Question

Describe the four major types of internal management decisions that utilize management accounting information

Answer 1

Four major types of internal management decisions that utilize management accounting information are as follows.

• Production Decision

Deciding about what to produce and by which means , this decision is taken on the base of which product is most profitable to produce and which means is most cost effective.

• Marketing Decision

This decision involves setting selling price for the final product and finalising marketing budget ,

• Resources allocation decision

Deciding amount what amount of capital or resources should be allocated to which part of the organization ( Production , sale , administration etc ).

• Financial or Investment Decision-

Deciding about what amount of capital is to be invested and what amount of capital should be retain in the business for paying its day to day business expenses.