Contemporary Issues of Management Accounting

3782 Words16 Pages
Assignment On “The Contemporary issues in Managerial Accounting” Managerial accounting is concerned with the provisions and use of accounting information to managers within organizations, to provide them with the basis to make informed business decisions that will allow them to be better equipped in their management and control functions. In contrast to financial accountancy information, management accounting information is: • primarily forward-looking, instead of historical; • model based with a degree of abstraction to support decision making generically, instead of case based; • designed and intended for use by managers within the organization, instead of being intended for use by shareholders, creditors, and public regulators; • usually confidential and used by management, instead of publicly reported; • Computed by reference to the needs of managers, often using management information systems, instead of by reference to general financial accounting standards. There are lots of contemporary issues are in Managerial Accounting. That is – 1. Activity based Costing: Activity-based costing (ABC) is a special costing model that identifies activities in an organization and assigns the cost of each activity with resources to all products and services according to the actual consumption by each. This model assigns more indirect costs (overhead) into direct costs compared to conventional costing models. With ABC, an organization can soundly estimate the cost elements of entire products and services. That may prepare decisions on • Either identify and eliminate those products and services that are unprofitable and lower the prices of those that are overpriced (product and service portfolio aim) • Or identify and eliminate production or service processes that are ineffective and allocate processing
Open Document