Introduction to Cost and Management Accounting Notes

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Introduction to Cost and Management Accounting

Lecturer: Nadini Persaud
Contact Information:
Email: nadini.persaud@cavehill.uwi.edu npersaud07@yahoo.com
Office Location: Upstairs Main Library
Tel: 417-4296 (DOMS General Office) 417-4297 (NP Office)

March 2nd 2013 mid-term exam

Contents Decision Making 3 Theory of Constraints 4 IMA Guidelines for Ethical Behavior 4 Competence 4 Confidentiality 5 Integrity 5 Credibility 5 Corporate Social Responsibility 5 Manufacturing Costs: 6 Non-Manufacturing Costs 6 Product Costs vs. Period Costs 6 Prime Costs vs. Conversion Cost 7 The Activity Base (Cost Driver) 7 Fixed Cost and Variable Costs 7 Cost Classifications for Predicting Cost Behavior 7 Mixed Costs 8 The High-Low Method 9 Cost Classification for Decision Making 10 Opportunity Cost 10 Sunk Costs 10 Types of Product Casting Systems 10 Why use an allocation base? 11 Manufacturing Overhead Application 11

Decision Making
Decision making involves making a selection among competing alternatives. * What should we be selling? * Who should we be serving? * How should we execute?
Strategy
Strategy is a game plan that enables a company to attract customers by distinguishing itself from competitors.
Focal point of a company’s strategy should be its target customers.
Customer Intimacy Strategy – Understand and respond to individual customer needs.
Operational Excellence Strategy – Deliver products and services faster, more conveniently and at lower prices.
Product Leadership Strategy - Offer higher quality products.

Enterprise Risk Management
A process used by a company to proactively identify and manage risk.

Lean Production – Just-in-time (JIT) production
Customer orders – create order – generate component requirements - components are ordered – production begins – goods delivered.
Only manufactured when product is ordered.
Theory of Constraints
A

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