What is Management Accounting?

Management Accounting is a technique of accounting which is used by managers to make decisions and maintain control over limited resources. Management accounting makes a study on the cost behavior that is how they change due to activities performed in an organization. It determines the cost of a product. It helps in planning a budget for the functions carried out in a business enterprise. Management accountants do extensive planning on how to sell the products and at what price.

Managerial information is required for making decisions like whether to start a project or not, benefits of opportunities, etc. It compares the actual performance with the budgeted figures to assess the performance of the business. It helps in reducing operational expenses and improving cash flows. It helps to increase and improve financial returns. Management accounting is carried out on the basis of decisions of the management and alterations.

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