Cost and Management Accounting Accounting
Cost and Management Accounting Accounting
Course Content
Major theme of course: How to create value through acquiring and using cost information to make better decisions and effectively manage value chain relationships
Introduction Cost concepts and cost-benefit analysis Cost flows and terminology Job order and Process Costing Absorption Costing CVP analysis Short term decision making and relevant cost analysis ABC Costing and Management Standard Costing Budgetary Control
Administrative Matters
Office Hours: Wednesday & Thursday from 4.00 p.m. to 5.00 p.m. No Discussion Hours Grading : Class Participation Quizzes ( Online / In class Surprise quizzes) Midterm examination ( Tentative date Dec.17th ) Final examination ( 2nd January 2012) 5% 20% 35% 40%
Session 1
Cost and Management Accounting An Introduction and Overview
Learning Objectives
Discuss key features of Cost and Management accounting Reflect on who uses cost information and why and how Identify / Discuss the Elements of Cost Become familiar with the Costing Methods, Costing Techniques Use of Cost accounting data for decision making purpose Finally to become Intelligent users of cost accounting information
Every entity keeps three separate sets of accounting records 1. Financial Accounting / Reporting records 2. Management accounting / Cost Accounting records 3. Taxation and other regulatory records
Suppliers
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Customers
Acquire Resources
Process resources
Deliver Product
GAAP
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Plan
Control
Auditors
Financial Statements
Financial Accounting
Statement of Cost and Profit for the period.. Total Product X Product Y Material Wages Other Expenses Total Cost (A) Sales (B) Profit / (Loss) (B A) 75,000 20,000 25,000 120,000 150,000 30,000 40,000 10,000 20,000 70,000 96,000 26,000 12,000 5,000 3,000 20,000 28,000 8,000
Cost
Production cost
Cost of one unit of product or service
Selling ,distribution and administrative expenses are period costs expensed in the period these costs are incurred Flow of costs -- We will discuss this in greater detail later
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Managerial
Continual
Improvement Accounting Information
Analytical Decisions
Effective Strategy formulation and implementation exploits the value chain Information acquired in strategy formulation and implementation includes value driver information and managerial accounting inputs on resource consumption Cost-Benefit Analysis is at the heart of all decision making
Customer
Customer Service
Marketing
POST-MANUFACTURING
Customer profitability management Supplier cost reduction through score-card performance measurement and cost analysis Cost reduction through process improvement Designing for efficient manufacturing
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