Question

A large manufacturer of electronic machinery stated the following as one of its goals: “The company should become the low-cost producer in its industry.” How can managerial accounting help the company achieve this goal?

Answer 1

Management accounting techniques would be used to monitor and control costs. Managerial accounting techniques will focus on cost reduction plan, products, processes, procedures, organisation and methods are continuously scrutinised to improve efficiency and reduce costs.

Managerial accounting will make optimum combination of Men, Materials, Machinery and Methods and also in its control function, by assisting management in location of weak spots and in taking corrective steps. It emphasises on all sorts of accounting analysis, costing, budgetary control and certain statistical and graphical techniques thereby helping the company to become low cost producer.