Management Accounting

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AVCE Business

Unit 10 Management Accounting (E1)

Introduction

Jones' Compact cars, is a small family run business in rural Southgate. The business was established 40 years ago by old Mr. Jones and during that time, a Jones Compact car has become a well-known manufacture of classic remote control cars, its start product being the flame red MG.

Old Mr. Jones has recently has taken his nephew, young Ken, into the business, in the hope that he will carry on the firm in the family tradition when he himself retires.

Young Ken is a business graduate of Durham University, is excited at the prospects of taking over Jones' Compact car, but realises that the firm is not functioning particularly efficiently and that there is much room for improvement.

One of the main objectives for Jones' Compact cars is of meeting a target of increasing profits by at least 10% per year over the next five years.

E1

What is Management Accounting?

Management accounting is those areas of accounting concerned with financial planning, principally through the interpretation and use of financial data for important management of the business. The role of accounting is