Positioning, Managerial Accounting


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.



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.

Posted Date: 7/21/2012 3:10:46 AM | Location : United States

Related Discussions:- Positioning, Assignment Help, Ask Question on Positioning, Get Answer, Expert's Help, Positioning Discussions

Write discussion on Positioning
Your posts are moderated
Related Questions
what are the stages of operational research

Advantages of standard costing 1) Measuring efficiency: standard costing is a yardstick for measuring efficiency. The comparison of actual costs with standard costs enables t

The production department has been investigating possible ways to trim total production costs. One possibility currently being examined is to make the paint cans instead of purchas

In the current corporate world, this is a common practice of companies along with surplus cash to lend to another company for a short period generally ranging from 60 days to 180 d

Please help me with these problems Merry -Go -Around (MGR) a clothing retailer located primarily in shopping malls, was founded in 1968. By the early 1990s, the company had gon

MULTIPLE REGRESSION The least square regression equation discussed above was based on the assumption that total cost was determined by only one activity based variable. However

State the Working capital turnover ratio  Meaning: this ratio establishes a relation ship among net sales and working capital. Working capital turnover ratio shows the vel

Basic Assumption of Transportation Model The basic assumption of the model is that the transportation cost on a given route is directly proportional to the number of units tran

Standard costing in modern environment Standard costing has traditionally been associated with labor-intensive operations, but it can be applied to capital-intensive production

Morrow Company applies overhead based on direct labor hours. At the beginning of the year, Morrow estimates overhead to be $620,000, machine hours to be 180,000, and direct labor h