Cost Chapter 1The manager and Management Accounting – Flashcards

measures, analyzes, and reports financial and nonfinancial information that helps managers make decisions to fulfill the goals of an organization. It focuses on internal reporting and is not restricted by generally accepted accounting principles (GAAP). Other: a) emphasizes the future (not the past) b) influences the behavior of managers and other employees (rather than primarily reporting economic events). *can include assets or liabilities (such as "brand names" developed internally) not recognized under GAAP *can use asset or liability measurement rules (such as present values or resale prices) not permitted under GAAP. *not restricted under GAAP principles. *allows managers to charge interest on owners' capital to help judge a division's performance, even though such a charge is not allowed under GAAP

focuses on reporting to external parties such as investors, government agencies, and banks. It measures and records business transactions and provides financial statements that are based on generally accepted accounting principles (GAAP).

A) can help to formulate strategy by providing information about the sources of competitive advantage—for example, the cost, productivity, or efficiency advantage of their company relative to competitors or the premium prices a company can charge relative to the costs of adding features that make its products or services distinctive. B) can help improve QUALITY and achieve TIMELY product deliveries by recording and reporting an organization's current quality and timeliness levels and by analyzing and evaluating the costs and benefits—both financial and nonfinancial—of new quality initiatives, such as TQM, relieving bottleneck constraints, or providing faster customer service.

Research and development, Design of products and processes, Production, Marketing, Distribution

generating and experimenting with ideas related to new products, services, or processes.

the detailed planning, engineering, and testing of products and processes.

procuring, transporting, storing, and assembling resources to produce a product or deliver a service.

promoting and selling products or services to customers or prospective customers.

processing orders and shipping products or services to customers.

providing after-sales service to customers.

describes the flow of goods, services, and information from the initial sources of materials and services to the delivery of products to consumers, regardless of whether those activities occur in the same organization or in other organizations.

is most effective when it integrates and coordinates activities across all companies in the supply chain as well as across each business function in an individual company's value chain. Attempts are made to restructure all cost areas to be more cost-effective.

This statement is misleading at best, and wrong at worst. Management accounting MEASURE, ANALYZE, and REPORTS FINANCIAL and NONFINANCIAL information that helps managers define the organization's goals and make decisions to fulfill those goals. Also, also ANALYZES REVENUE from products and customers in order to assess product and customer profitability. Therefore, while management accounting does use cost information, it is only a part of the organization's information recorded and analyzed by management accountants.

(1) identify the problem and uncertainties; (2) obtain information; (3) make predictions about the future; (4) make decisions by choosing among alternatives; and (5) implement the decision, evaluate performance, and learn.

focus on selecting organization goals and strategies, predicting results under various alternative ways of achieving those goals, deciding how to attain the desired goals, and communicating the goals and how to attain them to the entire organization.

1. Employ a cost-benefit approach. 2. Recognize technical and behavioral considerations. 3. Apply the notion of "different costs for different purposes."

1) understanding the strategy of an organization 2) people skills, (motivating other team members) 3) technical skills, (computer knowledge, calculating costs of products, and supporting planning and control decisions)