The term “cost estimating” is a general one and applies
in all the previous decision-making categories. You might
conclude that the first category, rationalization, focuses
only on historical costs so doesn’t require cost estimates,
but the impact on resource expenses from adding or
dropping various work-consuming outputs also requires
cost estimates to validate the merit of a proposed
rationalization decision.
Trend No. 3 reveals a major transition from management
accounting for reporting costs and profits to managerial
economics for decision support and analysis that
impact the future.
As you can see, management accounting is experiencing
some interesting shifts. As management accountants,
we need to lead the way in helping our organizations
understand these changes and how we can help with
strategic decision making. SF