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Chapter 1 - Management Accounting

Management involves planning goals and objectives, organizing tasks, directing day-to-day operations, and controlling performance. The functions of management occur at three levels - top management focuses on strategic planning, middle management on functional tasks, and lower management on operational tasks. A controller is responsible for designing accounting systems to collect and report control information to assist management in planning, budgeting, and decision-making, but does not directly control operations.

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40 views

Chapter 1 - Management Accounting

Management involves planning goals and objectives, organizing tasks, directing day-to-day operations, and controlling performance. The functions of management occur at three levels - top management focuses on strategic planning, middle management on functional tasks, and lower management on operational tasks. A controller is responsible for designing accounting systems to collect and report control information to assist management in planning, budgeting, and decision-making, but does not directly control operations.

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jerly
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© © All Rights Reserved
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Download as PPTX, PDF, TXT or read online on Scribd
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Cost

Accounting
Chapter 2
MANAGEMENT

The process of
accomplishing work
through and with
others.
Functions of Management
Planning- involves:
a. Setting long range (goals) and short range (objective) for the
organization
b. Predicting future conditions that are expected to prevail
PLANNING
c.Considering the different means or strategies by which the goals set
may be achieved
d. Deciding which of the strategies should be used to attain such goals.

Organizing-involves identifying, subdividing, grouping, and coordinating


Decision Making
the various activities required to achieve the objectives of the institution.
Directing - involves overseeing the day to day activities, seeing to it that
the organization is functioning smoothly and the members of the
organizations are mobilized to carry out the plans.

CONTROLLING
Controlling- involves checking the performanceORGANIZING andthe
or activities against
DIRECTING
plan or standards and deciding what corrective actions to take should
there be any deviation between the actual and planned performance.
LEVELS OF MANAGEMENT
TOP MANAGEMENTStrategic Planning
Chief Executive Officer,
MIDDLE MANAGEMENT
President, Vice President,
Functional Managers,
General Managers,
LOWER Division
MANAGEMENT
product line managers,
Heads
department heads
Intermediate Planning
Unit managers, first-line
supervisors

Operational Planning
Functions in Management
STAFF
LINE
FUNCTION
FUNCTION

Directly involves with Refers to activities


the production or carried out by the
distribution of the departments which are
company’s primary not directly involved in
product carrying out the basic
objectives of the
organization
DEAN

SECRETARY

FACULTY
ACCOUNTING
The process of identifying,
measuring, and
communicating financial
“The language
and economic information
of business”
to facilitate informed
judgment by users
of information
HOW
DOES
ACCOUNTING
RELATE
TO
MANAGEMENT
?
MANAGEMENT FINANCIAL
ACCOUNTING ACCOUNTING
Users Management accounting defined
Internal Users External Users
Purpose Provide information in Provide information about
carrying out management the financial position and
functions results of operation
Types of Different types of reports Financial statements and
reports depending on the specific the accompanying notes
need s of management
Standards of Management of the Reports are prepared in
reports company can set rules to accordance with GAAP
produce the most relevant and other
information for its specific pronouncements of
needs authoritative accounting
bodies.
Reporting Reports are segmentized Reports relate to the
entity business as a whole
Period covered May cover any time period Usually cover a year, qtr or
month
RELATIONSHIP OF MANAGERIAL ACCOUNTING,
FINANCIAL ACCOUNTING AND COST
ACCOUNTING.

MANAGERIAL FINANCIAL
ACCOUNTING ACCOUNTING

COST
ACCOUNTING
USES OF COST
ACCOUNTING
INFORMATION

MANAGEMENT
FINANCIAL COST ACCOUNTING
ACCOUNTING ACCOUNTING
(For special
(For inventory (Product cost reports to
costing information) management
purposes in the for decision
financial making
statements) purposes)
Planning and Controlling Cycle
GOALS Planning gap/ Variance - the
difference between actual cost and
standard cost. It may be normal or
exceptional.
OBJECTIVES

PLANS BUDGETS

ACTIONS REVISIONS

RESULTS FEEDBACKS STANDARDS


Objectives of Management accounting information

• Profit measurement
• Guide for planning
• Standards for controlling
• Basis for decision making
Traditionally, a management accountant is
called a controller.

Sometimes he is called the Chief Financial


Officer, Accounting Manager, Budget
Director, Chief Information Officer or
Systems Administrator.
Controller
is the chief management accounting
executive of an organization who is
responsible for the accounting aspects
of
management planning and control.
DOES CONTROLLER
CONTROL OPERATIONS????
ORGANIZATIONAL CHART
Controllership Treasurership
Planning and control Provisions of capital
Reporting and interpreting Investor relations
Evaluating and consulting Short Term financing
Tax administration Banking and custody
Protection of assets Investments
Economic appraisal Insurance

Controllership- deals with records, systems and processes to


attain the objectives of internal controls and good managing

Treasurership- deals with money, cash, or wealth of the


organization
What is the Controller’s role in the
organization?
Controller do not make decisions for the management
but only provide technical assistance.
It can be deduced that the controller in the
organization as a whole is the one responsible for
designing and operating a system through which
control information is collected and reported and
not control the operations.
However, he may have control exercises but only to
the extent of his own department.
QUESTION 1 QUESTION 6
QUESTION 2 QUESTION 7
QUESTION 3 QUESTION 8
QUESTION 4 QUESTION 9
QUESTION 5 QUESTION 10
QUESTION 11 QUESTION 16
QUESTION 12 QUESTION 17
QUESTION 13 QUESTION 18
QUESTION 14 QUESTION 19
QUESTION 15 QUESTION 20
QUESTION 21 QUESTION 26
QUESTION 22 QUESTION 27
QUESTION 23 QUESTION 28
QUESTION 24
QUESTION 25

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