Category Archives for Managerial Accounting Topics

Make or Buy and Outsourcing Decisions

Outsourcing is a hot topic in business right now. Outsourcing is when a company decides to purchase a product or service from another company rather than make the product or perform the service itself.

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Sell or Process Further

The sell or process further decision type is mainly applicable to farms and producers of natural resources. These businesses must decide to sell farm products or natural resources as is or turn that inventory

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Operating Budgets – Sales, Production, Direct Materials, Direct Labor, Overhead, Operating Expenses (Selling and Administrative)

To download the problem used in these videos: Paper Airplane International Budgeting Problem. Related Videos Sales BudgetProduction BudgetDirect Materials Budget, Part 1Direct Materials Budget,

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Responsibility Centers

As managers get more decision making responsibilities because of decentralized management, organizations must find ways to evaluate those managers in an effective way. The first step in the process is

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Performance Evaluation Reports for Cost, Revenue, and Profit Centers

Performance evaluation requires managers to have a benchmark to use as a guide for future periods. This benchmark is communicated to managers via a budget for their responsibility center. At the end of

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Return on Investment: Investment Center Performance Evaluation

An investment center includes profit and the efficient use of assets. The traditional performance reports only measure revenue and expenses. We need a way work assets into the evaluation. Typically when

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