MANAGERIAL ACCOUNTING COST CONCEPTS.pptx

Managerial Accounting

1. Managerial Accounting BBA 2023

2. Flashback…

3. Types of accounting

4. Users of accounting information

5. Management accounting definition “Management Accounting is concerned with accounting information, which is useful to the management”. — Robert N. Anthony “Any form of Accounting which enables a business to be conducted more efficiently can be regarded as Management Accounting” — The Institute of Chartered Accountants of England The Chartered Institute of Management Accounting (CIMA) - “Management Accounting is an integral part of management concerned with identifying, presenting and interpreting information for: formulating strategy planning and controlling activities decision taking optimizing the use of resources disclosure to shareholders and others, external to the entity disclosure to employees safeguarding assets”

6. Management accounting definition National Association of Accountants (USA) – Management accounting is “the process of identification, measurement, accumulation, analysis, preparation and communication of financial information used by management to plan, evaluate and control within the organization and to assure appropriate use and accountability for its resources”.

7. Characteristics/ Nature of Management accounting Useful in Decision Making Financial and cost accounting information Internal use Purely optional Concerned with future Flexibility in presentation of information

8. Scope of Management accounting Financial and cost accounting Budgeting and Forecasting Tax planning Cost control procedures Statistical tools Internal control and internal audit

9. Management accounting at Myntra Cost management – To analyse and control costs associated with its operations, including procurement, warehousing, distribution etc. Product pricing – To determine the optimal pricing strategy is vital for an e-commerce platform. Myntra would assess the costs associated with sourcing and delivering products, including marketing expenses. They have to set competitive prices while ensuring profitability. Inventory management – Managers analyse the inventory costs which enables them to optimize stock levels, reduce holding costs and minimize the risk of stockouts or over stock situations. Customer analysis – Managers have to understand the profitability of different customer segments. Management accounting helps them to analyse the costs associated with serving specific customer groups, and in developing customer retention strategies.

10. Management accounting at Myntra Performance management – Managers use different performance metrics to evaluate the success of various aspects of its business, such as order fulfilment time, customer satisfaction etc. Investment appraisal – Managers may have to evaluate the financial viability of potential investments, whether in technology upgrades, marketing campaigns, or expansion into new product categories. This involves analysing the expected returns and the associated risks. Strategic planning – Managers have to strategically plan considering factors such as market trends, competitor’s actions, and customer behaviour. They have to formulate long-term business strategies that align with the company’s goals.

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