Applying Managerial Accounting Concepts To The Service Industry

Managerial AccountingName:Institutional affiliation:Managerial AccountingManagerial accounting is an accounting process that aims at providing critical information to the management of a company with the aim of attaining the organizational goal (Warren, Reeve & Duchac, 2016). Many accounting professionals also refer managerial accounting as cost accounting. Managerial accounting is quite different from the financial accounting because it is aimed at aiding managers within an organisation to make decision. Therefore, managerial accounting is used within an organisation where as financial accounting provides information to the external stakeholders (such as government, investors, customers) (Warren, Reeve & Duchac, 2016). The essay will critically assess the use of managerial accounting in the service industry.As the market environment becomes competitive, companies in the service industry are constantly looking for strategies to increase their productivity whilst managing their cost (Dopson & Hayes, 2016). While managerial accounting was initially developed to aid companies in the manufacturing sector, it has effectively demonstrated its usefulness in the service industry. Managerial accounting has continued to assist the managers in the service sector to effectively manage their cost while improving their performance through