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Management Accounting: Breakeven Point Analysis

725 Words3 Pages

V.Postolache (2014), argues that Management Accounting take a leadership role in their teams and they provide valuable information that guides the organization towards achieving its strategic goal.
The monthly budget is discussed in the Management meeting and the following key ratios and statistics are analyzed and comparison made.
• Net Interest Margin
• Credit Loss Ratio
• Cost to income ratio
• Return on equity
• Return on assets
• Loans to deposits ratio
• Cost of Funding and other ratios not mentioned in this paper.
Cost associated with Management accounting which BancABC uses to gauge company performance that are relevant are Breakeven point, operational budgeting, activity based costing etc. (check management accounting analysis)
Appendix …show more content…

The breakeven point is where total costs(both fixed and variable) and total sales are equal, this shows that the company has not made a loss or profit.as Artill and Mclaney has stated, breakeven point analysis can provide useful insights concerning the relationship between cost, volume and profit.BancABC mainly uses this analysis when after opening a new branch to ascertain whether the branch is making profit or not looking at how much expenses has been incurred in opening the branch and the volume of customer transactions carried out at that particular branch including staff costs for the branch.(use more examples from the …show more content…

This however most of the time causes conflict as the support units feels their input is not recognized even though the business units cannot operate without the support

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