MANAGEMENT ACCOUNTING

Management accounting techniques is renowned to be very useful accounting

resources that extensively help organizations incorporate cost accounting data,
financial and non-financial information. Knowing this information is essential for
managers to do their jobs, in the present day today, organizations need development
and continual improvement in their performance for maintaining their activity and
survival in the dynamic competitive environments. The abilities and capacities of an
organization through efficient and effective use of the organization’s resources are
introduced as the important tools for improvement of organizational performance
that benefiting from it requires aware management. Therefore, collecting and
providing relevant information to the performance is indispensable for organizations
that the need can be satisfied with employing management accounting techniques.
Moreover, with the increase of competitors around, most of the producers have
thought it wise to manufacture or package a quality product and also enhance their
profit level, prevent wastage and utilize available resources, management decision
needs to be made both mostly in the financial aspect. For efficient management of
the economic entities having as its object of activity the production of goods,
information is needed to calculate product costs. Cost accounting techniques are
being applied to collect information on production, to allocate specific spending lots
of product and unit cost calculation. Also, as the deployment of production and
generation of costs, strict quality control procedures are being applied to compare
actual costs with planned costs. Through these methods it can be determined the
efficiency of exploitation activity and management. Finally, managers need special
financial reports and analysis to substantiate their decisions. Therefore, at the base
of management decisions must stand the analysis of alternative lines of action.
Management accounting techniques has been equipping organizational managers
with important information to take decision and deals with both constant timely and
frequently changing business dealings i.e. order received, order backlog, capacity
utilization, and sales. Other analytical reports are prepared for decline in profitability,
market share shrinkage, customer loyalty disruption towards the organization.
Management accounting techniques usually plays as an influencing role for planning,
organizing, leading and controlling through managers of the organization. Planning
activity is done mostly through budgeting, standard costing, target costing, cost-
volume-profit analysis and directing or organizing through process reengineering,
just in time (JIT), activity-based costing (ABC), flow direction, value proposition.
For EX- tata steel long products
In management decision making can simply defined as the basic assumption or
choosing the best alternatives such decision making includes various steps that
should be keep in mind-
  Identify various alternatives for the decision taken
 Obtain necessary data and evaluate necessary information
 Awareness of upcoming consequences from the decision taken
 Select the best policy that suits
 Implementation of policy
 Evaluate the outcomes and results of the decision taken
From the above steps of decision making a businessman always makes decision
intensively with proper way. Segmenting and positioning the decision according to
the time and situation the decision should be dynamic and sticky to the organization
thus we can say-
 Strategic and Tactical-Tactical decisions are quantitative executable
decisions which result directly from the strategic decisions. The
distinction between strategic and tactical is important in management
accounting because the techniques of management accounting pertain
primarily to tactical decisions. Management accounting does not
typically provide techniques for assisting in making strategic decisions
Once a strategic decision has been made, then a specific management
tool can be used to aid in making the tactical decision. For example, if
the strategic decision has been made to avoid stock outs, then a safety
stock model may be used to determine the desired level of inventory
 Short run and long run-The decision-making process is complicated
somewhat by the fact that the horizon for making decisions may be for
the short-run or long-run. The choice between the short-run or the
long-run is particularly critical concerning the setting of profitability
objectives. A fact of the real business world is that not all companies
pursue the same measures of success.

MANAGEMENT TOOLS ARE-

 Capital budgeting model
 PV ratio
 Cash budget
 Segmental analysis
 Income statement
 Balance sheet
SHASHI BHUSHAN
0191BBA230