Management Accounting Case Study Example | Topics and Well Written Essays - 2750 words

Management Accounting - Case Study Example Management accounting is â€Å"the process of identification, measurement, accumulation, analysis, preparation, interpretation and communication of information used by management to plan, evaluate and control the activities of an organization†. As this definition suggests our management accounting department has a wide scope of responsibilities that involves the presentation of information to all levels of management within our company. This information is further used by management to assist in planning and decision-making activities. Our Management Accounting department is also heavily involved in budgeting process along with establishing procedures and culminating subsidiary budgets into an overall master budget. This report aims to acquaint you with how the Management Accounting department uses variance analysis within the management processes of the company. As variance analysis has become an integral tool in decision-making within the organization, it is important that a ll everyone grasps this important concept. In relation to this, this report will compare traditional variance analysis and operational and planning variance. A major source of data for our department is the costing records and accounts. Cost accounting is the essential aspect of every business organization. In the simplest sense, cost accounting can be defined as â€Å"process of tracking, recording and analyzing costs associated with the activity of an organization, where cost is defined as 'required time or resources' (Cost Accounting 2006).† In essence, cost accounting is a field in management accounting which is tasked to give numerical values or figures to each activity in a company's supply chain. The method which is