An Introduction to Managerial Accounting and Cost Concepts

Satisfactory Essays
1-1

Chapter 1

An Introduction to Managerial Accounting and Cost Concepts

Introduction to Managerial Accounting

MSc. Mohammad Hicham Khalil

Objectives
1. Comparison of Financial and Managerial 2. 3. 4. 5. 6. 7. 8.

Accounting. General Cost Classifications. Product Cost versus Period Cost. Cost Classifications on Financial Statements. Cost Classifications for Predicting Cost Behavior. Cost Classification for Assigning Costs to Cost Objectives. Cost Classification for Decision Making. Review Problems
MSc. Mohammad Hicham Khalil

Introduction to Managerial Accounting

1-2

Learning Objective 1

Comparison of Financial and Managerial Accounting

Introduction to Managerial Accounting

MSc. Mohammad Hicham Khalil

Comparison of Financial and Managerial Accounting
Managerial Accounting: is concerned with providing information to p g managers (people inside an organization) who direct and control its operations. Financial Accounting: is concerned with providing information to stockholders, creditors and other who are outside an organization.

Introduction to Managerial Accounting

MSc. Mohammad Hicham Khalil

1-3

Comparison of Financial and Managerial Accounting
Financial Accounting
1. Users 2. Time focus 3. Verifiability versus relevance 4. Precision versus timeliness 5. 5 Subject 6. GAAP 7. Requirement External persons who make financial decisions Historical perspective Emphasis on verifiability Emphasis on precision Primary focus is on the whole organization Must follow GAAP and prescribed formats Mandatory for external reports

Managerial Accounting
Managers who plan for and control an organization Future emphasis Emphasis on relevance for planning and control Emphasis on timeliness Focuses on segments of an organization Need not follow GAAP or any prescribed format Not Mandatory
MSc. Mohammad Hicham Khalil

Introduction to Managerial Accounting

Learning Objective 2

General Cost Classifications

Introduction

You May Also Find These Documents Helpful

  • Powerful Essays

    Managerial and Cost Accounting

    • 42603 Words
    • 171 Pages

    MANAGERIAL AND COST ACCOUNTING LARRY M. WALTHER & CHRISTOPHER J. SKOUSEN DOWNLOAD FREE TEXT BOOKS AT BOOKBOON.COM Managerial and Cost Accounting © 2009 Larry M. Walther, under nonexclusive license to Christopher J. Skousen & Ventus Publishing ApS. All material in this publication is copyrighted, and the exclusive property of Larry M. Walther or his licensors (all rights reserved). ISBN 978-87-7681-491-5 Download free books at BookBooN.com 2 Managerial and Cost Accounting…

    • 42603 Words
    • 171 Pages
    Powerful Essays
  • Satisfactory Essays

    Question 1 Product costs are costs that are associated with manufactured goods until the time period during which products are sold. It involved all costs in acquiring or making a product. These costs consist of direct materials, direct labour and manufacturing overhead. Product costs are initially assigned to an inventory account on the balance sheet. When the goods are sold, the costs are released from inventory as expenses and matched against sales revenue. Since product costs are initially assigned…

    • 844 Words
    • 4 Pages
    Satisfactory Essays
  • Satisfactory Essays

    Introduction to Managerial Accounting For this case assignment I am to explain the responsibilities of the management accountant for security and financial integrity in an organization. I will also explain the relationship between management accountants and financial accounts and if I foresee an expanding role for management accounting in organizations. Management accountants work within a specific company. They perform many different tasks to ensure their company’s financial security by handling…

    • 474 Words
    • 2 Pages
    Satisfactory Essays
  • Better Essays

    Unit 1 Introduction to Managerial Accounting Stephanie Curry Kristina Unutoa American InterContinental University 03/31/2013 Abstract In this report we will be going over the objectives and characteristics of an internal accounting system, the importance of accounting information to the company, and the ethics in business and the managing accountant’s role. “HOW THE INTERNAL ACCOUTNING SYSTEM WORKS ON THE INSIDE” Introduction: The managerial accounting system is developed to give data…

    • 1283 Words
    • 6 Pages
    Better Essays
  • Satisfactory Essays

    Chapter 1—Introduction to Managerial Accounting TRUE/FALSE 1. Management accounting information is only used by manufacturing organizations. ANS: F PTS: 1 DIF: Difficulty: Easy OBJ: LO: 1-1 NAT: BUSPROG: Analytic STA: AICPA: BB-Industry | IMA: Business Applications | ACBSP: APC-25-Managerial Characteristics/Terminology KEY: Bloom's: Knowledge NOT: 1 min. 2. The managerial activity of monitoring a plan's implementation and taking corrective action as needed is referred to as decision making…

    • 4439 Words
    • 25 Pages
    Satisfactory Essays
  • Good Essays

    COST CONCEPTS AND COST ACCOUNTING By: Aman Jawahar Sarika Deepak Muneer CONTENTS         Concept of Cost Cost Accounting Terms in Cost Accounting Elements of Cost Meaning of Overheads Classification of Costs Methods of Costing Types of Costing MEANING: Cost Concept: The term ‘cost’ means the amount of expenses [actual or notional] incurred on or attributable to specified thing or activity. Cost means ‘the price paid for something’. Cost Accounting: Cost Accounting is concerned with recording…

    • 1820 Words
    • 10 Pages
    Good Essays
  • Satisfactory Essays

    Chapter 16 Managerial accounting concepts and principles 1) Direct costs are identified with and can be traced to a cost object. Indirect costs cannot be identified with or traced to a cost object. 2) Costs by function: A) Product costs consist of manufacturing costs: direct materials, direct labor and factory overhead. B) Period costs consist of selling and administrative expenses. 3) A) Prime costs which consist of direct materials and direct labor costs. B) Conversion costs which consist…

    • 1035 Words
    • 5 Pages
    Satisfactory Essays
  • Powerful Essays

    Managerial Accounting Analysis of Concepts and Techniques Managerial Accounting BUS 630 Managerial Accounting Analysis of Concepts and Techniques Introduction/Thesis Statement Managerial accounting is a concept used in businesses to manage internal systems. Understanding the importance of effective decision making, planning and control creates a foundation for value within the company on a more in depth level. Planning and controlling is measured by performance based on budgeting accounts…

    • 4213 Words
    • 17 Pages
    Powerful Essays
  • Satisfactory Essays

    40 a- Cost of goods manufactured = Direct cost + Indirect cost = [Direct Cost of Material + Direct Cost of Labor] + [Indirect Cost of Material + Indirect Cost of Labor + Utilities Overhead] = Total Cost of Material + Total Cost of Labor + Utilities Overhead = 120,000 + 90,000 + 40,000 = $ 250,000 b- Total Cost of Operation = Cost of goods manufactured + Selling, General admin. and expenses. = 250,000 + 60,000 = $ 310,000 c- Prime Cost =Direct Material Cost + Direct Labor…

    • 818 Words
    • 4 Pages
    Satisfactory Essays
  • Good Essays

    Cost Concepts Semester II Basic Terms • Cost is the amount of expenditure, actual (incurred) or notional (attributable), relating to a specific thing or activity. The specific thing or activity may be a product, job, service, process or any other activity • Expenses are expired costs, incurred and totally used up in generation of revenue • Loss is lost cost. The term ‘loss’ is used to describe mainly two accounting events. In traditional financial accounting it is used to denote a situation…

    • 1535 Words
    • 7 Pages
    Good Essays