Accounting for Management Decisions

Accounting for Management Decisions Research Paper example
Masters
Research Paper
Finance & Accounting
Pages 17 (4267 words)
Download 0
Today many organisations are going out of business as a result of the mounting cut- throat market competition across the globe. Even though a company has a better range of well recognised product lines and brand names, it cannot confront with modern business situation…

Introduction

In order to be highly competitive in the market, an organisation must be able to forecast future changes in customer needs and market trends. Organisations normally predict possible future market changes by assessing past and current market flows. For this purpose, an organisation deploys a number of business evaluation tools. Activity based costing, value chain analysis, and customer profitability are the three major frameworks that assist an organisation to evaluate its business flow. This paper conducts a detailed research to identify the core concepts, objectives, pros and cons, and applicability of each of these business evaluation methodologies. The paper includes an extensive literature review section and an analysis section.
The major findings reflect that:
• Cost centre and cost driver are two core concepts of activity based costing
• Governance, innovation and upgradation, benchmarking, and product positioning are the key ideas of value chain analysis
• Cash flow, customer capital/equity, and customer as a real option constitute the core concepts of customer profitability
• The ABC approach greatly assists users to better identify their overheads with regard to activities and resources.
• The most advantageous feature value chain analysis is that this methodology assists its users to get a clear view of their core competencies

...
Download paper
Not exactly what you need?

Related papers

Management Accounting
Available at: . Anderson, DR, Sweeny, DJ, Williams, TA & Martin, RK 2007, An introduction to management science: Quantitative approaches to decision making, 12th edn, Cengage Learning. This book is quite helpful in the field of management accounting and the quantitative perspectives in decision making. The book has a great deal…
Management Accounting
Accounting may be defined as “the art of recording, classifying, and summarizing . transactions and events and interpreting the results thereof” (Introduction to managerial accounting, n. d, p.2). Two types of accounting are usually taking place in organizations; financial accounting and management accounting. Financial accounting and managerial accounting are entirely different things even…
Management accounting for business decisions Trailer Construct plc
The Trailer Construct PLC is a small family business which is in the process of expansion into a higher level of operations. The enterprise is involved in the construction and repair of trailers custom made according to the specifications of the client. The demand for construction of new trailers has been consistently rising through the five years to 2011, although demand for repair remained…
Cost Accounting and Management Decisions
Company Description Alcoa is an American manufacturing organisation which deals in producing primary aluminium and fabricated aluminium. Furthermore, the organisation is also known as one of the biggest drillers of bauxite and refiner of alumina in an international context. The primary products of Alcoa are divided into two major categories which are aluminium products and non-aluminium products.…
Management Accounting Techniques and decisions
The aspect of erasing the salary part improves the wholesome performance of the managers with the development of workplace initiatives, team work, adaptability, compliance to business policies thereby resulting in increase of the production and the service levels of the organization. The incentives are often linked in the right way to the performance measures with appropriate weight-ages to the…
Cost Accounting and Management Decisions
1). Management of this company believes in ranking the automobiles by the quantity of contribution margin earned for internal decision-making purposes. They view direct labor, direct material, and the variable manufacturing overhead as product costs while fixed manufacturing overhead as period costs (Hicks, 2002, p. 36). A major change in the company’s manufacturing has been conversion of most…
Management accounting
The decisions also help in reducing cost that a company incurs in day to day activities. The second one is by assisting the management in controlling and directing the operations of the company. A company that has well organised activities achieves efficient use of resources, (Chandler, 1977). The third one is that the information motivates employees and managers to achieve the targets set. The…