Question

CP 1-5 Using managerial accounting information The following situations describe decision scenarios that could use managerial account- ing information: 1. The manager of High Times Restaurant wishes to determine the price to charge for various lunch plates. 2. By evaluating the cost of leftover materials, the plant manager of a precision tool facility wishes to determine how effectively the plant is being 3. The division controller of West Coast Supplies needs to determine the cost of products left in inventory. run. 4. The manager of the Maintenance Department of a large manufacturing company wishes to plan next year's anticipated expenditures. For each situation, discuss how managerial accounting information could be used.

Answer 1

1. Managerial accounting information in this case can help manager of Burger Ban with the necessary information as to the total costs associated with the lunch plates . So the manager can add a margin to the price to determine the price to be paid .
2. In this case the managerial accounting information in form of cost sheet on material can help the plant manager to estimate the efficiency of plant being run and take corrective action where it is necessary .
3. Managerial accounting information on valuation of closing stock can help the division controller to ascertain cost of products left in inventory
4. The master Budget and capital budgeting can help manager of maintenance department to plan next year's anticipated expenditures . l