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Cost Volume Profit In Managerial Accounting

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Cost-Volume-Profit (CVP) Analysis Weygandt, Kimmel, & Kieso (2011) explained the accounting should be managed besides managing the organization as all. Therefore, the concept managerial accounting is raised. It is defined as the field of accounting where it provides economical and financial information to stakeholders. As part of managing accounting, there should be some activities to be done in order to guarantee the reliability of the information provided. The first activity is to explain the manufacturing and non-manufacturing costs. The second is to compute the cost of providing services/manufacturing a product. The third activity relates to the determination of the cost behavior along with the expenses according to the changes of cost-volume-profit …show more content…

However, it is also used as a content of the reports as it pertains to the business pertains in a detailed and standard data formula. Furthermore, management accounting is verified, processed as no independent audits. As managerial accounting is having its own control over the organization, it is involved in the managerial functions of planning, directing, and controlling. The connectivity of managerial accounting to the planning function is raised from the maximizing of profits, maintaining environmental protection, and contributing in social responsibilities. Directing and managerial accounting is involved as accounting coordinates the activities and human capital to sustain smooth and continues operation. To sustain the organization of its activities track, managerial accounting plays a major role in controlling the function (Weygandt, Kimmel, & Kieso, 2011). Managing accounting requires managers to perform several analyses to guarantee and ensure the process of production is based on the objectives stated. However, one part of these analyses is related to linking the profit with prices, costs, and volumes. This link is aimed to determine any possible adjustments should be made to …show more content…

Regarding this, the revenue recognition would assist the organization in several ways. It would remove weaknesses in the current revenue literatures. Moreover, it provides a framework that addresses revenue issues. Besides, revenue recognition improves the comparison of revenue practices among the industry and who is in the industry. Furthermore, the revenue recognition reduces any complexity in applying the requirements of revenue through reducing relevant standards volume. Additionally, this would provide useful information to stakeholders by disclosure the requirements (Financial Accounting Standards Board,

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