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Accounting

27th Edition
WARREN + 5 others
ISBN: 9781337272094

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BuyFindarrow_forward

Accounting

27th Edition
WARREN + 5 others
ISBN: 9781337272094
Textbook Problem

Managerial accounting in the management process

For each of the following managers, describe how managerial accounting could be used to satisfy strategic or operational objectives:

1. The vice president of the Information Systems Division of a bank.

2. A hospital administrator.

3. The chief executive officer of a food company. The food company is divided into three divisions: Nonalcoholic Beverages, Snack Foods, and Fast-Food Restaurants.

4. The manager of the local campus copy shop.

To determine

Managerial accounting:

Managerial accounting is the process of identifying, measuring, analyzing, interpreting, and communicating the information, which is designed to meet the goals of the organization.

To describe: The way in which the managerial accounting could be used to satisfy strategic or operational objectives for each of the following managers.

Explanation

  1. 1. The managerial accounting can be used in a number of ways by the vice president of the Information systems division of a bank. Some of them are as follows:
    • The managerial accounting helps the vice president to determine the resources that will be required in the future, on the basis of a projection of the amount, and type of work required for the next period.
    • It helps the vice president to decide whether the bank should lease out the additional processing capacity or it should purchase a new central processing unit.
    • It also helps to have a better control over the activities of the information system by the way of evaluating the costs of the ongoing operations, based upon the demand for the information services.
  1. 2. The managerial accounting can be used in a number of ways by a hospital administrator. Some of them are as follows:
    • The managerial accounting helps the hospital administrator to have a control over the cost by way of keeping the costs in proportion with the services provided, and it also helps in cost planning by way of planning the levels of staffing, and nursing. This helps in making decisions with respect to the amount of services provided.
    • It helps the hospital administrator to determine whether the costs of the hospital are being covered under the fixed payments from Medicare, Medicaid, or insurance. If the costs are not covered, then the administrator needs to know the source of the cost overruns...

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