Review your initial post in the Module 1 Discussion and revise based on what you have learned in this class. My Initial Module 1 Post is below:
Managerial accounting is the process of identifying, analyzing, recording and presenting financial information so internal management can use it for the planning, decision making and control of a company. It is the information provided to the internal managers and the business’s owners so that they can plan and control and business’s activities. The work of management is to plan, direct and motivate and control the organization. The management aims at identifying alternatives that does the best job of furthering the company’s objectives. Management develop budgets to guide progress towards a selected alternative that is desired by the organizations. They also ensure that plans are being followed. The concepts of managerial accounting are variable costs, fixed costs, mixed costs and job order costing.
The concept of managerial accounting in the service industry is one that can best be explained in the company Amazon.com. Amazon.com was launched in 1995. It started as an online bookstore. Currently it is an online platform where almost everything is sold. They offer products all around the world and also provide shipping of the product to its customers. Amazon.com boasts of its customer obsession. They aim at pleasing their customers at any transactions done. They provide discounts to its customers, called subscribers during holidays and special occasions. They also pride themselves in innovation and ownership. They think long-term which is keeping their customers close and at the same time serving them with their best products. Variable costs depend on many factors such as competitive rivalry, market factors, technological factors, regulatory factors among others. For example, where Amazon.com enters into a contract with a perfume company such as Coco Chanel to sell their product online, market factors will affect the final price that is put on the online platform. Such factors include the notoriety of the product, the customer base of the product and the demand for the product. Therefore the price of the product will keep fluctuating. The amount that Amazon.com is likely to make by selling this product is likely to change periodically as the product remains on the website. Fixed costs, variable costs and job costing can be put into this service industry that is Amazon.com. These concepts can be used to improve the profitability of Amazon. com. The costs of shipping at particular places of the world should remain the same for a larger part of the business year. Amazon.com can, based on the past profits made in shipping only, not the profits made in goods, state these profits as fixed costs in the business.
Management Accounting is very application in service industries as it provides information to the internal managers and the business’s owners so that they can plan and control and business’s activities, it also helps them make correct concrete decision in the industries.