According to the Chattered Institute of Management Accountant (CIMA), the management accountants are the persons who are concerned with the analysis, identification, preparation, measurement, accumulation, interpretation and communication of the business and management related information. Such effective business communication with the higher managerial level by the management accountants help in the sustainable use of the available resources. The sustainable use in turn helps the company to grab more profit via optimized revision of the expenditure chart. Garrison, Noreen and Brewer (2006) best described the term management accountant. According to them, they are the people who is concerned with providing information to the managers or the higher managing authority.
The management accountants are also involved in the preparation of the financial reports for several non-management groups like the shareholders, regulatory agencies, creditors and tax authorities.
Figure: Management Accountant in an Organization
(Source: Bamber et al. 2008)
Following the industrial revolution, there occurred an increased in the amount of the mechanized production along with size and the complexicity of the process. According to the accounting historians, separation of the ownership in the private limited companies, led to the increase in the number of the companies followed by popularity of the concept of cost accounting or management accountant. Management accountant plays an important part of the organizational economic information system with a principal role in decision-making (Ward 2012). The three areas in which the accounting decision making of management accountant is being practiced are:
For proper implementation of all three above mentioned management plans, the management accountant involve in setting specific goals while directing and controlling them as per the requirement of the company. By directing and controlling, it means that tactical manipulation of the plans and thus manipulating the decision or facilitating in the decision making (Langfield-Smith, Thorne and Hilton 2008).
Figure: Steps in decision making
Figure 2: Strategic Management Model in Management Accountant
(Source: Isaac Mwita 2000)
Figure 3: Performance Management Plan in Management Accountant
Unit cost, which is popularly known as single costing, is the total expenditure that has been incurred by the company to manufacture, store and to sell the product. The unit cost encompasses all the fixed cost, variable cost and the overhead cost along with other direct material/labor cost. In case of White’s Chemicals, the unit costs are dependent of the variables of machine costs, setup costs, receiving cost, material handling and engineering cost (Bebbington and Thomson 2013). In case of Mosby Design and Manufacturing, the fixed overhead expense of $160,000. $88,000 out of $160,000 will not be required if the line is drops below the estimated one. However, $72,000 will still be there as they are common fixed overheads. Thus importance of overhead in Unit costing is huge.
(In case of Mosby Design and Manufacturing, the cost per unit is 16 dollars approx it has a direct affect on the total cost)
In the absence of the information related to accurate cost, the entire business will be dark. The accurate costing can be regarded as the second most important entity after unit costing that plays a huge role in decision making of the management accountant. The importance of the accurate cost lies in the fact that,
The importance lies in the fact that it will allow the manager accounting personnel to ascertain the actual sell price of the product in the market so that the company can extrat more profit, much above the gross margin ((Langfield-Smith, Thorne and Hilton 2008; Lambert and Sponem 2012).
Thus from the above discussion, it clear that their lies a significant importance on of the decision making process of the management accountant. Management accounting helps in effective planning and procurement of the strategies, which in turn helps the higher management to increase their overall financial profit. The help of the management accounts comes in terms of proper analysis of the competitive market along with proper calculation of the accurate cost and unit cost of the product of interest of the organization. In case of White Chemicals, which specializes in the production of the chemicals used in the copper industry, proper information of the accurate and the unit cost is must in order to grab maximum profit. However, compound which is more difficult to manufacture (T-415), needs proper refinement of the sell price via critical application of the unit cost concept by the management accounting personnel. In case of Mosby Design and Manufacturing who is producing 40,000 units (RB11) annually, proper assistance from management accountant is mandatory in order to increase the overall manufacturing turnover or to expand the dimension of the product lineup
Bamber, L.S., Braun, K.W. and Harrison, W.T., 2008. Managerial accounting. Pearson Education.
Bebbington, J. and Thomson, I., 2013. Sustainable development, management and accounting: Boundary crossing. Management Accounting Research, 4(24), pp.277-283.
Drury, C.M., 2013. Management and cost accounting. Springer.
Garrison, R.H. and Noreen, E.W., 2006. Brewer, peter C. Managerial Accounting, 11th Edition, boston: mcgraw-hill.
Isaac Mwita, J., 2000. Performance management model: A systems-based approach to public service quality. International Journal of Public Sector Management, 13(1), pp.19-37.
Lambert, C. and Sponem, S., 2012. Roles, authority and involvement of the management accounting function: a multiple case-study perspective. European Accounting Review, 21(3), pp.565-589.
Langfield-Smith, K., Thorne, H. and Hilton, R.W., 2008. Management accounting: Information for creating and managing value. McGraw-Hill Higher Education.
Li, X., Sawhney, R., Arendt, E.J. and Ramasamy, K., 2012. A comparative analysis of management accounting systems’ impact on lean implementation. International Journal of Technology Management, 57(1/2/3), pp.33-48.
Ward, K., 2012. Strategic management accounting. Routledg
To export a reference to this article please select a referencing stye below:
My Assignment Help. (2018). Management Accountant In Decision Making. Retrieved from https://myassignmenthelp.com/free-samples/management-accountant-in-decision-making.
"Management Accountant In Decision Making." My Assignment Help, 2018, https://myassignmenthelp.com/free-samples/management-accountant-in-decision-making.
My Assignment Help (2018) Management Accountant In Decision Making [Online]. Available from: https://myassignmenthelp.com/free-samples/management-accountant-in-decision-making
[Accessed 03 June 2020].
My Assignment Help. 'Management Accountant In Decision Making' (My Assignment Help, 2018) <https://myassignmenthelp.com/free-samples/management-accountant-in-decision-making> accessed 03 June 2020.
My Assignment Help. Management Accountant In Decision Making [Internet]. My Assignment Help. 2018 [cited 03 June 2020]. Available from: https://myassignmenthelp.com/free-samples/management-accountant-in-decision-making.
At MyAssignmenthelp.com, we are committed to deliver quality assignment assistance in the fastest way possible. To make our service delivery fast, we have hired subject matter experts to work on different subject specific assignments. We have hired experts who owe in-depth knowledge in their respective subjects. As per their expertise, they provide geography assignment help, Physics assignment help, Strategic assignment help, history assignment help, art architecture assignment help and assistance with other subjects as well.
Answer: Introduction The Lizzie Leather Company has been expanding the business through establishing six different centers at the different places. It is a crucial aspect for the successful implementation of this expansion is to manage an effective and efficient communication between all the centers. The aim of this report is to emphasize on the project management approach that could be an effective approach for the accomplishment of the obje...Read More
Answer: Product Description: While there is lunch program available in all the government school several students do not makes the use of food provided to them. The school food menu is restricted to sandwiches which includes meat products. Additionally, it is noticed that most the students turn to vendor that come to school premises to provide fried food. These vendors provide school students with the fried food, soda and candy though c...Read More
Answer: Introduction: The report is a discussion on management information technology with special focus on how social media provides a platform to various businesses for communicating and delivering information to the social media. The company chosen here is PureGym Limited that represents a chain of no frill clubs meant especially for fitness in the United Kingdom (PureGym 2018). These chains of fitness club have its base point in...Read More
Answer: 1. Interviewee: “The use of smart speakers is highly favourable in my house and each and every member in the house uses it for various reasons [8 second pause]. There is no particular purpose for using the voice-activated speaker in my voice, as we use it as per our requirement [6 second pause]. For instance, I use the voice-activated speaker for listening to music, as listening to music after hectic days calms me down. Oh, Yes! ...Read More
Answer: Introduction The main purpose of this assignment is to analyze the policies of Corporate Social Responsibility of a company. Corporate Social Responsibility (CSR) can be defined as the various policies which are followed by the business in order to ensure that the activities of the business do not affect the environment or the social well-being of the society (Schwartz, 2017). In other words, CSR policies requires the compa...Read More
Just share Requriment and get customize Solution.
Our writers make sure that all orders are submitted, prior to the deadline.
Using reliable plagiarism detection software, Turnitin.com.We only provide customized 100 percent original papers.
Feel free to contact our assignment writing services any time via phone, email or live chat.
Our writers can provide you professional writing assistance on any subject at any level.
Our best price guarantee ensures that the features we offer cannot be matched by any of the competitors.
Get all your documents checked for plagiarism or duplicacy with us.
Get different kinds of essays typed in minutes with clicks.
Calculate your semester grades and cumulative GPa with our GPA Calculator.
Balance any chemical equation in minutes just by entering the formula.
Calculate the number of words and number of pages of all your academic documents.
Our Mission Client Satisfaction
Receive good grades for the said subject even receive my work in the quickest possible time, although there were spelling mistakes, it was overall a good work.
Work well done. I am very happy with the information received and the level of service is top class.
Great work is done by experts. All the requirements are done whatever, I asked for> I again appreciate the whole team. I would rate 5 stars to them. thanks
It was good, but could be better if the pictures weren't used for case studies. Also the plaigarism was low.