Question1:  

Discuss the importance of managerial accounting as “decision-making tool” in your organization.

Instructions: 1.Make sure to provide a clear paragraphs of minimum introduction and discussion part conclusion  of your explanation(above 350 words in total) with 2 peer reviewed references of last 3 years.

2. Read a selection of your colleagues’ postings. Respond to at least 3 of your classmates’ posts. (Each posting should be 150 words, It should include the stuff like supporting their discussion and  

Ask a probing question, substantiated with additional background information, evidence or research.

• Share an insight from having read your colleagues’ postings, synthesizing the information to provide new perspectives.

• Offer and support an alternative perspective using readings from the classroom or from your own research in the Campbellsville University Library.

• Validate an idea with your own experience and additional research.

• Make a suggestion based on additional evidence drawn from readings or after synthesizing multiple postings.

• Expand on your colleagues’ postings by providing additional insights or contrasting perspectives based on readings and evidence.)

Study Materials Link:

TextBook:

https://saylordotorg.github.io/text_managerial-accounting/index.html

Chapter1:   Introduction to Managerial Accounting:

https://saylordotorg.github.io/text_managerial-accounting/s05-what-is-managerial-accounting.html

Capter2:  Job Order Costing:

https://saylordotorg.github.io/text_managerial-accounting/s06-how-is-job-costing-used-to-tra.html

POST-1-

Studentname- Manisha Annam

Importance of Managerial Accounting

In the specialized vocabulary, management accounting can also be found under the name of analytical accounting, managerial accounting, or internal management accounting. Under this aspect we believe that a difference should be made between management accounting and managerial accounting, because the first one is a component of the second. Management accounting should be viewed as a system that includes specific elements of general accounting, managerial accounting, managerial control and internal audit – all of this are pursuing the enterprise objectives and systemic evaluation, improving risk management, control and process management.

In order to achieve the objectives of each entity, the accounting management is one of the main sources of information and data, presented in a performance report enabling decision making. The use of management accounting is very important for the management act because the external environment contributes to increase the interest in accounting information and data. These conclusions lead to information on resources, on human and material staff usage, market placing, the company place on the market compared to other companies on the competitive system. In order to establish market selling prices according to the request and to achieve expected margins, the company has to build and use a knowledge of the cost of their products of their services and their workers.

Management accounting helps in taking various important decisions. It supplies necessary information to the management which may base its decisions on it.

management accounting uses special techniques and concepts to make accounting data more useful. The techniques usually used include financial planning and analysis, standard costing, budgetary control, marginal costing, project appraisal, control accounting, etc.

Financial accounting is limited to the preparation of profit and loss account and finding out the ultimate result, i.e., profit or loss management accounting goes a step further. The ‘cause and effect’ relationship is discussed in management accounting.

References

CRISTIAN, D. (2014). The Importance of Managerial Accounting in Managerial Accounting System. Analele Universitatii Maritime Constanta, 15(21), 173–176.

Stout, D. E. (2014). A Business Communication Module for an MBA “Managerial Accounting” Course: A Teaching Note. Accounting Education, 23(2), 155–173.

Post-2 -Name-Sravanth Pilli

I believe that the topic is really interesting as it mentions an important field in accounting which is managerial accounting.The accounting based on managerial significance is the way toward planning the board reports and records that give precise and opportune budgetary and measurable data to chiefs to make present moment and long haul choices. It distinguishes, measures, breaks down, translates, and imparts data to empower an association to seek after its objectives. 

The  accounting based on managerial significance varies from money related bookkeeping (Martin, 2019). While budgetary bookkeeping gives data to individuals inside and, all the more imperatively, individuals outside the association, the executives bookkeeping is generally gone for helping administrators inside the association with basic leadership. 

The role is plays in companies or organizations – 

Helping Forecast or predict the Future: Anticipating helps basic leadership and responding to questions, for example, Should the organization put resources into greater hardware? Would it be a good idea for it to enhance into various markets? Would it be advisable for it to purchase another organization? The executives bookkeeping helps in addressing these basic inquiries and determining the future patterns in business. 

Aiding in Make-or-purchase Decisions: Is it less expensive to obtain materials or an item from an outsider or production them in-house? Cost and creation accessibility are the integral factors in this decision. Through administration bookkeeping, bits of knowledge will be created which will empower basic leadership at both operational and key dimensions (Martin, 2019). 

Anticipating Cash Flows: Anticipating money streams and the effect of income on the business is basic. What amount of cost will the organization cause later on? Where will its incomes originate from and will the incomes increment or lessening later on? The executives bookkeeping includes planning of spending plans and pattern outlines, and directors utilize this data to choose how to designate cash and assets to produce the anticipated income development. 

Understanding Performance Variances: Business execution errors are differences between what was anticipated and what is really accomplished. The board bookkeeping utilizes expository methods to enable the administration to expand on positive changes and deal with the negative ones. 

Breaking down the Rate of Return: Before setting out on a venture that requires overwhelming speculations, the organization would need to break down the normal rate of return (ROR). Whenever given at least two speculation openings, in what capacity should the organization pick the most gainful one? In how long would the organization earn back the original investment on a venture? What are the money streams prone to be? These are largely fundamental inquiries that can be replied through administration bookkeeping.

Reference- 

Damltlo James W. (2019). Importance of Managerial Accounting Skills, 12(2), pp.287-292.

Martin Reeves. (2019). An Agenda for the Future of Global Business.

POST-3-Prashant Koirala

Managerial accounting is that which is used internally by the managers, executives and all the other personnel who make important decisions in the company. It gives precise data to the administration for making present and future choices. Management accounting is different from the traditional financial accounting which data to the outside users whereas the managerial accounting gives data to the inside users in an organization. (Adrian, 2018)

Importance of Managerial Accounting in Decision Making:

The managers in a company often get stuck between deciding between different products,like when a manager in a manufacturing company has to decide the product which is best for them to remain profitable as the major part in any product’s profitability is its manufacturing cost, the correct decisions has to be made regarding that. Thus the accountants involved in the process perform cost analysis on the products which includes their fixed and variable costs and the decisions taken by the managers in that are the direct result which is received by the managerial accountants. (Johnson, n.d.).

Businesses which are big as well as small require management accounting for making countless decisions every day, so they rely on the information from the reports such as profit margin and labor utilization which is present in the managerial accounting data. Thus they can leverage these calculations and the data for making better decisions which will lead to high profits and competitive advantage in the market.

Some analysis and techniques which are used by the companies practicing managerial accounting are:

-Relevant Cost Analysis: In this analysis the information regarding what should be sold and the selling techniques of the product is determined by the company. For example: A company which has just started might be unsure whether to focus on their marketing, hence to analyze this the costs of the advertising alternatives is determined by the accountants while ignoring the common costs. This technique is very basic in managerial accounting and can also be utilized in determining whether to add product lines or to discontinue them.

-Activity-based Costing Techniques:

After deciding the products to be sold the customers whom the product is being sold is decided. For the purpose of that the company’s use this technique which gives them information about the things required for production and service of a product. The cost of the customers , their importance based on whose bringing more profits to the company is also embedded in this technique. (Freedman, 2019)

Some other techniques that are also helpful in the decision making process are- Make or Buy Analysis , Utilizing the data.