Management accounting Essay Example | Topics and Well Written Essays - 1000 words

Management accounting - Essay ExampleHowever, with the right tools culture and skills, a corporation is guaranteed to stay afloat in a world where businesses keep dropping protrude of the corporate world. How companies manage their finances and workforce dictates whether the company is bound to open its doors come the next financial year. One of the major concerns in management is the management of accounts which is usually handled a companys accountants in conjunction with the management of the company. Management accounting specifically deals with generating information pertaining to a given company and fundamentally relates on how to minimize cost while improving sales and boosting profits within the available companys resources. In short this is information that helps the management to make crucial decisions. Financial accounting on the other hand deals with generating information based on information relayed by external users and mainly deals with fake of cash inflow and ou tflow in the company. So why is management accounting so significant? Among the most important reasons why management accounting is important to company include 1) Planning-this basically deals with reservation decisions pertaining to the companys crossroads where and when to make them, who to sell them to, how much labor it will use and so on and so forth (Caplan, 5). 2) Operational Control-management helps the top officials in identifying and minimizing production error from the time a product is initiated for production to the time it is released to the market for sale. 3) Performance and Evaluation-this involves evaluating the efficiency and effectiveness of different products and different managers within the company. When transaction with management of accounts two concepts become clear Variable (Direct) costs and fixed production overhead costs