Managerial Accounting Practices Essay Example | Topics and Well Written Essays - 500 words - 4

Managerial Accounting Practices - Essay ExampleAnother disadvantage of fixed costs is that they eliminate flexibility and happen upon the job of managerial accountants much harder. Variable costs change depending on the level of sales. Also a managerial accountant can find shipway to eliminate or reduce variable costs easier than fixed costs. A costs structure in which variable costs are more prestigious than fixed costs is more likely to stupefy a lower breakeven point. The breakeven point is the amount of sales necessary to cover all expenses.There are many fixed costs in which Claire Corporation is incurring. virtually of the conjunctions fixed costs include building rent, salaries of administration staff, and depreciation of equipment expenses. The companys excogitate of expanding the amount of distribution centers is a move that will definitely increase the companys fixed costs. The overall sales have to increase to justify that strategic choice. If variable costs are re duce it would increase the contribution margin of the company and raise its profitability. The situation of having to liquate merchandise repayable to excess inventory must be remedied immediately. If the company adjust its cost structure geared towards variable costs instead of fixed costs the plan of creating a just in inventory system would bring greater benefits for the company.There are ways for the company to begin the transformation process to contemptible away form unnecessary fixed costs. A fixed I had not mentions that is major problem in the company is maintenance costs of the equipment. Some of these machines are obsolete and should be replaced immediately. Buying new machine would eliminate most of the wastage and unnecessary maintenance costs. I also evaluated the company debt situation. The firm has doubled long term loans that were incurred when the firms credit score was low due to company being a newcomer in the industry. Now our patronage credit rating has gon e up a lot. Refinancing