Welcome to our ‘Management Accounting’ category, a dedicated space for diving deep into the intricate world of financial management within businesses. Whether you’re a seasoned accounting professional or someone looking to enhance your understanding of financial strategies, this category is crafted to be your go-to resource for valuable insights, tips, and the latest trends in management accounting.
Absorption costing allocates both fixed and variable costs to specific cost centres using predetermined absorption rates. This approach guarantees that the selling price of a product or service covers all incurred expenses.
A responsibility centre is a unit or function of a firm headed by a manager who is directly responsible for its performance. It generates information and allows them to be used directly in motivating and controlling the action of each manager in charge of the responsibility centre.
Cost Volume Profit analysis is a technique for studying the relationship between cost, volume and profit. The profits of an undertaking depend upon a large number of factors.
Divisional performance measurement involves both the subjective and objective assessments of the performance of sub-units within an organization such as departments or divisions.
Responsibility accounting is that type of management accounting that collects and reports both planned actual accounting information in terms of responsibility centres.
Variance analysis is a tool that compares the standard or expected amount with the actual amount to evaluate performance. The analysis includes an explanation of the difference between actual and expected figures.