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Managerial Accounting Assignment: What is the primary goal of managerial accounting?

   

Added on  2019-09-30

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Topic: What is the primary goal of managerial accounting?Keyword: Managerial AccountingManagerial Accounting is the process through which information is provided to the management of the organization for better decision making. Thus various costs, expenses, and revenues are measured, analyzed and interpreted for the managers to make informed decisions about the activities of the organization. The most important difference between managerial accounting and financial accounting is that the latter is used for reporting to the outside stakeholders of the company while the former assists in decision making within the company. Managerial accounting uses various forms of accounting which can help the decision makers take relevant decision based on the capability and goals of the organization. It helps to provide the metrics related to the operations and conduct of the business. Information related to the costs and expenditure helps to decide on the products and services offered by the company at prices which meet the needs of the target customers. The data from such metrics are used to plan and prepare the budget which is an important aspect of managerial accounting. Any deviations from the planned performance metrics indicate a sign of changesto be made for the achievement of the goals. Margin Analysis and Managerial AccountingOne of the attractive features of managerial accounting is that it helps to conduct margin analysis for better decision making. Decisions regarding the selection of the projects and opportunities are important decisions as it can help the company build competitive advantage for long term operations and performance. Including the aspect of margin, analysis helps the decision makers to gauge even the intricate details required to take correct decisions at the right time. Managerial accounting includes margin analysis, to ascertain the profits and compare them with various types of costs. It helps in determining the price to be charged for per unit of products and service. There are a number of margins which need to be calculated for providing information for managerial accounting. Some of the important ones include:Contribution Margin- This margin is calculated by deducting the variable expenses from the sales and dividing the figure by total sales amount. This margin has an

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