Q. Management
Accounting is helpful in decision making-discuss the statement.
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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