Managerial Economics And Accounting
Managerial economics is also closely related to accounting, which is concerned with recording the financial operations of a business firm. In fact, a managerial economist depends chiefly on the accounting information as an important source of data required for his decision-making purpose. for instance, the profit and loss statement of a firm shows how well the firm has done and whether the information it contains can be used by managerial economist to throw significant light on the future course of action that is whether the firm should improve its productivity or close down. Therefore, accounting data require careful interpretation, reconstruction and adjustments before they can be used safely and effectively. It is in this context that the link between management accounting and managerial economics deserves special mention. The main task of management accounting is to provide the sort of data, which managers need if they are to apply the ideas of managerial economics to solve business problems correctly. The accounting data should be provided in such a form that they fit easily into the concepts and analysis of managerial economics.