CIMA BA2 Syllabus A. THE CONTEXT OF MANAGEMENT ACCOUNTING - The Need for Management Accounting - Notes ^{1 / 6}

5 Reasons

1. Costing

   - By knowing the cost of things, we are able to calculate profit and work out a selling price for our products

   - It also helps us value our inventory

2. Planning

   - Set our objectives

   - Creating budgets to meet these objectives

3. Control

   - Ensure we are following plans

   - Assessing any problems that come up, for example, if we are spending much more than our budgeted expenditure, we can take actions to control it!

4. Decision Making

   - Which products to make?

   - How should we finance the making of these products?

5. Performance Evaluation

   - Evaluation of employees and divisions - eg if the divisional manager meets her target then we give her a bonus