Managment Accounting

INTRODUCTION
During the past twenty years budgeting has gained a high indite in professional and academic journals and textbooks in prudence business relationship as a technique which improves the accuracy of product/ proceeds  and also assists managers in understanding how resources ar used crossways a firms value-chain to deliver st esteemgic outcomes. It is piquant to firms in competitive environment that demand continuous live reduction, particularly where existing cost systems fail to provide such decision support. However, while many organizations are aware that engine room and the global economic environment have made traditional cost accounting systems less relevant, they need to perceive pay benefits before implementing ABC, given that restructuring the necessary systems can be noteworthy and costly.
THE MANAGEMENT OVERVIEW:
As the firm was taking into consideration the stuffy system, it was incurring various difficulties and was not able to adapt the habitual profits. Hence they are lacking behind in management and personal finance planning. Lets have a look on concept of conventional accounting system.



Its features are as follows:
Direct material and direct labour cost are traced to products
Manufacturing smash-up be are allocated to products using a predetermined overhead rate, sometimes plant wide
Manufacturing overhead rate is calculated using some measure of production volume
Non-manufacturing costs are not assigned to products
The firm was suffering through losses because there was a failure to adapt to ever-changing environment;
Increasing levels of non-volume-driven manufacturing overhead costs
Increasing proportions of non-manufacturing costs
. BUDGETING  helps managers manage overhead and understand profitability of products and customers and therefore is a powerful hawkshaw for decision making.
Advantages of budgeting
More accurate costing of products/services, customers, SKUs, distribution channels
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