Question

As the new marketing manager for Fast Fones Industries Pty Ltd , a company that manufactures mobile phones you need to learn about the accounting system for the business. Why is it important that marketing managers have some understanding of the accounting processes within a manufacturing business for which they work?

Answer 1

Answer :

Within all organizations, various people will need different information from the management accounting systems. Since managerial accounting does not need to follow GAAP and the information prepared is only for internal use, the same information can be manipulated in a variety of ways to help managers to save money, manage costs, price products and make a company more profitable.

Various strategies can be implemented by different companies as well. Not all companies are looking at making the cheapest product at the lowest cost! Some are looking at ways to make a premium product with a very targeted market. The strategies used by these companies will be different. However a company culture is developed and how strategies are planned, they all start at the top of a company. Leadership style trickles down through the organization and can be seen at all levels.

Need of Accounting Knowledge for Marketing Department Managers :

The managers in the marketing area, need to have an understanding of managerial accounting concepts. Some of the tasks they will use the information for include:

Planning

• How much should we budget for various types of advertising?
• How many salespeople do we need to hire and how should we compensate them?

Controlling

• If we cut the price on our product to increase sales, has that happened as expected?
• Is our inventory too high in various seasons of the year?

Making Decisions

• Should we increase or decrease prices?
• Should we bundle our products at a discount or sell them separately?
• Should we sell directly to customers or work through a distributor?