Description

Traditional managerial accounting systems are mainly designed to measure the efficiency of internal processes. Conventional management accountant’s principal performance report was variance analysis, which is a systematic approach to the comparison of the actual and budgeted costs and revenues during a production period for example. The classic illustration of traditional managerial accounting perhaps was Fredrick W. Taylor and his colleagues Frank and Lillian Gilbreath pioneered early 1900s performance measures. They focused on analyzing the core processes and aimed at developing optimal algorithms for activities by using time and motion studies by variance analysis approach to the comparison of the actual and budgeted costs of the raw materials and labor used during a production period