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Management Account is helpful in decision making. Explain. Or, Why Management Accounting Is Important in Decision-Making

Posted by Ripon Abu Hasnat on Tuesday, February 2, 2016 | 0 comments

Managerial accounting information provides data-driven input, which can improve decision-making over the long term that helps to make their business more successful in business decision contexts.

1. Relevant Cost Analysis: Managerial accounting information is used by company management to determine what should be sold and how to sell it.

2. Activity-based Costing Techniques: By using activity-based costing techniques, management can determine the activities required to produce and service a product line.

3. Make or Buy Analysis: By completing a make or buy analysis, management can determine which choice is more profitable. While this technique is certainly useful, the decision makers should only use these analyses as a factor in the decision.

4. Utilizing the Data: It provides a data-driven look at how to grow. By focusing on this data, decision makers can make decisions that aim for continuous improvement and are justifiable based on intelligent analysis.