Homework chapter 1 Essay

1675 Words Sep 16th, 2014 7 Pages
Questions Chapter 1

1. How does managerial accounting differ from financial accounting?
The essential difference between managerial accounting and financial accounting is that managerial accounting attends the needs of managers inside the organization, while financial accounting serves the needs of those outside the organization. There are also specific guidelines that are used (GAAP/IFRS) in financial accounting and is mandatory whereas there are no guidelines in managerial accounting and is not mandatory.

2. Pick any major television network and describe some planning and control activities that its managers would engage in.
The Fox Broadcasting Company (FOX), is an American commercial broadcasting television network that
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A company who chooses to make rather than buy is at risk of losing alternative sources, design flexibility, and access to technological innovations.

4. Why do companies prepare budgets?
Companies prepare budgets because it is a fundamental part of their planning process. Preparing budgets gives a company a quantitative plan that will be used to complete a project or strategy.

5. Why is managerial accounting relevant to business majors and their future careers?
Managerial accounting involves planning, controlling and decision making processes that are very helpful in business major such as marketing, operations management and human resource management. For example, marketing managers make planning decisions related to allocating advertising dollars across various communication mediums and to staffing new sales territories. From a control standpoint, they may closely track sales data to see if a budgeted price cut is generating an anticipated increase in unit sales. Operations managers have to plan how many units to produce to satisfy anticipated customer demand. They also need to budget for operating expenses such as utilities, supplies, and labor costs. In terms of control, they monitor actual spending relative to the budget, and closely watch operational measures such as the number of defects produced relative to the plan. Human resource

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