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Mark P. Holtzman
Mark P. Holtzman, PhD, CPA, is Chair of the Department of Accounting and Taxation at Seton Hall University. He has taught accounting at the college level for 17 years and runs the Accountinator website at www.accountinator.com, which gives practical accounting advice to entrepreneurs.
Articles & Books From Mark P. Holtzman
Cheat Sheet / Updated 02-22-2022
Managerial accounting helps managers and other decision-makers understand how much their products cost, how their companies make money, and how to plan for profits and growth. To use this information, company decision-makers must understand managerial-accounting terms. When planning for the future, they follow a master budgeting process.
Step by Step / Updated 03-27-2016
A wide variety of factors can cause overhead to increase. To gain a better understanding of these factors, managerial accountants use activity-based costing. The assumption that the more direct labor your employees work, the more overhead your company incurs made sense in the days before automation, but today completely automated factories operate with little or no direct labor.
Step by Step / Updated 03-27-2016
A scattergraph helps you visualize the relationship between activity level and total cost. To scattergraph, just follow these steps (with explanations for creating the scattergraph in Microsoft Excel):Set up a table that shows production level and total cost by time period.To prepare a scattergraph, you need basic data about the number of units produced and the total costs per time period.
Step by Step / Updated 03-27-2016
Factories and other companies typically must pay costs that include variable and fixed components, challenging accountants to figure out which camp these costs belong in. These mixed costs typically change with the level of activity, but not proportionately. Therefore, in order to predict cost behavior, you need to split mixed costs into variable and fixed components.
Step by Step / Updated 03-27-2016
Responsibility centers are identifiable segments within a company for which individual managers have accepted authority and accountability. Responsibility centers define exactly what assets and activities each manager is responsible for.
How to classify any given department depends on which aspects of the business the department has authority over.
Step by Step / Updated 03-27-2016
Information about product cost helps managers to set and adjust prices and to decide how to best utilize limited production capacity. Here you use only two credit accounts: Accounts payable (which are moneys owed to suppliers), and Wages payable (moneys owed to employees). To increase one of these credit accounts, credit it to the right.
Step by Step / Updated 03-27-2016
Managers often want to know how much they need to sell in order to break even or in order to earn a target level of profit. To get this information, managers derive something called a break-even point (BE) — the amount of sales necessary to earn zero profit.
Why bother? Because knowing the break-even point helps you set sales targets.
Article / Updated 03-26-2016
Whether you’re starting a new business, launching a new division or a new product line, or simply preparing for the future, you need to develop a strategic plan — your business’s road map to the future. The plan reminds you, your employees, and third parties what you do, how you do it, the customers you do it for, and maybe even how you’ll do it in a superior way.
Article / Updated 03-26-2016
A master budget is a plan created to manage a company's manufacturing and sales activity to meet profit and cash flow goals. Creating a master budget requires careful coordination of several smaller budgets covering all parts of the organization; that way, the master budget is realistic but not complacent.
Th
Article / Updated 03-26-2016
To prepare a master budget, managerial accountants collaborate with managers throughout the organization to develop a realistic plan, in numbers, for what will happen during the next period. The master budget counts on your understanding of cost behavior, the results of capital budgeting, pricing, and other managerial accounting information in order to plan a concrete strategy to meet sales, profit, and cash-flow goals for the coming year.