Management Accounting is helpful in decision making-discuss the statement
Posted by Ripon Abu Hasnat on Tuesday, September 9, 2014 | 0 comments
Managerial accounting information
provides data-driven input to these decisions, which can improve decision
making over the long term. Small business managers can leverage this powerful
tool to help make their business more successful by understanding how
management accounting benefits common business decision contexts.
Relevant Cost Analysis
Managerial
accounting information is used by company management to determine what should
be sold and how to sell it. For example, a small business owner may be unsure
where he should focus his marketing efforts.
Activity-based Costing
Techniques
Once
the company has determined what products to sell, the business needs to
determine to whom they should sell the products. By using activity-based
costing techniques, small business management can determine the activities
required to produce and service a product line.
Make or Buy Analysis
A
primary use of managerial accounting information is to provide information used
in manufacturing. By completing a make or buy analysis, she can determine which
choice is more profitable.
Utilizing the Data
Managerial
accounting information provides a data-driven look at how to grow a small
business. Budgeting, financial statement projections and balanced scorecards
are just a few examples of how managerial accounting information is used to
provide information to help management guide the future of a company.
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