Question

A restaurant at the Singing Towers of Darillium is openingThe manager wants to determine the price to charge for various lunch plates. Describe how the use of managerial accounting can help this manager make these decisions. Please use at least 100 words.

Answer 1

Managerial accounting is basically concerned with accounting of various costs incurred by an organisation.
It helps in determining various costs related to manufacturing of a product and keeps records of variable as well as fixed expenses related to such product.

Now, managerial accounting helps managers in their decision-making by giving them information about manufacturing and various costs associated with such manufacturing. Manager can decide/determine the sales price of a product which is best suitable to consumer as well as provide benefits to the business with the help of managerial accounting.

In case of a restaurant business also, manages can use managerial accounting in deciding the price to be charged for various lunch plates. There are various variable costs associated with restaurant business such as raw material costs, labour costs, etc so managers should also keep in mind such costs while determining the price to be charged for various lunch plates.

Managers should also consider the competitor's price and decide accordingly.
Geographical location of a restaurant is also a deciding factor in pricing policy.