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What is managerial accounting?
Let us first brief ourselves with the subject of managerial accounting. It is that branch of accounting which deals with the preparation of weekly or monthly management reports for a business or an organization. These reports are prepared by analyzing the statistics and they provide information about the financial condition of that organization. These reports are addressed to the managers rather than to shareholders. These are studied by the managers and higher authority officials to make decisions about the organization.
Managerial accounting plays the role of an advisor and warns the manager about the upcoming problem in the organization and with the help of these reports; the manager gets an insight about the strategies of profit-making.
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What is the content of managerial accounting reports?
Managerial accounting homework solutions help you in preparing managerial reports. These reports talk about the various parameters of a financial organization like the amount of raw material that is available, cost estimation, production details, revenue generation, profit analysis etc.
Fundamentals of managerial accounting:
- Concept of measurement of money
For doing business, exchange or transaction takes place. Only those transactions whose monetary value(value in terms of money) can be determined are taken into business consideration.
- Organizational forms
The type of ownership of an organization determines its organizational form; it can be proprietorship, partnership or co-operative.
- Single and double entry systems
Transactions can be entered as single or double entry. When transactions viewed from both the giver’s and receiver’s aspect are merged together into a single entry, it is called single entry system and when transactions are entered from both the receiver’s and the giver’s aspect, it is called double entry system.
- Reaction of stakeholders
A stockholder is a person who is concerned about the organization and takes interest in its working. The investors, the managerial team, the employees etc. are the examples of stockholders. Managerial accounting explains how the stakeholders react to an organizational situation.
Need of managerial accounting:
- It helps the managers in making a decision beneficial for the company after going through the managerial reports.
- Overall performance of the organization can be evaluated.
- It gives information about the cost invested in production and the revenues generated. Therefore, these reports on managerial accounting help in calculating the profit percentage.
- It helps in planning and implementing proper rules in the organization so that the organization can work smoothly.
- It increases the overall efficiency of the organization.
As we can see, managerial accounting is basically a 3-stage process. The first step is collection of information about the working and operation of an organization, the second stage is analysis of this information and the third stage involves submission of this report to the higher officials, mainly the managers, so that the managers can have a look and work out ways for the effective functioning of the organization.
Managerial accounting homework solutions see to it that you are provided with a comprehensive and detailed solution to your questions.
A discussion on managerial accounting homework solutions will not be effective if we do not talk about the functions of managerial accounting.
Functions of managerial accounting:
- Keeping records of financial and other statistical data of an organization, and then analyzing them.
- Managerial decision statements are made.
- Covers all levels of management.
- Calculates the cost of creation of new designs of the product and provides this information to the management, which is known as target costing.
- Estimating the value of direct cost of sale and inventory, after allocating overhead charges to all the commodities, which is called inventory valuation.
Managerial accounting homework solutions not only help you with assignment questions but also provide you with a depth of the subject and its application.
Application of managerial accounting:
Managerial accounting finds use in the field of constraint analysis, trend analysis, transaction analysis, margin analysis, break-even analysis and capital budgeting analysis.
- Constraint analysis:
Understanding the obstacles present in a company, and how these obstacles hinder the company’s ability to earn profit.
- Trend analysis:
Checks if the variance is deviating from the normal variance of the company and finds out the reason for this deviation. Trend analysis reviews the trend-line of a company by checking its expense and returns.
- Transaction analysis:
After getting the report of trend analysis, a person of managerial accounting department tries to find the reason for the change in variance by going through every single transaction made by the company, the findings of which are then entered in the managerial reports.
- Margin analysis:
Margin analysis deals with profit calculation.
- Capital budgeting analysis:
It examines whether in an organization, fixed assets are required to be acquired and provides help with financial ways of acquiring them. This is capital budgeting analysis.
Students have to deal with a large number of subjects which overburden their shoulders. If you don’t clarify your basics, you will not be able to understand the complex topics of the subject. When you need to build your concepts in managerial accounting, and have a shortage of time and the load of homework is burdening you, managerial accounting homework solutions is the right place for you.