Accounting Quantitative Data

Discussion

Anthony , Hawkins and Merchant (2003 ) defined management accounting as the process within an organization that provides information used by an organization that provides information used by an organization 's managers in planning , implementing , and controlling the organization 's activities (p . 494 . One of these organizational activities is the decision to stop the operations of a company division . In JetSet Travel Inc (JTI ) case , it 's the consideration to eliminate the camping equipment department , and use the space to further expand the innovations department . The point in whether JTI 's management

will pursue this decision is based on the impact of the decision on the organization 's profitability

As the consultant hired by JTI to provide analysis and advice which will help the upper management to decide on the fate of the camping equipment department , I will need the following types of accounting quantitative data to evaluate on whether to stop the operations of the said department and expand the innovations department

Projected profitability of the camping equipment department if JTI will continue operating the department instead of using its space for the expansion of the innovations department . This data will be compared to the projected profitability of the expansion of the innovations department . The future profitability of the camping equipment will be something that JTI will forego in case it decides to expand the innovations department

Projected profitability of the expansion of the innovations department This data will be compared with the historical income statement of the camping equipment department . The comparison will determine whether the decision to drop the camping equipment department , and use the space for the expansion of the innovations department will increase the profitability of JTI as a whole

Other revenues to be realized . For example the current disposal value of office equipment and machine related to the camping equipment department . This accounting quantitative information is needed because it is relevant revenue

Expected costs of new machines and office equipment to be purchased and to be used for the expansion of the innovations department . This cost is relevant because it is an expected future cost that will be incurred if JTI management decides to discontinue the camping equipment department and expand the innovations department

In conclusion , all the accounting information I will need are all relevant . Relevant costs are defined by Horngren , Datar and Foster (2002 ) as the expected future costs (p . 370 ) and relevant revenues are expected future revenues (p . 370 . Both the relevant costs and revenues differ among the alternatives which in this case are to discontinue or not to discontinue the camping equipment department . In the end , no matter what type of accounting quantitative information JTI 's management needs to make the final decision , what matters is that they refer back to the company 's strategic plans . As Horngren , Datar and Foster (2002 ) said [the] key to a company 's success is creating value for customer while differentiating itself from its competitors (pp 3-4 . The decision to discontinue the camping equipment department...