Complete: Unit 1: The Role of Managerial Accounting in Organizational Success Is the information found in the tables on page 48 best

described as primarily financial accounting data or managerial accounting data in nature? Explain. The data presented in this table would be useful to both external users and internal managers. It could be described as financial accounting data because it is an annual report based on factual and historical data only. On the other hand, this spreadsheet is not a balance sheet, income statement or a statement of cash flows that would have to be prepared in accordance with generally accepted accounting principles. In fact, these numbers were not created for the exclusive use of investors or for internal Costco management. BusinessWeek put them together to see the benefits of higher wages in directly competitive merchandising outlets. When this information was interpreted by investors on Wall Street, it would be considered financial accounting, especially since investors were concerned with Costco s overhead costs cutting into their profits. Conversely, Costco management can evaluate these results, realize their strategy is paying off historically and can base future decisions on this comparison with their primary competition. When the information is flexibly prepared, unaudited and used by internal mangers to make business decisions, it could be best classified as managerial accounting. The main distinction between managerial and financial accounting is based on the users of the data. Since the data is useful to several different interested parties for various reasons, it can neither be classified as primarily financial or managerial; it is both.

Edmonds, T. P., Tsay, B.-Y., & Olds, P. R. (2009). Fundamental Managerial Accounting Concepts, 5th edition. Columbus, OH: McGraw-Hill.

Provide additional examples of managerial and financial accounting information that could apply to Costco

As the manager of an individual Costco story, explain why you need different kinds of information than an outside investor who is considering lending money to the company or investing in common stock.