Question

Describe the role of managerial accounting in your current or former place of business. If you have not been employed by a company that uses managerial accounting, choose a well-known company and describe how managers of that company might use managerial accounting information. Be specific. Do not choose a company that one of your classmates has already written about.

Answer 1

Role of managerial accounting in business

.A. Management accountants record, analyse and report cost related information which are used for planning, controlling , communicating the performance of various units of the business.

.B. Management Accountants also provide information and analysis which help in decision making.

.A For this purpose, management accountants prepare annual budgets and provide periodic reports to management regarding actual performance against budgets along with variances. This helps management in taking timely action. This also helps in performance evaluation of employees.

.B Management accountants also provide support to management in decision making in following areas:

• Product profitability and management of product portfolio(Products that need to be discontinued and products need to be expanded)
• Capital budgeting, project evaluation and selection of projects..
• Make or buy decision
• Process strategy and process selection
• Cost, Profit, Volume analysis