Managerial Accounting Objectives
Prof. K. Leeds
The main objective of managerial accounting is the answer to the question, what is the state enterprise as the need to allocate the available resources to increase efficiency. Accordingly, management accounting requires the performance evaluation for various parameters over time and due to any event. For example, we estimate the change in sales:
1. Option. We need to understand whether there is seasonality in sales? To answer this question we need to collect information on the volume of sales for each month during the year. We'll see how the sales from month to month differ;
2. Option. We want to conduct an advertising campaign, and we need to understand how it will be effective? To …show more content…
Since the creation of a separate system of management accounting is more expensive than the development of the system on the basis of accounting, accountants often find managerial accounting subsystem that may be true at the early stage of its development. Further development of the necessary accounting information management in enterprises leads to the development of a bulk system of collecting information than is possible within the framework of accounting.
Some examples of methods of management accounting in comparison with the accounting:
• in the framework of accounting is not necessary to take into account the volume of sales of competitors, the company's management at the decision to increase the share of own sales accounting of this information becomes necessary (marketing component of managerial accounting);
• In the framework of accounting is not necessary to consider the location of inventory in warehouses in cells, in the optimization of the logistics - have (increase speed …show more content…
Management accounting is focused on the needs of the internal users (managers at various levels), not external (shareholders and creditors, government agencies), the information collected and provided by it is not open, and belongs to a trade secret.
Indicators of management accounting, unlike the book, can be both monetary and in-kind. Moreover, they can be qualitative and probabilistic and describe not only the flows and stocks, but also the events and states of the external world, that is, management accounting can operate opportunity cost and market saturation products in this category.
The company voluntarily chooses such methods of management accounting, which it is convenient: in this area there are no rigid legal requirements as to the tax (accounting) and financial accounting (many countries have standardized forms of financial