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Mangement Accounting

In: Business and Management

Submitted By Divyesh123
Words 1595
Pages 7
Managerial accounting is concerned with providing information to managers- that is, to those who are inside an organization and who direct and control its operations. Managerial accounting can be contrasted with financial accounting, which is concerned with providing information to stockholders, creditors and others who are outside an organization (Garrison and Noreen, 1999).

Managerial accounting information includes: * Information on the costs of an organization’s products and services.
For Example, managers can use product costs to guide the setting of selling prices. In addition, these product costs are used for inventory valuation and income determination (Horngren and Foster, pp. 2). * Budgets:
A budget is a quantitative expression of a plan. * Performance reports:
These reports often consist of comparisons of budgets with actual results. The deviations of actual results from budget are called variances (Horngren and Foster, pp. 3) * Other information which assist managers in their planning and control activities.
Examples are information on revenues of an organization’s products and services, sales back logs, unit quantities and demands on capacity resources (Kaplan and Atkinson, pp. 1).

Managerial Accounting Practices around the World

Traditional managerial accounting systems are mainly designed to measure the efficiency of internal processes. In the 1980’s, traditional managerial accounting practitioners were heavily criticized on the grounds that their practices had changed little over the preceding 60 years, despite radical changes in the business environment.

The last decade’s new managerial accounting practices such as activity-based-costing, the balanced scorecard and bottleneck accounting were developed.

Unlike traditional managerial accounting, activity-based-costing...

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