Comparing between real and planned outcomes , Managerial Accounting

Assignment Help:

Comparing real and planned outcomes and responding to Divergences from Plan

The final phases in the process outlined in figure shown below of comparing real and planned outcomes and responding to divergences from plan symbolize the firm's control procedure. The managerial function of control includes the measurement, reporting and consequent correction of performance in an attempt to make sure that the firm's objectives and plans are attained. In another words, the objective of the control process is to make sure that the work is completed so as to fulfill the original intentions.

 

629_decision making.jpg


To monitor performance, the accountant generates performance reports and represents them to the suitable managers who are responsible for implementing different decisions.  Performance reports including a comparison of actual outcomes (real costs and revenues) and planned outcomes (budgeted costs and revenues) must be issued at regular intervals. Performance reports give feedback information by comparing planned and real outcomes.  These reports must highlight those activities which do not conform to plans, therefore that managers can devote their scarce time to focusing on such items. This procedure represents the application of management by exception. Effective control needs that corrective action is taken and hence actual outcomes conform to planned outcomes.

 


Related Discussions:- Comparing between real and planned outcomes

Strategy, Strategy A business characteristically invests considerable t...

Strategy A business characteristically invests considerable time and money in developing or creating its strategy. Employees, harried with day-to-day tasks, sometimes fail to s

Mgt, #question1-50..

#question1-50..

Eoq mathematical model, EOQ mathematical model As costs of ordering and...

EOQ mathematical model As costs of ordering and holding stock are equal at the EOQ point, we can build a simple mathematical model to solve the problem, as follows: (Q/ 2) X

Management accounting, Management Accounting An accounting discipline c...

Management Accounting An accounting discipline concerned with the use of financial information. It used to relevant information by managers and other decision makers inside a s

State programmed budget, Explain about Programmed budget It having expe...

Explain about Programmed budget It having expects revenues and cost of various products or projects that are termed as the main programmers of the firm. Such a budget can be pr

International transfer pricing-compliance and documentation, International ...

International transfer pricing Transfer pricing is a perennial issue, within the international tax community (Richard Casna, Accounting and Business, in the year February 1988)

Objectives of working capital decisions, After going through this section, ...

After going through this section, you must be capable to: Know the concept and characteristics of working capital; Identify with the difference among net working capital

Alternative performance measures, Alternative performance measures Ther...

Alternative performance measures There are various measures that can be used to measure performance of a decentralized company. The major ones are: •    Return on Investmen

Profi t Planning, Master budgeting Jaya Sdn. Bhd. is a wholesaler. The mana...

Master budgeting Jaya Sdn. Bhd. is a wholesaler. The management of Jaya Sdn. Bhd. has been extremely worried about the company''s cash position over the last few years. In July 201

Cost, What are the limation of semi variable cost and how to overcome it?

What are the limation of semi variable cost and how to overcome it?

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd