Chapter 1 - The Manager and Management Accounting

Only available on StudyMode
  • Download(s) : 383
  • Published : April 17, 2015
Open Document
Text Preview
The Manager and Management
Accounting

Copyright © 2015 Pearson Education, Inc. All Rights Reserved

1.
2.

3.

Distinguish financial accounting from
management accounting
Understand how management
accountants help firms make strategic
decisions
Describe the set of business functions
in the value chain and identify the
dimensions of performance that
customers are expecting of companies

Copyright © 2015 Pearson Education, Inc. All Rights Reserved.

1-2

4.

5.

6.

7.

Explain the five-step decision-making
process and its role in management
accounting
Describe three guidelines
management accountants follow in
supporting managers
Understand how management
accounting fits into an organization’s
structure
Understand what professional ethics
mean to management accountants
Copyright © 2015 Pearson Education, Inc. All Rights Reserved.

1-3



Management accounting—measures,
analyzes, and reports financial and
nonfinancial information to help
managers make decisions to fulfill
organizational goals. Management
accounting need not be GAAP compliant.



Financial accounting—focuses on
reporting to external users including
investors, creditors, banks, suppliers,
and governmental agencies. Financial
statements must be based on GAAP.
Copyright © 2015 Pearson Education, Inc. All Rights Reserved.

1-4



Cost accounting – measures, analyzes
and reports financial and nonfinancial
information related to the costs of
acquiring or using resources in an
organization.



Today, most accounting professionals
take the position that cost information is
part of management accounting;
therefore, the distinction between the
two is not clear-cut and in this book, we
often use the terms interchangeably.
Copyright © 2015 Pearson Education, Inc. All Rights Reserved.

1-5

Copyright © 2015 Pearson Education, Inc. All Rights Reserved.

1-6





Strategy specifies how an organization
matches its own capabilities with the
opportunities in the marketplace.
There are two broad strategies: cost
leadership or product differentiation
Strategic cost management—describes
cost management that specifically focuses
on strategic issues.

Copyright © 2015 Pearson Education, Inc. All Rights Reserved.

1-7

Management accounting helps answer important
questions such as:
 Who

are our most important customers, and how
can we be competitive and deliver value to them?
 What substitute products exist in the marketplace,
and how do they differ from our own?
 What is our most critical capability?
 Will adequate cash be available to fund the strategy
or will additional funds need to be raised?

Copyright © 2015 Pearson Education, Inc. All Rights Reserved.

1-8





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. The entire customer
experience determines the value a
customer derives from a product.

Copyright © 2015 Pearson Education, Inc. All Rights Reserved.

1-9





The Value chain is the sequence of
business functions in which a
product is made progressively more
useful to customers.
The Value chain consists of:
1.
2.
3.
4.
5.
6.

Research & development
Design of Products and Processes
Production
Marketing
Distribution
Customer service
Copyright © 2015 Pearson Education, Inc. All Rights Reserved.

1-10

Copyright © 2015 Pearson Education, Inc. All Rights Reserved.

1-11

Copyright © 2015 Pearson Education, Inc. All Rights Reserved.

1-12







Production and Distribution are the parts
of the value chain associated with
producing and delivering a product or
service.
These two functions together are known
as the Supply-Chain
The supply chain describes the flow of
goods, services and information from the
initial sources of materials, services, and
information...
tracking img