ANALYZING AND CRITICALLY DEBATING EMPIRICAL EVIDENCE.

Analyzing and Critically Debating Empirical Evidence

Introduction1

Analysis2

Budgetary Control2

Variance Analysis2

Usage of Standard Cost in Analysing Variance3

Budgeting Techniques and controls4

Bottom up Budgeting approach4

Top-down Budgeting approach5

Flexible Budget5

Capital Expenditure Budget6

Standard Costing is irrelevant for a 21st Century Britain6

Conclusion10

References11

Standard Costing

Introduction

The term accounting is a selective technique which is responsible for compiling the data. It simply deals with the matter of book keeping and there is no involvement of decision making at all. It makes the manager informed without any sort of prescription. Accounting deals with providing all the necessary information in the form of statements, all the information provided the requirement and is like a first step towards the maintenance of the company's profits and losses. Management accounting is the set of information which is provided to the external users. It is basically the information used by the managers for the sake of decision making. Management and financial accounting both deals with the allocation of resources which are available in scarcity (classes.bus.oregonstate.edu).

Financial accounting is a source of providing useful information which is for decisions like, how to allocate the available resources between the companies. On the other hand management accounting is a source of providing information for making decisions that how the resources are being allocated within any company. Management accounting is helpful in providing information for managerial control activities in the firms. They also help in deciding what products are for selling, where they must be selling, how the resource required sources for those products, and which managers to delegate with the resources the company is having (classes.bus.oregonstate.edu).

The real scope of management accounting revolves around three fundamental issues which are planning, performance evaluation and operational control. The planning involves deciding what the products are going to be made, where the products will be made and when are they going to be made. This will leads towards determination of materials, labor and various other resources which are required to b achieved for the completion of the desired output. The evaluation involves the evaluation of the profitability of each product or the product lines. It also determines the contribution of various managers and parts of organizations. Operational control means a better know how and the knowledge related to the WIP (work-in-process) is in the factory. Looking out that what is produced and what are still in the progress to be done nearby (classes.bus.oregonstate.edu).

Analysis

Budgetary Control

Budget is basically a planning mechanism. Through budgetary control the management control the budget in the organisations. The budgeting is done for the income, production, expenditures, revenues and capital. A separate committee is usually made for the sake of budgeting in any organisation. In this technique the results are compared with what was expected or budgeted before. In case of variance in the results from the budget figures, the management is responsible for taking the corrective measures and exercising the actions for putting a better controlling system (www.fao.org).

Variance Analysis

Throughout the year the management accounting prepare statements write after incurring each and every ...