P2. Explain different methods used for management accounting reporting. What is management accounting reporting? Management accounting reports are internal reports, which help business owners and managers analyse the performance and profitability of the business. Management accounting reports have a profound impact on the business, although like financial reporting it doesn't focus on the overall evaluation of the business, instead, it focuses on segments of the business. By segmenting manager or owner of the business can get into the details and analyse the performance of particular area of the business and make the business decisions. Management accounting reports may prepared quarterly, monthly, weekly or daily. Different methods of management accounting reporting: There are different types of method for management accounting reporting. These have been explained below: Managerial accounting reports: managerial accounting reports are most important for the small business as it provides quick information for the internal decision making. Managerial accounting reports information depends on the needs of the company. Information found in these reports are product received, estimate budgets and operation performance reports etc. For example ABC company Budget Reports: budgets preparation is one of the key elements of …show more content…
Whether it is an incorporated organization or has several departments, a budget report helps the owners analyse the performance and control costs across the organization or a particular area. Budgets are established by evaluating expenses from prior years, and then estimate budgets for the upcoming year and adjusting or cut costs where it is needed. For example ABC Company buying computers for their business their budget was £25,000 but actual price was £28,000. Then manager and cost analysis, analyse the variance of budget and actual price were unfavourable .That helps the management decision making how to solve the