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

Job Order Costing, Salialailai Ltd manufactures water tanks for different s...

Salialailai Ltd manufactures water tanks for different sizes for use by industrial customers. The company uses a job costing system, in which manufacturing overhead is applied on t

Adjusting entries, what do you debit and what do you credit in adjusting en...

what do you debit and what do you credit in adjusting entry for prepaid rent?

Explain sales budget, Explain Sales budget A sales budget is an estimat...

Explain Sales budget A sales budget is an estimate of expected sale during a budget period. A sales budget is known as a nerve center or backbone of the enterprise. The degree

Chapter 2 problem 2-23 T-Accounts;applying overhead, solution to problem 2-...

solution to problem 2-23,T-Accounts;applied overhead of Kleinman Company is a manufacturing firm and employess a job-order costing system.

Continuous probability distribution, CONTINUOUS PROBABILITY DISTRIBUTION (U...

CONTINUOUS PROBABILITY DISTRIBUTION (USE OF NORMAL DISTRIBUTION) In reality the C-V-P variables might take any values in a continuous range. It could therefore be more appropriat

Funds generated from operations, Funds produced from operations, throughout...

Funds produced from operations, throughout an accounting period, raise working capital by an equivalent amount. The two major components of funds generated from operations are depr

Engineering method-cost estimation method, Engineering method These met...

Engineering method These methods are based on the use of engineering analysis of technological relationship between inputs and outputs e.g. method studies and time and motion s

Cost comprise impact, Cost comprise impact Some of the policy choices w...

Cost comprise impact Some of the policy choices which tend to have the maximum impact on cost comprise: Product performance, configuration, and characteristics Mix and

Cost behaviour, How costs behave as the level of activity/volume changes.  ...

How costs behave as the level of activity/volume changes.  Why an understanding of cost behaviour is important ? Types Variable e.g. petrol, direct materials Fixed e.g.

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