14.5. Management Accounting: Tools and Techniques

Try these first

1. 1.

   What is budgeting?

   Hint

   Think about the financial plan for a future period.

2. 2.

   Name an example of a key performance indicator (KPI).

   Hint

   KPIs measure how well an organization achieves its objectives.

3. 3.

   What is the primary focus of management accounting?

   • Reporting to external stakeholders
   • Future-oriented decision making
   • Compliance with laws

   Hint

   Think about who uses the information and for what purpose.

4. 4.

   True or False: Management accounting is required by law for all businesses.

   • True
   • False

   Hint

   Consider the flexibility involved in management reporting.

5. 5.

   A company projects that their sales will be $200,000 and the variable costs are projected at 60$50,000?

   Hint

   Consider how fixed and variable costs influence the break-even calculation.

6. 6.

   A firm has actual sales of $300,000 compared to a budgeted amount of$280,000. If the variable costs are 50% of sales, calculate the variance in profit based on expected values.

   Hint

   Calculate based on budgeted versus actual performance to find variances.