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Management accounting is accounting information provided to the manager to make a better decision within the organization and also helps them in building control. Types of management accounting are as follows:
1) Budget report: The tool used by the management to control the cost of the production is a budget. Budget provides with a roadmap and set the activity required to attain organization goals. The management can use budget report as a tool to compare the performance of the activity with the budget to study the variance and take corrective action.
2) Financial statements: The management can use financial statements for the purpose of making informed decision on the basis of accounting information. The manager will use the financial statement to perform financial analysis. The decision on the area where future investment can be made is based on this information.
3) Variance analyzes: Variance analyze is used to compute the variation between the actual outcome and targeted outcome. The management should examine the reason of variance and take appropriate measures to control it. The management should also consider this variance while preparing the future budget.
4) Job cost report; The management uses the job cost report to show the expenses and check the profitability of all project. With the help of job cost report, the manager can find the unit which is making a higher profit and the unit which is making loss.
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