Module 1 ACCO 018
Module 1 ACCO 018
Managerial Accounting
Organizational Structure
ACCOUNTING
Branches of Accounting
It is an internally-based
This branch of accounting is more accounting that helps managers
focused on the recording of make decisions through the use
business transactions and of economic and financial
preparation of financial information and it is also used to
statements for external users. measure the results of those
decisions.
ACCOUNTING
Objectives
Management Functions
1 Planning 3 Controlling
Decision
2 Directing • Performance Evaluation Making
ORGANIZATIONAL STRUCTURE
Stockholders
Board of
Directors
President/CEO
Classification of Costs
Classification of Costs
Carpenter:
Wood: Direct
Direct Labor
Material
Wood glue,
varnish, nails
and sandpapers: Electricity: QA Inspector:
Indirect Material Other overhead Indirect Labor
MANAGERIAL COST CONCEPTS
Classification of Costs
Classification of Costs
Classification of Costs
Split-off point
Classification of Costs
Classification of Costs
A cost is considered
These are costs that will
relevant if it will affect the
not change the decision of
decision of the manager.
the manager across
For a cost to be relevant it
alternative courses of
must be both future and
actions.
differential.
MANAGERIAL COST CONCEPTS
Classification of Costs
Retain Replace
Price of new - P120,000
equipment
Direct factory costs 640,000 500,000
Indirect factory costs 350,000 350,000
Classification of Costs
Classification of Costs
These are costs that cannot These are costs that can be
be eliminated from the eliminated temporarily from
budget without affecting the budget based on
the operations and/or management’s discretion to
incurring a legal obligation. do so.
MANAGERIAL COST CONCEPTS
Classification of Costs
Classification of Costs
(Pages 7-8)
➢ Activity 1
➢ Activity 2