Importance Of Decision Making For Managerial Accountants

Decision Making for Managerial Accountants
Managers are required to solve problems in their organization by making decisions every day and sometimes their decisions may not have much of an influence in the organization. However, those decisions could impact lives of many people in positive or negative ways. Therefore, decision making in an organization must be systematic and strategic. Specifically, when it comes to management accountants, “they focus on forecasting and decision making” by using financial information to help in their decisions to make sure the business moves forward” (Business case studies, 2016). Therefore, they have to thoroughly analyze a problem before making a decision. In this paper, I will explain the decision making models steps I will take use to determine a plan of action, explain technique that would be helpful in the

At present, the laboratory carries out 12,000 tests each period but, because of current difficulties with the beef herd, demand is expected to increase to 18,000 tests a period, which would require an additional shift to be worked” (Walker, 2009). The sales revenue per test is ‎£300. The current cost of carrying out a full test is £115 for materials, £30 for technicians’ wages, £12 for variable overhead and £50 for fixed overhead. In addition to working the additional shift, there is a required 50% premium that will be added to the technicians’ wage, the fixed costs will increase another ‎£700,000; however, there will be a 20% discount to material orders to cover 18,000 tests (Walker, 2009). I want to come up with a decision on what to do to make sure that the additional tests and shift do not decrease the profitability. In order to do that, I will have to use the best possible decision making models and techniques to assist me in making up my final