Answer to Question #295572 in Management for Sau

Question

Identify the techniques involved in modern management accounting and 

discuss the importance of these techniques with the practical application of it.

Answer 1

Some of the Techniques involved in modern management accounting are:

1. Marginal costing- this technique allows an organization to know the point at which production can be expanded or to determine the point at which economies of scale can be achieved.
2. Capital Budgeting- it allows organizations to analyze inflows and outflows of major projects and investments especially new projects to determine whether expected results are met and to look for alternatives to maximize production.
3. Inventory valuation- the managers use this technique to calculate the value of unsold inventory and also evaluate the value of goods sold and the profit generated.
4. Product costing- this technique helps managers to determine the costs incurred when creating a product, hence making it easy to set product prices.