Management Accounting Essay Example | Topics and Well Written Essays - 1500 words - 10

Management Accounting - Essay Example The two sections are not independent of each other and they are intertwined so as to work properly in achieving the specific goals they have been designed to. In the fast changing world and the high cost of business managers have to set up budgets for what to invest and understand the priorities to focus on. A budget is the plan set by the organization for the forthcoming period and it is designed at different level of the organization. The top management focuses on the master budget which is more detailed and requires integration and coordination of every part of the organization. The primary role of budgeting is systematic planning (Taylor III, 2013). The challenge of setting up a good master budget focuses more on the people hired to do and how they ensure they also are concerned with the macro while also being detailed to the micro management priorities of the business. Contrary to organization budgeting is not forecasting but is more of a leadership role of accompany than a financial one (Mettanen, 2005). Transaction cost economics this is the most complicating accounting calculation top managers’ face. It needs a lot of time and is more complex and it is widely used to decentralize multinational organization it involves understanding the tax related issue within the geographical area as well as ensuring that the cost incurred for raw materials is up to the required and that reducing operating cost (Laitinen, 2002The objective of this transfer cost is more of ensuring proper resource of allocation as well as minimizing cost and also having a competitive advantage over the rest of its competitors. Preparing of benchmarking involves a lot of consideration and managers in this have to understand the qualities required for the benchmarking and how to rate and rank the staff. The challenge when embracing this can lead to employees who think they are sacked. This requires