How Managerial Accountants Support Strategic Decisions Case Study

1095 Words 5 Pages
Unit -1 Discussion Board 2

Douglas Hitchens

Colorado Technical University


Managerial Accounting Practices

Professor Bih Horng Chiang

October 4th, 2017

How do managerial accountants support strategic decisions?

When looking at how managerial accountants support strategic decisions, we must first look at as to how the managerial accountants role plays into the day to day business decisions of the company. Managerial accountants offer essential data to the organization by way of providing near-term decision assessments, applying ideal product combinations, deciding whether to produce -or-purchase, rent or purchase, assess value of a product, terminate a product. (Pant, 2016) Other roles with strategic decision making
…show more content…
Managers implement strategy through several means. By using Make or Buy Analysis management tools one can assess trends and fluctuations in a specific market. (Freedman, 2017)

Through the use of managerial accounting data, managers are given valuable and essential information used in their particular industry. For instance, a small organizational owner may contemplate as to whether or not to produce or buy a component needed to build the company's chief product. (Freedman, 2017) By completing a make or buy analysis, one can determine which choice is more profitable. While this technique is certainly useful, small business owners should only use these analyses as a factor in the decision. (Freedman, 2017) There could be other non-financial metrics that are important to consider that would not be part of the
…show more content…
(Freedman, 2017) Managerial accounting data is used by organizational upper management to govern what should be retailed and in what way to sell it. For instance, a minor business holder may be uncertain as to where he or she ought to pay attention to their marketing efforts. (Freedman, 2017) To assess this conclusion, an accounting manager might observe the expenses that are incurred in relation to promotion alternatives for each product in regards to mutual expenses. (Freedman, 2017) This method is recognized as relevant cost analysis and is a practice that is trained in basic managerial accounting courses. A similar method can be used to assess as to whether to increase product lines or suspend operations. (Freedman,

Related Documents