flow chart of manufacturing company
1.0 MANAGERIAL ACCOUNTING
Managerial accounting is concerned with providing information to manager for those are inside an organization and who direct and control its operations. Managerial accounting its differences between the financial accounting because it concerned with preparing financial reports and releasing information to the general public. Managerial accounting focuses on three business issues which are allocating the cost of goods or services, cash management or budgeting and financial forecasts. Managerial accounting uses cost allocation methods to allocate various business costs for each item produced by the company. Cash management and budgeting outlines all future expenditures to ensure business operation generate enough capital to pay for business expenses. Financial forecast provides business owners and managers with expected operational output or consumer sales under certain business conditions.
2.0 BENEFITS
Management accounting can help small business create a competitive advantage in the business environment. There are several benefits of management accounting which are:
2.1 REDUCE EXPENSES
Management accounting can help the companies to lower their operational expenses in short-run and long-run planning and control decisions that increase value for customer. For example, manager should rearrange the production layout that might reduce the manufacturing costs. It also can help the manager to keep on track of the relating cost involved in the production process such as direct material, direct labour and manufacturing overhead. From these activities manager should know each cost are involved in the production process and eliminated some activities that should not be in the process to reduce the costs. This information allows the owner to better understand how much money it costs to run the business. Business owners can also use management accounting to conduct an analysis on the quality of economic resources used to produce goods or
Managerial accounting is concerned with providing information to manager for those are inside an organization and who direct and control its operations. Managerial accounting its differences between the financial accounting because it concerned with preparing financial reports and releasing information to the general public. Managerial accounting focuses on three business issues which are allocating the cost of goods or services, cash management or budgeting and financial forecasts. Managerial accounting uses cost allocation methods to allocate various business costs for each item produced by the company. Cash management and budgeting outlines all future expenditures to ensure business operation generate enough capital to pay for business expenses. Financial forecast provides business owners and managers with expected operational output or consumer sales under certain business conditions.
2.0 BENEFITS
Management accounting can help small business create a competitive advantage in the business environment. There are several benefits of management accounting which are:
2.1 REDUCE EXPENSES
Management accounting can help the companies to lower their operational expenses in short-run and long-run planning and control decisions that increase value for customer. For example, manager should rearrange the production layout that might reduce the manufacturing costs. It also can help the manager to keep on track of the relating cost involved in the production process such as direct material, direct labour and manufacturing overhead. From these activities manager should know each cost are involved in the production process and eliminated some activities that should not be in the process to reduce the costs. This information allows the owner to better understand how much money it costs to run the business. Business owners can also use management accounting to conduct an analysis on the quality of economic resources used to produce goods or
References: Hutcherson, A. R. (n.d.). Business and Entreprenuership. Retrieved April Monday, 2014, from AZCENTRAL.COM: http://yourbusiness.azcentral.com/advantages-managerial-accounting-21281.html Kumar, V. (2011, March). Retrieved April Monday, 2014, from Accounting Education: http://www.svtuition.org/2011/03/advantages-of-management-accounting.html Steve. (2010, April). Business and Employmant. Retrieved April Monday, 2014, from Hubpages: http://steve042010.hubpages.com/hub/Benefits-of-Management-Accounting Vitez, O. (2009). Small Business. Retrieved April Monday, 2014, from Houston 's Chron.com: http://smallbusiness.chron.com/advantages-management-accounting-3983.html