Managerial accounting is an accounting option that provides the essential data for running an organization. Its concerns being providing information to people inside an organization who direct and control its operation. In this essay am going to reflect on the following three assignments: "Managerial verses Financial accounting", "Break even analysis" and "job order cost information".
Reflecting on Financial verses managerial accounting, techniques taught aid the management in the costing of products or services with the aim of solving common problems. These techniques provide key data elements to managers for planning, controlling and costing products, services and customers. This assignment equips my ability to solve problems using information and knowledge in the future career as a manager. As a student, it expands my skills of independently developing creative solutions to implement in a new setting.
Break even analysis is a technique used, by the production management, to categorize production costs between variable and fixed costs. Variable costs are costs that change with the production output while fixed costs are costs independent of volume production. Break even analysis as the production manager in future will help me determine the level of sales volume and the break-even-point. Determination of the break-even-point is useful in determining the production in which the company makes neither a profit nor a loss. Break even analysis is a tool used to determine the safety margin of an organization in terms of production.
"Job order cost information for decision making", seeks to estimate costs of production for different jobs included in customer orders. It maintains detailed records of all job order associated costs from the raw material inventory to work in progress through the finished products. This system as the manager in future helps me in the bidding and quoting of a product having predetermined the overhead cost of a product. Overhead rates represent the total manufacturing costs of a product. Job order cost information also helps in determining how customized production will impact costs on both the organization and the customer.
From the topics learned, the three most intriguing topics were: the master budget and responsibility accounting, performance evaluation and variable costing. This is because they all aim at computing the correct quantities of goods and materials. The four most challenging topics were cost volume-profit analysis, activity based costing, break-even-analysis and process costing because they all involve assigning costs to products to determine the profit and loss.