Managerial Accounting in the Case

¶ … Managerial Accounting

In the case study, we are studying a fictitious company called EEL. They are a large electronics manufacturer of radars and related equipment. Recently, the firm has been facing a number of challenges associated with their costs in manufacturing and delivering the end product to customers. As a result, EEL has hired a consultant that will help them to create a workable standard that can be used to deal with these issues. To fully understand how this can take place requires looking at: the managing / planning / control of projects and the key elements of the most effective cost accounting procedures. Together, these different factors will provide the greatest insights as to how the EEL can effectively deal with these issues.

The Managing / Planning / Control of Projects

The managing, planning and control of various projects will be streamlined to select groups of individuals in the form of a committee. They will have the responsibility of being able to improve the quality control, planning and managing of assignments by focusing on improving quality and reducing costs. This will be achieved through reducing the number of people working in the department and there will be more of focus on the use of teams to reduce their cost estimates. This is important, because it is showing how an organization can be able to use these ideas to help improve productivity and efficiency. This is the point that the operating margins of the firm will begin to decline. When learning curves are present, this will help to improve the ability of the organization to deal with a host of challenges. As, this procedure is allowing sufficient time and to ensure that everyone is able to quickly understand and implement these ideas. ("Hendrickson," 2008) (Stout, 2009, pp. 195 -- 217)

Key Elements of the most effective Cost Accounting Procedures

The first key element that we will impose is a financial accounting and control system that will consider a number of different principals. These include: improving the day-to-day reporting of organizational activities to managers, assisting in strategic planning and externally reporting to various stakeholders / regulators. To achieve these objectives there are several tools that are utilized to include: controlling the accounts payable, receivable, job costs and inventory through a series of ledgers. This is important, because it is showing how an organization can be able to use these ideas to help improve productivity and efficiency. This is the point that the operating margins of the firm will begin to decline. Once this takes place, is when the company can most effectively adapt to changes inside the sector. (Stout, 2009, pp. 195 -- 217)

At the same time, we will be implementing a procedure that will control the cash flow of the project. This is designed to ensure that there are sufficient amounts of funding to address the needs of the division. While being able to, monitor where various expenditures are taking place. The way that this is accomplished is through looking at a number of factors that are directly associated with the cash flow. These include: the total costs, billings, payables, receivables and the cash position. The combination of these elements are important, because they are showing how there is a way that the division can be able to control their overall amounts of spending. (Stout, 2009, pp. 195 -- 217)