Need help with the concepts of a paper discussing the principles and concepts of managerial accounting. Below are the concepts that must be included.
These concepts must be discussed within the paper: an overview of managerial accounting and the business environment, cost term concepts and classifications; cost behavior analysis and use; cost-volume-profit relationships; variable costing (a tool for management); activity based costing (a tool to aid decision making); profit planning, standard costs and the balanced scorecard; flexible budgets and overhead analysis; relevant costs for decision making; financial statement analysis (how well am I doing).
1. Managerial Accounting:
Managerial accounting relates to giving information to managers. The managers are people in an organization who have the authority to direct and control it. Managerial accounting identifies, analyzes, interprets, and communicates information for helping managers achieve the firm?s goals. It provides vital data with which the firm is run. For example, managerial accounting provides managers with indicators such as order backlog, capacity utilization, and sales. Managerial accounting helps managers make decisions. It also updates them on the current operations.
2. Business Environment:
Business Environment refers to the external factors that impact the functioning of the business. These are social, legal, economic, political factors, or institutional factors that cannot directly be controlled by the business. These factors are important because they directly impact the functioning of the business. The business environment is divided into the micro environment which consists of channels of distribution, customers, competitors, public, and suppliers. These are close to business and affect its working directly. The macro environment consists of factors such as the economy, political environment, technological environment, natural environment, demographic environment and socio-cultural environment. The macro environment is responsible for creating threats and opportunities for the business.
3. Cost term concepts and classification:
There are cost terms that are important these include the manufacturing costs which is also the product cost. This comprises direct materials costs, direct labor costs, and manufacturing overhead, the direct material and direct labor costs are together classified as prime costs, and the direct labor costs and manufacturing overheads are together called the conversion costs. Non manufacturing costs have two components mainly selling costs and administrative costs. One of the important concepts used in cost accounting is the cost of goods sold. This is the beginning merchandize inventory, plus purchases less ending merchandize inventory. Cost classification is carried to prepare external financial statements, to predict cost behavior in response to changes in activity, assigning costs to cost objects such as departments or products, and making decisions. Common examples of cost classifications are product costs, period costs and variable costs.
4. Cost behavior analysis and use:
Cost behavior analysis is the examination of variable costs to determine their response to changes in production or sales volume. Broadly, what is examined is the manner in which costs react to changes in the ...
Managerial decision making using accounting information is explained in a structured manner in this response. The answer includes references used.