Professional Documents
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Managerial Accounting & The Business Organization
Managerial Accounting & The Business Organization
©2002 Prentice Hall Business Publishing, Introduction to Management Accounting 12/e, Horngren/Sundem/Stratton 1-1
Objective 1
©2002 Prentice Hall Business Publishing, Introduction to Management Accounting 12/e, Horngren/Sundem/Stratton 1-2
Users of
Accounting Information
Internal managers…
use information for short-term planning
and controlling routine operations.
use information for making
nonroutine decisions and formulating
overall policies and long-range plans.
©2002 Prentice Hall Business Publishing, Introduction to Management Accounting 12/e, Horngren/Sundem/Stratton 1-3
Users of
Accounting Information
©2002 Prentice Hall Business Publishing, Introduction to Management Accounting 12/e, Horngren/Sundem/Stratton 1-4
Management Accounting
©2002 Prentice Hall Business Publishing, Introduction to Management Accounting 12/e, Horngren/Sundem/Stratton 1-5
Financial Accounting
©2002 Prentice Hall Business Publishing, Introduction to Management Accounting 12/e, Horngren/Sundem/Stratton 1-6
Uses of
Accounting Information
©2002 Prentice Hall Business Publishing, Introduction to Management Accounting 12/e, Horngren/Sundem/Stratton 1-7
Accounting Systems
©2002 Prentice Hall Business Publishing, Introduction to Management Accounting 12/e, Horngren/Sundem/Stratton 1-8
Accounting Systems
©2002 Prentice Hall Business Publishing, Introduction to Management Accounting 12/e, Horngren/Sundem/Stratton 1-9
Service Organizations
Labor is intensive.
©2002 Prentice Hall Business Publishing, Introduction to Management Accounting 12/e, Horngren/Sundem/Stratton 1 - 10
Objective 2
©2002 Prentice Hall Business Publishing, Introduction to Management Accounting 12/e, Horngren/Sundem/Stratton 1 - 11
Accounting System
Costs and Benefits
Benefits Costs
Obtain
Benefits > Costs
system
Seek
Benefits < Costs
alternatives
©2002 Prentice Hall Business Publishing, Introduction to Management Accounting 12/e, Horngren/Sundem/Stratton 1 - 12
Accounting System
Costs and Benefits
The accounting system’s effect on the
behavior (decisions) of managers should
be considered.
If the system fails to provide information
that is timely or in a useful format, there
will be a lack of acceptance by users.
©2002 Prentice Hall Business Publishing, Introduction to Management Accounting 12/e, Horngren/Sundem/Stratton 1 - 13
Objective 3
©2002 Prentice Hall Business Publishing, Introduction to Management Accounting 12/e, Horngren/Sundem/Stratton 1 - 14
Planning and Controlling
©2002 Prentice Hall Business Publishing, Introduction to Management Accounting 12/e, Horngren/Sundem/Stratton 1 - 15
Planning and Controlling
The Management Process Internal Accounting System
Competitor
Productivity analysis
Financial
Accounting Advertising
System impact
New items
Controlling report
•Actions Performance
Reports
•Evaluations
©2002 Prentice Hall Business Publishing, Introduction to Management Accounting 12/e, Horngren/Sundem/Stratton 1 - 16
Role of Budgets
A budget is a quantitative expression of a
plan of action and is an aid to coordinating
and implementing the plan.
Budgets are the chief devices for
compelling and disciplining management
planning.
©2002 Prentice Hall Business Publishing, Introduction to Management Accounting 12/e, Horngren/Sundem/Stratton 1 - 17
Role of
Performance Reports
©2002 Prentice Hall Business Publishing, Introduction to Management Accounting 12/e, Horngren/Sundem/Stratton 1 - 18
Performance Report
©2002 Prentice Hall Business Publishing, Introduction to Management Accounting 12/e, Horngren/Sundem/Stratton 1 - 19
Objective 4
©2002 Prentice Hall Business Publishing, Introduction to Management Accounting 12/e, Horngren/Sundem/Stratton 1 - 20
Product Life Cycle
Product Introduction
Development to Market
Mature Product
Market Phase-out
©2002 Prentice Hall Business Publishing, Introduction to Management Accounting 12/e, Horngren/Sundem/Stratton 1 - 21
Value Chain
Research and
Design Production
Development
Customer
Marketing Distribution
Service
©2002 Prentice Hall Business Publishing, Introduction to Management Accounting 12/e, Horngren/Sundem/Stratton 1 - 22
Value Chain Functions
©2002 Prentice Hall Business Publishing, Introduction to Management Accounting 12/e, Horngren/Sundem/Stratton 1 - 23
Value Chain Functions
Design…
is the detail and engineering of products.
©2002 Prentice Hall Business Publishing, Introduction to Management Accounting 12/e, Horngren/Sundem/Stratton 1 - 24
Value Chain Functions
Production…
is the coordination and assembly of resources to
produce a product or deliver a service.
©2002 Prentice Hall Business Publishing, Introduction to Management Accounting 12/e, Horngren/Sundem/Stratton 1 - 25
Value Chain Functions
Marketing…
is the manner by which individuals or groups
learn about the value and features
of products or services.
©2002 Prentice Hall Business Publishing, Introduction to Management Accounting 12/e, Horngren/Sundem/Stratton 1 - 26
Value Chain Functions
Distribution…
is the mechanism by which products or
services are delivered to the customer.
©2002 Prentice Hall Business Publishing, Introduction to Management Accounting 12/e, Horngren/Sundem/Stratton 1 - 27
Value Chain Functions
Customer service…
is the support activities provided to the customer.
©2002 Prentice Hall Business Publishing, Introduction to Management Accounting 12/e, Horngren/Sundem/Stratton 1 - 28
Objective 5
©2002 Prentice Hall Business Publishing, Introduction to Management Accounting 12/e, Horngren/Sundem/Stratton 1 - 29
Authority and Responsibility
©2002 Prentice Hall Business Publishing, Introduction to Management Accounting 12/e, Horngren/Sundem/Stratton 1 - 30
Organization Chart
Controller
General Internal
Taxes
Accounting Audit
©2002 Prentice Hall Business Publishing, Introduction to Management Accounting 12/e, Horngren/Sundem/Stratton 1 - 31
Functions of the Controller
1 Planning for control
2 Reporting and interpreting
3 Evaluating and consulting
4 Tax administration
5 Government reporting
6 Protection of assets
7 Economic appraisal
©2002 Prentice Hall Business Publishing, Introduction to Management Accounting 12/e, Horngren/Sundem/Stratton 1 - 32
Functions of the Treasurer
1 Provision of capital
2 Investor relations
3 Short-term financing
4 Banking and custody
5 Credits and collections
6 Investments
7 Risk management (insurance)
©2002 Prentice Hall Business Publishing, Introduction to Management Accounting 12/e, Horngren/Sundem/Stratton 1 - 33
Objective 6
©2002 Prentice Hall Business Publishing, Introduction to Management Accounting 12/e, Horngren/Sundem/Stratton 1 - 34
Current Management
Accounting Trends
Advances in technology
©2002 Prentice Hall Business Publishing, Introduction to Management Accounting 12/e, Horngren/Sundem/Stratton 1 - 35
Just-in-Time (JIT)
©2002 Prentice Hall Business Publishing, Introduction to Management Accounting 12/e, Horngren/Sundem/Stratton 1 - 36
Computer-Aided Design
(CAD)...
– allows companies to design products that
can be manufactured efficiently.
Even small changes in design often lead to
large manufacturing cost savings.
©2002 Prentice Hall Business Publishing, Introduction to Management Accounting 12/e, Horngren/Sundem/Stratton 1 - 37
Computer-Aided Manufacturing
(CAM)...
– allows computers to direct and control
production equipment.
CAM often leads to a smoother, more
efficient flow of production with fewer
delays.
©2002 Prentice Hall Business Publishing, Introduction to Management Accounting 12/e, Horngren/Sundem/Stratton 1 - 38
Computer-Integrated
Manufacturing (CIM)...
– utilizes both CAD and CAM together with
robots and computer-controlled machines.
The small amount of labor required in this
manufacturing process allows for great
flexibility since changes are made to
computer programs without retraining an
entire workforce.
©2002 Prentice Hall Business Publishing, Introduction to Management Accounting 12/e, Horngren/Sundem/Stratton 1 - 39
Objective 7
Explain a management
accountant’s ethical
responsibilities.
©2002 Prentice Hall Business Publishing, Introduction to Management Accounting 12/e, Horngren/Sundem/Stratton 1 - 40
Standards of
Ethical Conduct
Competence Confidentiality
Integrity Objectivity
©2002 Prentice Hall Business Publishing, Introduction to Management Accounting 12/e, Horngren/Sundem/Stratton 1 - 41
Objective 8
©2002 Prentice Hall Business Publishing, Introduction to Management Accounting 12/e, Horngren/Sundem/Stratton 1 - 42
Vital Role of
Accounting Information
Management accounting plays a vital role
in the achievement of company goals and
objectives.
Management accounting information is
used across the entire value chain of
activities as well as throughout the life
cycle of products and services.
©2002 Prentice Hall Business Publishing, Introduction to Management Accounting 12/e, Horngren/Sundem/Stratton 1 - 43