managerial cost Accounting , Slides of Cost Accounting

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Chapter 1

(Text book: Cost Accounting, 12th^ ed.)

The Accountant’s Role in the

Organization

Accounting Disciplines

• (^) Financial Accounting: focus on external users and GAAP rules
• (^) Managerial Accounting: focus on internal users and is not necessarily GAAP-driven. Also provides data that helps managers make decisions to fulfill the goals of the organization
• (^) Cost Accounting: measures, analyzes, and reports financial and nonfinancial information relating to the cost of acquiring or using resources in an organization.

Management Accounting and Value

• (^) Creating value is an important part of planning and implementing strategy
• (^) Value is the usefulness a customer gains from a company’s product or service
• (^) Value Chain is the sequence of business functions in which customer usefulness is added to products or services

Key Success Factors

• (^) The dimensions of performance that customers expect, and that are key to the success of a company include: - (^) Cost and efficiency - (^) Quality - (^) Time - (^) Innovation

Management Accounting Roles

• (^) Problem Solver:
  • (^) Of the several alternatives available, which is the best?
• (^) Scorekeeper:
  • (^) How are we doing?
• (^) Attention Director:
  • (^) What opportunities and problems should managers focus on?

Management Accounting Guidelines

• (^) Cost – benefit approach is commonly used: benefits generally must exceed costs as a basic decision rule
• (^) Behavioral and Technical Considerations – people are involved in decisions, not just dollars and cents
• (^) Different definitions of cost may be used for different applications