Question

Managerial accounting information is not just for accountants. All areas within an organization can use the information to support decision making. Choose a position in an organization that is appealing to you and identify several decisions that you might be asked to make in that position. What kind of managerial accounting information would you need to make those decisions?

Answer 1

"Managerial Accounting Information is not just for accountants. All areas within an organization can use the information to support decision making. "

Managerial Accounting is the process of identifying, measuring, analyzing, interpreting & communicating information to managers for the pursuit of an organisational goals. It is also known as cost accounting. A management accountant applies his or her professional knowledge and skills in the preparation & presentation of financial and other decision oriented information.

The position in an organisation appealing is Assembly Line Supervisor which might be interesting in finding out how efficient his/her line is in comparison to his fellow supervisors or compared to the productivity in the previous time period. An accounting report showing inventory waste, labour hourly rate & other statistics might help the supervisor to correct inefficiencies. Further it evaluate the assembly line data & estimate trend and the long term effects of those trend to measure the profitability of the organisation.

The kind of managerial accounting information need to make those decisions are:

1) Planning & Controlling - In Managerial Accounting, the process of setting goals, determining resource requirements and devising a means to achieve goals is known as "planning". Monitoring the financial results and measuring the outcome of planning process within the enterprise is known as " controlling". The plans of management are formally communicated as budgets.

2) Cost Information - Information gathered by the cost accounting methods within the organization make up most of the detailed data used to create management accounting reports.

So, it can be said that managerial accounting fulfills both the crieteria: Accounting & Management.