Positioning, Managerial Accounting

Assignment Help:

Positioning

An essential part of the planning process is positioning the organization to attain its goals. Positioning is a wide concept and depends on gathering and evaluating the accounting information.

937_positioning.png

 

Cost/profit/Volume Analysis and the Scalability -- In a subsequent chapter, you will get to know about cost/profit/ volume (CVP) analysis. It is very important for managers to understand the nature of the cost behaviour and how changes in volume impact profitability. You will get to know about calculating break- even points and how can you manage to achieve target income levels. You will start to think about business models and the ability (or inability) to bring them to profitability via rise in scale.

Managers call ahead their internal accounting staff to pull together information and make the appropriate required recommendations.

Global Trade and Transfer -- The management accountant often performs significant and complex analysis related to the global business activities. This needs in-depth research into laws about tariffs, shipping and taxes. In addition, global enterprises can transfer inventory and services between affiliated units in alternative countries. These transactions should be fairly and correctly measured to establish reasonable transfer prices and potentially run afoul of tax and other rules of the various countries involved. Once again, management accountant is known to the task.

Branding/Sensitivity/Pricing Competition - In positioning the company's products and services, considerable thought should be given to branding and its impact on the business. To build a brand needs considerable investment with the uncertain payback. Often, the same product can be "positioned" as the elite brand via a huge investment in up-front advertising, or as a common consumer product that will depend upon low price to drive sales. What is the proper approach? Information is required to make the decision, and management will probable enlist the internal accounting staff to make prospective information based upon alternative scenarios. Likewise, product pricing decisions should be balanced against costs and competitive conditions of market. And, sensitivity analysis is required to determine how sales and costs will respond to the changes in market conditions.

As you can observe decisions about positioning a company's products and services are kind of very complex. The prudent manager will require considerable data to make reliable and good decisions. Management accountants will be directly concerned in providing such data. They will typically work side-by-side with management in helping them correctly interpret and utilize information. It behoves a very good manager to study the basic principles of managerial accounting in order to understand better how information can be effectively utilized in the decision process. With these sorts of topics in play, it is no surprise that the term "strategic finance" is increasingly used to characterize this particular profession.


Related Discussions:- Positioning

Types of costs, Types of Costs In short run, costs can be of three gene...

Types of Costs In short run, costs can be of three general kinds: Fixed Cost: Total fixed costs stay constant as volume differs in the relevant range of production. Fixe

Identify which of the entities listed should record, Frontier Sports sells ...

Frontier Sports sells hunting and fishing equipment and provides guided hunting and fishing trips. Frontier Sports is owned and operated by Wally Schnee, a well-known sports enthus

The securities and exchange commission (sec), Explain:- Q.1 As a potent...

Explain:- Q.1 As a potential investor, what is the problem with different countries having different accounting standards? As the president of a multinational company, what is

Steady state condition, Steady state condition In many cases, the Marko...

Steady state condition In many cases, the Markov process will converge to a steady state or equilibrium. In general, as number of transitions `n' increase, the state values

Accounting, what is Computerized Processing Systems

what is Computerized Processing Systems

Explain standard costing according to backer and jacobsen, Explain standard...

Explain standard costing according to backer and Jacobsen According to backer and Jacobsen, standard cost is the amount the firm to measure the variation from standard costs th

Adjusted profit and loss method, Under this method, approximated profit is ...

Under this method, approximated profit is calculated depends on transactions of the ensuing period. Afterward, decrease or increase in working capital is determined adjusting the e

Decision - making, Decision Making Some managers appear to have an...

Decision Making Some managers appear to have an intuitive sense of good decision making. The reality is that good decision making is hardly ever done by intuition. Consist

Contigency theory, CONTIGENCY THEORY Some researchers have argued that ...

CONTIGENCY THEORY Some researchers have argued that the context in which budgetary control is used is as important as the style in which it is implemented and used. This is ter

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd