Management Accounting And The Sources Of Data Used In Decision Making

Submitted By shunta275
Words: 1284
Pages: 6

Final: Management Accounting and the sources of data used in decision-making
LaShanwda S Surles
Instructor: Angela Sneed
December 19, 2011

Accounting is something that requires a lot of reading and this class along with my previous accounting class has made me do just that. Along with asking questions from a former employer who is a local accounting in my city about the managerial duties of accounting and he referred me to his office manager Ms. Jessie Feagin. I will discuss management accounting, the sources of data, and how this data is used to make managerial decisions. In addition, I will share some comments from Ms. Feagin the office manager of C & Associates, who makes the financials and office decisions that sometimes have to be authorized by the owner Mr. C. Ford, CPA and incorporate some information from an article in regards to managerial accounting. According to Horngren al et, (2012), managerial accounting is for internal planning and control, along with providing the information needed to help managers plan and control operations as they lead the business to profit. It also requires forward-looking information because of the futuristic nature of business decisions (Horngren al et, 2012). In addition, office manager Ms. Feagin (C & Associates), stated that when it comes to management accounting this really does help manager’s plan and find ways to control operations to make the business successful and run properly. There are many different aspects of management accounting and being able to manage a business is one aspect alone, for sometimes this is a challenging task and often requires help from others to assure the right decision is made for the business. With this aspect the manager has the ability to set and determine operations and production costs with the use of data obtained to help in the decision-making process of what, if anything, is needed to be cut or not. While another aspect would the managing of business equipment that will soon be depreciating over time. During the depreciation period it makes room for the more new, efficient, and reliable equipment that is being developed to help management determine when equipment needs to be repaired and upgraded to keep up with today’s economic times. Ms. Feagin (C & Associates) stated that even though the depreciation of the equipment is great when reporting it on the income statement, but this tool it is really helpful and it keeps the business running smoothly as long as equipment is running up to par. Then the final aspect of management accounting would be how it helps with the human resources department. According to Ms. Feagin (C & Associates), the managing of human resources can help determine whether or not turnovers of employees are going to be high or if the retention rate that in turn goes back to the employees will also be affected. Horngren al et (2012), states that if a business has a high turnover rate of employees it could definitely be bad for the business and could eventually become very costly due to always having to hire new employees. For example, the firm has a client in which Ms. Feagin does the bookkeeping for their business and this one in particular business has a high turnover of employees especially now since the farmer’s have lost many of their employees due to the new Immigration Law in Alabama, and this has really effected how this business operates. And as far as the retention rate being high this could be food for the business by not only preventing hiring costs, but it can also help with making sure the company has experienced employees. (2012) states, “Sources of management accounting is used to help managers determine the company’s efficiency and effectiveness in production thru planning and controlling.” This is positively true and manager’s use planning to help choose certain goals and make right decisions on how they will achieve them by using the data obtained