Welfane Precious So BSMA 3

1. What is managerial accounting?

Managerial accounting is the practice of identifying, measuring, analyzing, interpreting, and communicating financial
information to managers for the pursuit of an organization's goals. Managerial accounting differs from financial
accounting because the intended purpose of managerial accounting is to assist users internal to the company in making
well-informed business decisions.

https://www.investopedia.com/terms/m/managerialaccounting.asp

2. Define organizational chart and illustrate. Choose your own company.

An organizational chart is a diagram that visually conveys a company's internal structure by detailing the roles,
responsibilities, and relationships between individuals within an entity. It is one way to visualize a  bureaucracy.
Organizational charts are alternatively referred to as "org charts" or "organization charts."

https://www.investopedia.com/terms/o/organizational-chart.asp

3. What are planning and Control decisions categories

Planning is the process of establishing goals and communicating these goals to employees of the organization. The
Control function is the process of evaluating whether the organization’s plans were implemented effectively.

https://saylordotorg.github.io/text_managerial-accounting/s05-02-planning-and-control-
functions.html#:~:text=Planning%20involves%20establishing%20goals%20and,the%20organization%20as%20a
%20whole.
4. Discuss planning and Control decisions categories

Organizations formalize their plans by creating a budget, which is a series of reports used to quantify an
organization’s plans. For example, Ernst & Young, an international accounting firm, plans by establishing a budget
indicating the labor hours required to perform specific services for each client. The process of creating a budget for
each client enables the firm to plan for future staffing needs and communicate these needs to employees of the
company.

The control function evaluates whether an organization’s plans were implemented effectively and often leads to
recommendations for the future. Many organizations compare actual results with the initial plan (or budget) to
evaluate the performance of employees, departments, or the entire organization, for example, assume Ernst &
Young creates a budget indicating the labor hours needed to perform tax services for a particular client (this is
the planning function). After the work is performed, actual labor hours used to complete the work are compared to
budgeted labor hours. This analysis is then used to evaluate whether employees were able to complete the work
within the budgeted time and often results in recommendations for the future. Recommendations might include the
need for adding more labor hours to the budget or obtaining better support documents from the client.

https://saylordotorg.github.io/text_managerial-accounting/s05-02-planning-and-control-
functions.html#:~:text=Planning%20involves%20establishing%20goals%20and,the%20organization%20as%20a
%20whole.