Introduction to Managerial Accounting

Introduction to Managerial Accounting

Details of Fortress Motors Limited

Fortress Motors Limited Company is a firm based in the outskirts of New York. The firm, which deals with sale of motor vehicles, has established a huge customer case in New York. I am the chief test driver, and a member of the company’s management team.

Planning and Control Through Managerial Accounting

Managerial accounting is a core of our company operations as it assists us in reaching many objectives. Firstly, the managerial accounting department works closely with other managers to make sure that Fortress Motors Limited Company maintains its competitive advantage in the car market. Helping in operational tasks in the company is another major objective that the company pursues through managerial accounting. This fact is highlighted in the chapter Managerial Accounting: Tools for Decision Making that states that managerial accounting provides a framework for organization, evaluation and report of data according to organization goals. (“Chapter 1: Managerial Accounting,”)

Due to the critical role the management accountant plays, this office is already in the overall management team. It is important to note that Managerial accountants are not only useful in planning and decision-making, but they also enhance the firm’s competitive advantage of Fortress Motors Limited Company (Hilton, 2008).                                                            It is in planning and controlling of Fortress Motors Limited Company that the importance of managerial accounting been very evident. The management team for our company relies a lot on information from managerial accounting department. For example in February 2013, the company embarked on an equipment improvement project. The decision on whether to do an overhaul job or maintain sections of workshop depended on maintenance estimates.  Key in the plan would be a detailed budget on revenues and costs for labor and equipment. It would be difficult to get information from the managerial accountants if they were not part of the management team, Spiceland et al. (2009).

On a daily basis, the equipment improvement project required several data regarding the operations. Most of this was on operations control, whereby management constantly compared the budget estimates with the costs incurred. Even though managerial accounting does not itself solve the problem at hand, it helps management focus on that problem. For example, towards the end of February, the cost of lighting fixtures was very high. This information did not indicate why these costs increased nor did it give management what options to take to reduce cost. When management received this information, it was able to make a relevant decision. Eventually, management opted for low-cost yet effective lighting fixtures manufactured locally (Hilton, 2008).

Roles of Managerial Accounting in Fortress Motors Limited

A managerial accounting role that has come vividly is helping members of a team share a common goal. Considering the diversity of goals of every individual in an organization, motivation towards one goal is very essential. Budgeting is one of the ways in which managerial accounting has enabled every employee at Fortress Motors Limited Company pursue a common goal. Since the budget allocates resources, it is very simple to check whether any employee is deviating from the plan, (Spiceland et al. 2009).

By virtue of the fact that the company is in constant need of information, managerial accounting is a core part of management in the firm. All the main purposes of managerial accounting have proven essential for overall success of Fortress Motors Limited Company.



Chapter 1: Managerial Accounting: Tools For Decision-Making. (n.d.). Retrieved from

Hilton, R. W. (2008). How Managerial Accounting Adds Value To The Organization. In Managerial Accounting: Creating Value in a Dynamic Business Environment, 7/retrieved from

Spiceland et . al. (2009). Intermediate Accounting (5th Edition). McGraw-Hill/Irwin. p. 10



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