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ACCA Applied Knowledge · Management Accounting · Presenting information

A management accountant is preparing a monthly performance report for the production director. Which of the following is the best way to make the report more useful to the director?

The best improvement is to focus on key variances and exceptions needing action, supported by brief commentary. Useful management information is relevant, understandable and concise. Including every cost code, excessive precision or jargon buries the important points and makes the report harder for the director to use.

  1. AInclude every available cost code so that nothing is omitted
  2. BFocus on the key variances and exceptions that need action, with brief commentaryCorrect
  3. CPresent all figures to the nearest cent for accuracy
  4. DUse technical accounting terms to show professionalism

Explanation

Effective management information is relevant, clear and concise, and should help the user decide what action to take. Highlighting key variances and exceptions with short commentary does this. Including every cost code or excessive precision adds detail that obscures the message, and technical jargon reduces understanding.

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