Homework Assignment
Chapter 1,2, 3
Nicolo Muraro
Lawrence Tech University
MBA
Detroit, 01/24/2016
1.1 How does managerial accounting differ from financial accounting?
In looking at the words that compose the names themselves we can understand that
Managerial Accounting is oriented to support all the management activities in supporting
their decisions making and Financial accounting is instead focused on providing financial
markets with finance information about the company. As we go through the book we
went identified 7 main areas with differences. I will mention a couple of them. Financial
Markets are obviously regulated and as a consequence of this managerial accounting lives
under a broad freedom in comparison with financial accounting. Also, managerial
accounting is more fragmented and can be specific to different areas of the company. As a
last important factor that I want to mention is the role that both of them have in relation
with time. Managerial accounting is used by managers and entrepreneurs for future
company planning, financial management is summarizing and documenting past
company events.
1–4 Why do companies prepare budgets?
Budgeting is a fundamental activity in a company. It is part of the overall planning and it
will be analyzed and used along the way to the launch of a product or service and will be
reviewed after the launch. I see it as the transformation of ideas and concept that support
the planning activities of the management in actual numbers that gives me/us the
opportunity to evaluate the feasibility and quality of the previously mentioned planning
activities. It help us in determining if the pre established goals are achieved. Further
more different areas in the company are generating budgeting based on their specific
view of the company (marketing, sales, HR, .. ).
1–5 Why is managerial accounting relevant to business majors and their future careers?
The importance of managerial accounting is not just relevant to business majors along
their/our career but it is crucial to make it successful and sustainable. Does not really
matter in which segment/department of the company we will be working on, does not
even matter the size of it because anyway we can look at it we will be dealing with
managerial accounting. The book’s author breaks the first chapter in planning, controlling
and decision making and in exhibit 1-3 there is a good summary of questions that
students from different majors should ask themselves in pursuing their careers. If I can
give a more personal answer to this question I would start with saying that there is no real
(feasible) project without quantitative information. All business decisions needs to be
made based on conceptual concepts but the actualization of the decision will be sooner or
later evaluated from a quantitative perspective. Again you can produce the best product
ever, or offer the best service, you can deliver great customer experience, you can be king
in your market and have the larger market share, etc. But if your number will not look
good, if your cost are to high, if your products are too cheap, if your people is paid to
much, if you do not pay your taxes right… You will not stay very long in business.
1–7 Pick any large company and describe its strategy using the framework in the chapter.
To me this is a great question and I will respond by picking FCA Canada Inc., in detail I
will go through the launch of a new potential project named FCA Digital Program. The
project is oriented to maximize the investments that the FCA brands are allocation to Tier
! and Tier II online marketing through the creation of a solid Tier III digital program
