Functions Of Management Accounting

Introduction:

For planning, controlling and decision making a manager needs realistic-logical-related financial information of the organization. Management accounting is a process of after recording financial data making financial statement and financial analysis to support managers in getting realistic-logical-related information, so that they can take proper decision. This is also known as Managerial accounting. In each and every division of an organization, shapes of work are designed based on their efficiency. Management accounting helps to making decision of input to get proper efficiency. Management accounting is different from other accounting system like financial accounting& cost accounting. Management accounting doesn’t focus on

Management accounting is basically different from other types of accounting because of its activity (Granlund, 2001). The main task of managerial or management accounting is creating a formatted and accounted financial data analysis as a presentation for external and internal audience. The main target is external audience like government, banks, and share-holders.

Without proper information a manager cannot make a proper future plan for organization even manager don’t know what the current financial condition is. Management accounting helps managers to perform in basic three management activities. Those three activities of management are Planning, controlling and decision making. In our organization Planning is fixing our own target as a carpenter organization. Controlling is our daily basis order acceptance, prepare those wood products and supply them to customer or consumer properly (Granlund, 2001). Decision making is related with making our organization more efficient and cost effective. For those a manager knowing present financial condition is

It basically helps to supply a scenario of different types of costs and to making decision. LIFO and FIFO are 2 different types of cost calculating methods. The most related and best cost –accounting system is taken by Management accounting team. We use the best and preferable for our business based on time and audience of external.

Managerial costing system is basically used in all types of business. It differ all cost in variable and fixed this two types of cost. Variable cost is related with number of units. Each unit has its own variable cost (Cugueró-Escofet and Rosanas, 2013). Fixed cost is not directly related on unit. It’s based is utility, rent or other charges which are related to fixed asset. In this managerial costing system cost are also differentiated in direct cost and indirect cost in these two groups.

Absorption costing is used without any terms of classification of costs. All costs are treated ad costs and they are written under same heading. Fixed, variable, direct and indirect costs are seen as same in this