Managerial Accounting Essay

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The most important thing in chapter one is the Lean Thinking Model. My reason is it allows you to see the concept of doing more with less. A practical example of this is TESCO a grocery retailer in Britain uses lean thinking to improve its replenishment process for cola products.
The most important points or concepts in chapter two are how to prepare an INCOME STATEMENT and a BALANCE SHEET. My reason is they are the most important in understanding the financials of a business. They give you a picture of the performance of your business. A practical example of this is as follows:
Company revenue-expenses= net income= 6000-4700=1300 this 1300 net income must also be shown on the balance sheet as equity. (Garrison, 2010)

The most
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(Garrison, 2010)

The most important point or concept in chapter seven is differentiating variable and absorption cost. Variable cost shows product cost as those that vary with output. In contrast absorption cost is associated with fixed overhead as product cost, along with direct material and direct labor. Selling and administrative are treated as period cost and expensed on the income statement. These costing methods are primarily used in manufacturing. The difference is fixed manufacturing is accounted for differently. An example would be taking overhead cost such as glue to make a cabinet and distributing it in way that it becomes a part of the cost of each unit produced. (Garrison, 2010)

The most important point or concept in chapter 8 is activity-based costing is the method that is used by managers to provide information for decision that affect capacity. This affect fixed as well as variable costs. An example would be the cost to prepare a variety of food for different ethnic group. The amount of food prepared for each person in a particular ethnic group would be a cost driver. Therefore, the cost associated with the preparation for each group is expended based on the activity. (Garrison, 2010)

The most important point and concept in chapter 9 and 10 is budgeting. Budget is a quantitative plan for acquiring and using resources over a specified time is essential in strategic planning and control of an

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