What are the different types of information(applications) provided by management accounting ?

What are the different types of information(applications) provided by management accounting ? Show the purpose of each. Cost of making a product/providing a service

Expert Solution

Management accounting in contrast to financial accounting prepares information for internal use , for making managerial decisions and strategic plans.

- Profit and Loss:

This statement although prepared for external users is used by management accountants to decide where they can cut costs or which stream needs to increase revenue.

- Balance Sheet:

The balance sheet is used by management accountants for planning and determining whether debt needs to be paid more quickly or whether more liquidity is required for business.

- Cost of making products:

Management accounting focuses on determining the cost of making a product. This helps in deciding which line of products should be aggresively promoted and whether certain products should be discontinued.

- Efficiency of productivity systems:

This involves understanding the amount of time taken to produce a product and the amount of output generated and where processes can be improved.

ekkarill92 answered 2 years ago

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