I.

Goal of Managerial
Accounting
The goal of managerial accounting is to
provide information that managers need
for:
A. Planning
B. Control
C. Decision Making
 A. Planning
Plan

Action taken to
Implement plan

Plans communicate goals to employees to coordinate functions such

as sales and production. Financial plans are often expressed in the
form of budgets (i.e., profit, cash, production budgets)
 B. Control
Plan

Action taken to
Implement plan

Results

Comparison of
planned and actual
results

Evaluation

Performance reports compare actual with planned (budgeted)

performance. Management by exception is used meaning that only
significant deviations are investigated (see Illustration 1-3 on p. 5)
 C. Decision Making
Plan

Decisions to Action taken to

change operations Implement plan
or revise plans
Results

Decisions to Comparison of
reward or punish planned and actual
managers results

Evaluation

The distinction between evaluating managers and evaluating the

operations they control is important. For example, an evaluation of
an operation can be negative even when the manager evaluation is
positive.