Question

Illustrates how managerial accounting methods support the mission of the organization using specific examples".

Answer 1

Managerial accounting is an internal function that analyses the managerial information and provide useful outputs for decision making for the managers.

It includes budgeting, forecasting, cost allocation, departmental profits and so on.

Support to the mission statements-
1) The organizations mission statement is generally prepared based on the outcome of the managerial information.

Example- The mission statement may include that the organization would achieve one billion dollars net worth in another 5 years. This mission statement is possible based on the forecasting of next 5 financial statements.

2) The mission statements are evaluated and changed if needed based on the outcome of managerial information.

Example- The progress of the company is evaluated based on the managerial accounting. When the organization is likely to be affected with any unforeseen events, the mission statements may be changed. These unforeseen events are recognized with the help of control procedures and risk assessment techniques, which are included in managerial accounting.