Managerial Accounting Research

Document Type:Research Paper

Subject Area:Accounting

Document 1

This research will focus more the internal users. The internal users use managerial accounting to help them make correct decisions. Managerial accounting therefore refers to providing the staff with adequate information to allow them make decisions regarding managerial activities such as control ,decision. and planning. The main aim of managerial accounting is to provide information to managers in order to allow them make the best decision in the business thus it help the managers to run the organization in a more efficient way (Hayes 1977). Establish the efficient way of communicating and reporting system. The report prepared in managerial accounting, communicate essential information to the managers which will help them in making decision. This information highlights to the managers on what they should improve on to enable the smooth running of the organization.

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The managerial accounting helps the managers to know areas which they should improve on in order to maximize on the profit in the business. Management accountant help the organization to make decisions based on the finding of the managerial accounting. The management accountant their fore decides on how to properly maintain the mix between equity and debt. The management accountant therefore has to decide on which method to raise the capital of the company. He sustains an optimum capital structure of the organization and consider if trading on equity. Since the main reason for venturing into business is to make profit, management accountant will help the organization on the different ways to invest the capital, which is when, how and where the investment should be done in order to maximize on profit.

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Management accountant assist in short-term and long term planning of the organization. Communication Providing the right information to the management at the right time will enable managers perform their function like planning and decision making effectively. This will lead to success of the managers. However if the information is not provided at the right time can lead to failure of the organization. The management accountant should provide the necessary information to the managers. Decision making Selecting the best alternative is necessary for the smooth running of the business. Different management techniques are used by management accountant so that they can measure, plan, analyse and control business operation cost in order for the business to get maximum profit. For example the production company can use the cost management techniques in order to control what is being produced in the company.

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This will enable the company to enjoy the benefits of economies of scale. Cost management techniques are: Cost of business techniques is important since it helps in the success of the business. Basically there are four cost management techniques. Considering outsourcing projects Production cost should be considered, if a project can be done with a cheaper price. Then it is more viable than doing the same project in your organization. For example a project can be done outside the country at a lower price will be more appropriate. It will reduce on the cost and that will mean more profit to the business. The extra cost can be used for another project. Behaviour of Cost and revenue in the business will help in drafting the budget.

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Budgeting is therefore the process of communicating predicted resources and costs for planned course of action over a given period of time. The budget of a company can be drawn from departments or business units. Budgeting is important in helping the organizations to plan their operations and control them. It also supports the managerial strategies of the business. They are presented to guide the managers to plan and adjust in accordance with the difference in revenue. They are draft budgeting and normally presented on a weekly basis. 2) Cash flow budgets This budget measures the amount of money that is coming in the business and that which is going out of the business on a daily basis. Thus it measures the inflow and the outflow of cash.

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