When it comes to managerial accounting, managers need to be well versed and have the knowledge as well as the analytical skills it requires to make critical decisions. The process of accounting is in charge with identifying, measuring and communicating economic information in order to allow its users to make the correct decisions and judgments (Ioana-Diana, 2013). There are many risks involved in the decision making process, especially when it comes to strategic planning. These types of decisions can either increase the organizational goals or be ineffective and severely impact the organization 's operations along with resources, resulting in high operational costs and monetary loss. The BSE Veterinary Services laboratory is an example of a corporation requiring managerial accounting to come up with a solution on efficiently testing cattle for infections.
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A collaborative approach would work best for determining how the BSE Veterinary Services laboratory should handle their companies additional testing of cattle. This will need to be discussed collaboratively as a group since all involved will have their own agenda to take into consideration. By using the budget and cost-effectiveness analyses, the company can see what the best step for them to take is. With all the data compiled into the two profit statements, one reflecting the 12,000 tests and the other reflecting 18,000 tests; it is possible to see if there will be any profit or a loss of profit from taking on the demand of additional testing. Negotiating is a vital tool to use when trying to secure a contract for materials. As the demand for testing goes up, the cost of the services provided to the clients can be increased. If everything works out as it should with the increase, in the long-run, there will be substantial profits
A collaborative approach would work best for determining how the BSE Veterinary Services laboratory should handle their companies additional testing of cattle. This will need to be discussed collaboratively as a group since all involved will have their own agenda to take into consideration. By using the budget and cost-effectiveness analyses, the company can see what the best step for them to take is. With all the data compiled into the two profit statements, one reflecting the 12,000 tests and the other reflecting 18,000 tests; it is possible to see if there will be any profit or a loss of profit from taking on the demand of additional testing. Negotiating is a vital tool to use when trying to secure a contract for materials. As the demand for testing goes up, the cost of the services provided to the clients can be increased. If everything works out as it should with the increase, in the long-run, there will be substantial profits