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Management and Cost Accounting: Planning, Control and Budgeting - Essay Example
Management accounting is an important source of information for the people involved inside an organisation. Moreover, management accounting also assists in better evaluation of operations of business activities as well as in formulating enhanced decisions with the objective of improving the performance of an organisation. …
Furthermore, management accounting also aids an organisation to devise strategies as well as plans for improving competencies and efficiencies of an organisation. Management accounting is also known as internal accounting which is useful in improving internal business operations as well as effectiveness of an organisation. Management accounting is mainly utilised by managers of an organisation for enhanced decision making as well as in initiating strategies for successful performance of an organisation. Cost accounting is a process of determining production cost as well as cost involved in conducting business activities of an organisation. Moreover, cost accounting also offers valuable information as well as facilitates in making decisions for effective control along with reduction of cost (The Institute of Cost Accountants of India, 2012).
The paper will emphasize on the terms planning, control and budgeting as well as on the relationship between these terms. Moreover, the processes involved with the preparation of master budget of an organisation will be discussed. Furthermore, the paper will emphasize on the behavioural issues which arise due to the process of budgeting. The usage of budgetary information will also be discussed in the paper.