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Managerial Accounting by James Jiambalvo
Managerial Accounting by James Jiambalvo
Managerial Accounting by James Jiambalvo
by James Jiambalvo
Chapter 1:
Introduction to Managerial
Accounting
Slides Prepared by:
Scott Peterson
Northern State University
Chapter 1: Introduction to
Managerial Accounting
Chapter Themes:
Its all about using
information to plan,
control and make
decisions.
Accountants produce
information and managers
use information.
Learning Objectives:
1.
2.
3.
4.
5.
6.
7.
2.
3.
4.
5.
6.
7.
Planning
Planning has to do with
budgeting in a managerial
context. It is in this way that a
companys goals are
communicated to all
employees.
2.
3.
4.
5.
6.
7.
Controlling
The notion of managerial control
has to do with measuring and
evaluating the performance of
both the manager and the
operation(s) for which the
manager is responsible.
2.
3.
4.
5.
6.
7.
Decision Making
An integral part of the
planning and controlling
process, decision making
includes both rewarding or
punishing managers for their
performance AND dropping,
adding or otherwise changing
some aspect of operations
going forward.
2.
3.
4.
5.
6.
7.
A Comparison of Managerial
and Financial Accounting
Managerial accounting:
1.
Is meant primarily for
internal users while
financial accounting is
meant for external users.
2.
Is not driven by GAAP.
3.
May be much more
detailed than financial
(external) accounting
reports.
4.
May include much
nonfinancial data.
5.
Is forward looking rather
than retrospective.
2.
3.
4.
5.
6.
7.
2.
3.
4.
5.
6.
7.
Cost Terms
The term cost appears in
many contexts and carries a
number of meanings.
3.
1.
2.
4.
5.
6.
7.
2.
3.
4.
5.
6.
7.
Sunk Costs
Sometimes called past
costs. These costs are NOT
relevant to the decision
making process.
2.
3.
4.
5.
6.
7.
Opportunity Costs
These are the values of
potential benefits foregone
when a decision is made.
2.
3.
4.
5.
6.
7.
2.
3.
4.
5.
6.
7.
Controllable and
Noncontrollable Costs
Yet another way to slice and dice
costs. This time it has to do with
the degree of influence a
manager has over the cost. If a
management decision can
impact the cost in the short term,
it is considered controllable.
Conversely, if a manager cannot
influence (control) the cost in the
short term, then it is
noncontrollable. A managers
performance should NOT include
an assessment of
noncontrollable costs.
2.
3.
4.
5.
6.
7.
1.
2.
2.
3.
4.
5.
6.
7.
2.
3.
4.
5.
6.
7.
2.
3.
4.
5.
6.
7.
2.
3.
4.
5.
6.
7.
Copyright
2001 John Wiley & Sons, Inc. All rights reserved. Reproduction or
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