managerial accounting :: essays research papers

Management news report is touch with the provision and use of accounting randomness to managers within organizations, to facilitate the managers in their decision making and management control functions. Unlike financial accounting information (which, for the to the highest degree part, is made publicly available), management accounting information is used within an organization and is usually confidential. (Jiambalvo)The distinction between traditional and innovative management accounting practices can be illustrated by character reference to equal control proficiencys. Traditionally, management accountants principal cost control technique was variance analysis, which is a systematic approach to the comparison of the actual and budgeted cost of the raw materials and labor used during a crossroadion period. While many form of variance analysis is still used by most manufacturing firms, it nowadays tends to be used in conjunction with innovative techniques much(prenominal) a s lifecycle costing and activity-based costing, which are visualizeed with specific aspects of the modern blood line environment in mind. Lifecycle costing recognizes that managers ability to influence the cost of manufacturing a product is at its greatest when the product is still at the design stage of its product lifecycle (i.e., before the design has been finalised and production commenced), since small changes to the product design may lead to significant savings in the cost of manufacturing the product. Activity-based costing recognizes that, in modern factories, most manufacturing costs are set(p) by the amount of activities (e.g., the number of production runs per month, and the amount of production equipment drained time) and that the key to effective cost control is therefore optimizing the efficiency of these activities. both lifecycle costing and activity-based costing recognize that, in the typical modern factory, the avoidance of disruptive events (such as machine breakdowns and quality control failures) is of far greater importance than (for example) reducing the costs of raw materials.