Management Accounting Essay Example | Topics and Well Written Essays - 1500 words - 3

Management Accounting - Essay ExampleThis report covers considerations for solicitude accounting system alike(p) the suitable be technique, pricing system and budget preparation. It also points out certain behavioural, organisational and management factors that take away to be considered for design, implementation and functioning of a management accounting system for the company.Process costing is integrity of the best management accounting technique for Watson Circuits plc because this company manufactures products in a multi-stage process. Process costing is ideal for manufacturing concerns where there is a continuous production characterised by transfer of material from one process to another. This costing system is beneficial for Watson Circuits plc also because the company produces in batches and the cost structure of the production remains the homogeneous for years.Under process costing, cost is not assigned to individual units of production, rather it is calculated on the modal(a) basis i.e. all production cost are spread over the units produced. This costing technique requires disposal of process control accounts for each process allocation of direct and indirect costs to each process. at one time a process of production ends, its costs are transferred to the next process and so forth. The calculation of cost, on a lower floor this method, is thus cumulative i.e. the costs of previous process are added to the cost of current process. The cost aggregation process continues until the production ends. Watson Circuits plc needs such a costing technique because it will provide management accounting information in terms of different processes through which the production runs. This is the best suitable method calculating costs on the basis of processes and batches. Managements need for unit production costs can be met as this costing technique provides for calculation of unit costs as sanitary as costs that are incurred in each process. It is ve ry important for the