism and recreation: Environment, place and space. Routledge.
• Hingtgen, N. and et.al., 2015. Cuba in transition: Tourism industry perceptions of entrepreneurial change. Tourism
Management. 50. pp.184-193.
• Horodnikova, J. and Derco, J., 2015. Dark tourism, thematic routes and possibilities for innovation in the Slovak
Republic. Turizam: znanstveno-stručni časopis. 63(2). pp.241-246.
• Morrison, C., Simpkins, C., Castley, J.G. and Buckley, R.C., 2012. Tourism and the conservation of critically
endangered frogs. PLoS One. 7(9). p.e43757.
• North, D., Baldock, R. and Ullah, F., 2013. Funding the growth of UK technology-based small firms since the
financial crash: are there breakages in the finance escalator?. Venture Capital. 15(3). pp.237-260.
• O’Brien, A., 2011. Tourism, the Irish State, and Developmental Failures. In The Politics of Tourism Development (pp.
75-96). Palgrave Macmillan UK.