The Role of Managerial Accounting in Reducing Packaging Costs at IBM

Managerial Accounting (MA) is composed of processes used by corporate management to derive necessary information to support strategic decision making and optimize the performance of control functions within the firm (My Accounting Course, 2018). In my role at the Engineering Department at IBM, I have relied on some of last semester’s topics in this course to carry out routine tasks more efficiently. Millions of cost savings from the reduced volume of packaging at IBM has resulted from my implementation of several MA topics in my role. My future career ambition is to become a manager at IBM and the use of some MA topics will make me better in that capacity. This is an analysis of the topics that I learned in MA this semester that have empowered me in my current role to champion cost reduction in packaging at IBM and will be influential in attaining my future career goals as a Manager.

Role of MA Topics in my Current Position

Some of the topics that we took in the last semester resonated with my role at the Engineering Department of IBM that allowed me to reduce the overall cost of packaging. Some of these include Job Order Costing and Analysis, Process Costing and Analysis, Activity Based Costing and Analysis, and Cost Behaviour and Cost-Volume-Profit Analysis (Saylor.org., 2018).    

Job Order Costing and Analysis

IBM delivers both customized products and services for specific orders as well as hardware and software for the general IT market. Job Order Costing is a topic in MA that taught me how to cut costs in the packaging of an order of identical products and services, which are probably destined to specific consumers.

Process Costing and Analysis

Also, packaging at IBM is a very fundamental function in the sales and distribution of products to its customers, which has a procedure manual to ensure there is consistency. The primary features of Process Accounting that we learned in Chapter 3 include homogeneous products and services, repetitive operations, high standardization, high production volume, and low product flexibility (Maher, Stickney, & Weil, 2012). These factors were very instrumental in empowering me to lower the overall costs in the process of packaging at IBM in my capacity at the Engineering Department.   

Activity-Based Costing and Analysis

Activity Based Costing and Analysis identifies an activity in the process of conducting a business as a cost center. Packaging is a cost center to any sales and distribution process and this is not any different to IBM. I implemented such knowledge in the process of lowering the per-unit cost of packaging at IBM (Saylor.org. 2018). The knowledge of the allocation of the cost of packaging as a direct or indirect overhead to the overall production cost is also very significant in my role at the Engineering Department at IBM. 

Cost Behaviour and Cost-Volume-Profit Analysis

There are various cost behaviors that define the treatment of various costs in the process of profit creation including Fixed, Variable, Mixed, and Step-Wise Costs among others (Dr. Mehta, 2015). In the process of lowering the overall packaging costs at IBM in my capacity, I separated the Variable Costs from the Mixed and Fixed Costs. This information was relevant for me in identifying those costs that can be reduced by making the process more efficient and those that remain unchanged in the short-run, to be incorporated in the design.

Role of MA Topics in my Career Ambitions – Manager

My future career goal is to be a Manager and the study of the different topics in MA in the last semester will be very instrumental in ensuring that I perform my role effectively. The managers rely on the information that is generated by the various tools of management accounting. In addition to the ones mentioned above, most topics in this course are relevant to the manager’s position including;

Master Budgets and Performance Planning

            Budgets are used to plan the management of the available resources to achieve the overall objectives of the organization. Performance planning is a follow-up to budgeting that compares the actual and the budgeted amounts to determine the variance or measure the performance (Taschner, 2016). Such information is necessary for my future role as the manager in ensuring that resources are allocated to their most optimal use.   

Performance Measurement and Responsibility Accounting

Managers assign responsibilities to different units in their organizations, ranging from individual workers, teams, or departments, with the goal of achieving the corporate objectives. Performance measurement involves appraisal performance, resource allocation, control of operations, and strategy planning (Taschner, 2016). This information is very critical in guaranteeing success in my future position as a manager.

Relevant Costing for Managerial Decisions

            Internal managers are required to make various routine cost management decisions that ensure that processes run smoothly. Some of the decisions include the make or buy, scrap or rework, sell or process further, and segment elimination among others (Dr. Mehta, 2015). The information in Chapter 10 of the module in such decision-making skills in the managerial process is very relevant in my future role.

Conclusion

The information that is generated by Managerial Accounting has been very instrumental in my current role in the engineering department in various ways. The four topics specifically enabled me to lower the overall packaging cost at IBM. In addition, there are three topics in last semester’s coursework that will be very instrumental in my future career ladder as a manager.

References

Dr. Mehta, B.K. (2015). Cost and Management Accounting (Commerce) [Paperback]. Retrieved on 20th

of December 2018 from https://books.google.co.ke/url?client=ca-print-otter_W9R0YB6&format=googleprint&num=0&id=Oxe0DQAAQBAJ&q=http://sahityabhawan.com/index.php%3Froute%3Dproduct/product%26filter_name%3D7136%26product_id%3D1633&usg=AFQjCNEGSPBH8bxP53ZI6T_SjQ-rh2RhTw&source=gbs_buy_r

Maher, M., Stickney, C. P., & Weil, R. L. (2012). Managerial accounting: An introduction to concepts, methods and uses. Mason, Ohio: South-Western/Cengage learning.

My Accounting Course. (2018). What is Management Accounting? Retrieved on 20th of December 2018 from https://www.myaccountingcourse.com/accounting-dictionary/management-accounting

Saylor.org. (2018). BUS105: Managerial Accounting. Retrieved on 20th of December 2018 from https://learn.saylor.org/course/bus105

Taschner, A. (2016). Management and cost accounting. Place of publication not identified: Wiley-Vch.