What is management accounting?
Management accounting is the process of analyzing business costs and operations to prepare internal financial reports, records, etc to make decisions in achieving the business targets. It is also called as managerial accounting or cost accounting.
Basically, management accounting is prepared for internal company use. And it is generally prepared by a manufacturing organization.
Functions of management accounting in the tourism sector are as follows:
- To product price fixation
- To determine the sales price
- To determine the profit margin
- Cost analysis facilitates business decisions like to make or buy the product
- It establishes a standard for all elements for determining the cost
- It helps to control costs
- It helps to judge profitable and non-profitable operations
- Optimum utilization of resources
- Management accounting locates wastage and leakage in the production of tourism products
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