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The document discusses managerial accounting and its objectives, distinguishing it from financial accounting. It covers topics like just-in-time inventory techniques, break even analysis assumptions, and how managerial accounting helps with planning and controlling activities. Short notes are also provided on process re-engineering, total quality management, and just-in-time inventory.

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27 views

Acc

The document discusses managerial accounting and its objectives, distinguishing it from financial accounting. It covers topics like just-in-time inventory techniques, break even analysis assumptions, and how managerial accounting helps with planning and controlling activities. Short notes are also provided on process re-engineering, total quality management, and just-in-time inventory.

Uploaded by

gulmstf
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Managerial Accounting and the

business environment
Guideline By
Mohammad Nurul Amin (Niladro)
Lecturer, IIUC.
What is management
accounting
The process of preparing management reports and
accounts that provide accurate and timely financial and
statistical information required by managers to make
day to day and short term decisions.
Objectives of Management
Accounting
 Assistance in Planning and Formulation of Future
Policies
 Helps in the Interpretation of Financial Information
 Helps in Controlling Performance
 Helps in Organizing
 Helps in the Solution of Strategic Business Problems
 Helps in Coordinating Operations
 Helps in Motivating Employees
 Communicating Up-to-date Information
Distinguish between management
accounting and financial
accounting
Basis Management Financial Accounting
Accounting
Meaning Management accounting Financial accounting is
system is an system an accounting system that
which provides relevant focuses of preparation of
information to the financial statement of an
managers to make organization to provide
policies, plans and the financial information
strategies for running the to the interested parties.
business effectively.
Compulsory No Yes
Distinguish between management
accounting and financial
accounting
Basis Management Financial Accounting
Accounting

Information Monetary and Non- Monetary information


Monetary information. only.
Objectives To assist the management To provide financial
in planning and decision information to outsiders.
making process by
providing detail
information on various
matters.
Users Only internal Internal and external
management parties.
Benefits of JIT
 Lower Warehouse Costs
Storing excess inventory can cost a lot of money, and reducing the amount of
inventory you keep on hand can reduce your carrying costs as well.
 Better Supply Chain Management
The just-in-time inventory model can also help companies be more efficient
and competitive in the way they handle their supply chains and use their parts
to assemble products for their customers.
 Better Customer Satisfaction
Implementing the just-in-time inventory management model can allow
companies to serve their customers faster and more efficiently
 Less Waste
When companies use the traditional method of inventory management and
control, they can end up with pallets of unsold items that simply go to waste.
The applicability of JIT technique
 Suppliers
JIT involves reducing the number of vendors and focuses on good
relationships between suppliers.
 Inventories
As mentioned above, JIT aims to reduce the amount of inventories on hand.
 Employee Empowerment
By empowering employees to do multiple functions / “jobs” within the
business, this allows for fewer employees as well as more flexible employees
being able to perform multiple tasks.
 Quality Production
By making quality a top priority, JIT aims to make sure all suppliers,
processes and personnel are of the highest quality therefore eliminating the
chances of quality control issues.
What are the assumptions of
break even analysis?
 The total costs may be classified into fixed and variable costs. It ignores
semi-variable cost.
 The cost and revenue functions remain linear.
 The price of the product is assumed to be constant.
 The volume of sales and volume of production are equal.
 The fixed costs remain constant over the volume under consideration.
 It assumes constant rate of increase in variable cost.
 It assumes constant technology and no improvement in labur efficiency.
 The price of the product is assumed to be constant.
 The factor price remains unaltered.
 Changes in input prices are ruled out.
How managerial accounting does
help in planning and controlling
activities of a manager?
Managers of most organizations continually plan for the future, and after the
plan is implemented, managers assess whether they achieved their goals.
The two important functions that enables management to continually plan for
the future and assess implementation are called planning and control .Planning
is the process of establishing goals and communicating this goals to
employees of the organizations. The control function is the process of
evaluating whether the organizations plans were implemented effectively.
Short notes
 Process Re-engineering
Business process reengineering (BPR) is the analysis and redesign of
workflows within and between enterprises in order to optimize end-to-end
processes and automate non-value-added tasks.
 Total Quality Management
Total quality management (TQM) describes a management approach to long–
term success through customer satisfaction. In a TQM effort, all members of
an organization participate in improving processes, products, services, and the
culture in which they work.
 JIT
The just-in-time inventory model allows companies to reduce their overhead
expenses while always ensuring that parts are available to manufacture their
products. Many companies, including Dell and McDonald's, use some sort of
just-in-time inventory management to serve their customers better while
lowering the cost of doing business.

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