Showing posts with label Management Accounting. Show all posts
Showing posts with label Management Accounting. Show all posts

What is Value Chain Analysis?

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The value chain for any firm in any business is the linked set of value-creating activities all the way from basic raw material sources for component suppliers through to the ultimate end-use product delivered into the final customers’ hands.

The value-chain focus of management today is largely internal to the firm (its purchases, its processes, its functions, its products, its customers).  This perspective is too narrow if considered in a strategic context.

Strategic/competitive advantage is gained through managing the entire value chain from raw material supplier to the end user.
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Definition of Management Accounting

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Management needs detailed information on different aspects to arrive at meaningful decisions. Financial accounting provides some information but these are not adequate. Management accounting removes these limitations of financial accounting. 
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Functions of Management Accounting

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Functions of Management Accounting include followings:
  • Provides data
  • Modifies Data
  • Analysis and interpretation of data
  • Use of Qualitative Information also
  • To help in Planning
  • To help in Organising
  • To help in Motivation
  • To help in Co-ordination
  • Communication
  • To help in Control
  • To help in Decision Making

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Objectives of Management Accounting

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  • Providing managers with information for decision making and planning.
  • Assisting managers in directing and controlling operational activities.
  • Assisting managers in motivating employees toward the organization’s goals.
  • Measuring the performance of subunits, managers, and other employees within the organization.
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