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Managerial Accounting Essay

To Mr. George Friedman and Bill Compton, here are some options on ways to operate base of household incomes. Below are various ways to decide which might best fit in your organization. “Managerial skills are important in an organization and in leadership, especially managerial decision making. These help achieve the goals of the organization and harness the potential of everyone inside the organization” (Managerial Skills, n.d).

The fee for food is $1.25 per student each day. Staff will received a 10% benefit on their salaries in addition $200 for the benefit programs. Variable supplies are $1 per student each month. Step costs are salaries for instructors, averaging $1,600 per instructor for each class. “As opposed to fixed costs, which remain constant, these costs arise in direct proportion toa business output, increasing and decreasing along with the volume of production” (Schneider, 2012).

Experiencing a new class added would be beneficial due to the profits increased by $355. Whatever case of profit adding to the revenue helps Friedman and Compton childcare center. “A business can have higher revenue, but if the costs are higher, it will show no profit and is destined to go out of business when available capital runs out. Managing costs and revenue to maximize profit is key for any entrepreneur” (Davidson, n.d).

If the tuition remains the same the infant care class will be taking, the division would contribute $615 to net income. According to Lynch & Williamson, understanding what makes a profit is important (Lynch, Williamson, 1984, para 2). Although the school may be having some problem with increasing revenue, however, containing the new infant class could assist with the cash flow problem.


Davidson, E. (n.d). What are cost, Revenue and Profit Important? retrieved website http://smallbusiness.chron.com/cost-revenue-profit-important-11952.html

Lynch, R. & Williamson R. (1984).Accounting for Management, Planning, and Control, Tata Mc-Graw Hill Publishing Co, New-Dehli Managerial Skills (n.d) Decision Making Critical for Managers retrieved website http://www.managerialskills.org/managerial-skills-decision-making/

Schneider, A. (2012). Managerial Accounting: Decision Making for the Service and Manufacturing sectors. San Diego. CA, Bridgepoint Education.

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