ACC512 Management Accounting for Cost and Control

Managerial accounting is an accounting concept that managers use to measure, analyze and report both the non-financial and financial information that usually assists managers to make different decisions to execute the organization goals. The aspect of managerial accounting often centers on internal reporting and is not limited by the General Accepted Accounting Principles (GAAP) (Boyns, & Edwards, 2013). Taking an example of Great Pyramid of Giza, modern cost management accounting provides ways to appropriately allocate cost to cost drivers and hence doing this aspect can accurately assist create budgets that can be used to compare the actual performance and subsequently correct inefficiencies.

In an effort to attempt to recreate Great Pyramid of Giza structure of Egypt, advanced cost management accounting can be utilized so as to determine the amount of funds that should be allocated to each part of the structure. The diverse structures in the Great Pyramid of Giza could be used as cost bases so as to enhance the modern cost management accountants to determine the amount of funds to be invested in restructuring (Giovannoni, Maraghini, & Riccaboni, 2011).

With Great Pyramid of Giza perspective, modern cost accounting management can allocate costs to specific cost driver such that the material costs can be allocated to materials and labor costs can be allocated to labor. Furthermore, the modern cost accounting management can create a prospective budget of the construction that can be periodically compared to actual performance so as to correct the inefficiencies in recreating the Great Pyramid of Giza structure.

How budgeting be viewed as a political process

Basically, the budget is considered to be an estimate of costs, revenues, and resources over a particular period reflecting future financial conditions and goals (Edwards, 2013). In this case, budgeting can be viewed as a political process through its functions. Budget can assist an administration or a government into shaping its expenditures. Budgets can also be used to cut costs in most organizations so as to enable the company improves its revenues. Modern cost management accounting personnel can basically impose new restrictions in the company expenditure. The aspect of the budget can also be seen as a political process through its effectiveness. It usually expresses the strategic plans of business units and a company events or activities in a measurable term (Parker, 2012).

Organizations cannot spend resources beyond its budget because it will result in the company making losses or over utilizing the available resources. Budgeting can also be viewed as a political process since government budgeting is considered to be more political than technical because the government budgeting encompasses making the budget in conformity with the relevant standards, regulations, and law (Giovannoni et al. 2011).

Cartoon/comic strip

This particular cartoon illustrates that diver individuals or organizations often have a huge budget for insufficient resources (Edwards, 2013).  Most of the organization or governments often contains large budget plans, but we rarely meet the budgeted funds because of the less available resources. Attaining budgets is usually a complex task for most of individuals and organization because of the pressure that it consists and thus most of them feel the pressure inserted by the unattainable budgets.

References

Boyns, T., & Edwards, J. R. (2013). A history of management accounting: The British experience (Vol. 12). Routledge.

Edwards, J. R. (2013). A History of Financial Accounting (RLE Accounting)(Vol. 29). Routledge.

Giovannoni, E., Maraghini, M. P., & Riccaboni, A. (2011). Transmitting knowledge across generations: The role of management accounting practices. Family Business Review, 24(2), 126-150.

Parker, L. D. (2012). Qualitative management accounting research: Assessing deliverables and relevance. Critical perspectives on accounting, 23(1), 54-70.