MANAGEMENT ACCOUNTING

CHAPTER 1:
COST ACCOUNTING:
INFORMATION FOR DECISION MAKING

Teacher: Nguyễn Thành Nam

Class: CĐQT22B
 01 Phan Thị Thanh Hiền

THE
SHEEP 02 Lý Ja Son

MEMBERS 03 Huỳnh Nguyễn Đăng Khoa

04 Nguyễn Thái Hải

 Presentational Diagrams

Value Creation in Organizations Our Framework for Assessing

Cost Accounting Systems

Accounting Systems
Trends in Cost Accounting
Choice: Ethical Issues for throughout the Value Chain
Accountants
 VALUE CREATION IN ORGANIZATIONS

Supply
Chain and
1 4 Distribution
Why start Chain
with Value
Creation?
Using Cost
5 Information to
Increase Value
3 Accounting
Value Chain
and the Value
2 Chain
 Why start with Value Creation?
Measuring the effects of decisions on the value of
organization is one of the fundamental services of cost
accounting. As providers of information (accountants) or
as the users of information (managers), we have to
understand how the information can and will be used to
increase value.

Supply Chain and Distribution Chain

The supply chain and distribution chain are the
parts of the value chain, outside the firm.
The value chain is important because it creates the
value for which the customer is willing to pay.
 Value Chain
Refers to the sequence of business function in
which usefulness is added to the products or services
of an organization
Management accountants provide decision support
for managers in the following six business function:
research and development, design, production,
marketing, distribution, service.
The value chain is the set of activities that
transforms raw resources into the goods and services
end users (households, for example) purchase and
consume.
The value chain comprises activities from research
and development through the production process to
customer service.
Component Example Activities Example costs
Researach and The creation and development of -Research personal.
development ideas related to new products, -Patent applications.
(R&D) services, or processes. -Laboratory facilities.
 
Design The detailed development and -Design center
engineering of products, services, or -Engineering facilities used to
processes. develop and test prototypes.
Production The collection and assembly of -Machines and equipment.
resources to produce a product or -Factory personnel.
deliver a service.
Marketing and The process of informing potential -Advertising.
sales customers about the attributes of -Focus group travel.
products or services that leads to their -Product placement.
sale  
Distribution The process for delivering products or -Trucks.
services to customers. -Fuel.
-Web site creation, hosting, and
maintenance.
Customer service The support activities provided to -Call center personnel.
customers for a product or service. -Returns processing.
-Warranty repairs.
 Accounting and the Value Chain
In cost accounting, as we will see, we need to
understand how the individual stages contribute
to value and how to work with other managers to
improve performance. Although financial
accounting and cost accounting are related, there
are important differences.

Using Cost Information to

Increase Value
depends on whether the information provide
improves manager’s decisions.
 ACCOUTING SYSTEMS
Financial Accounting
Field of accounting that reports financial
position and income according to accounting
rules
Financial accounting systems are
characterized by a set of rules that define how
transactions will be treated
Cost Accounting, GAAP, and IFRS
Accounting for costs is the method that
provides relevant information to decision
maker so that he or she can make the best
decision.
Cost Accounting
Field of accounting that measures, records,
and reports information about costs
Cost accounting information is designed for
managers.
Customers of Cost Accounting
To management, customers are the
most important participants in a
business. Without customers, the
organization loses its ability and its
reason to exist; customers provide
the organization’s focus.
 OUR FRAMEWORK FOR ASSESSING COST
ACCOUNTING SYSTEMS

The Manager’s Job Is to Make Decisions

They produce the product or service and deal with the
customer. The job of managers, however, is more difficult
to describe because it tends to be varied and ambiguous.

Decision Making Requires Information

Accounting systems are important because they are a primary
source of information for managers.
The decisions managers make will be only as good as the
information they have.
Costs for Decision Making
One of the most difficult tasks in calculating the financial
consequences of alternatives One is estimating how costs (or
revenues or assets) among the alternatives will differ
Note that only differential costs and revenues affect the
decision.
 OUR FRAMEWORK FOR ASSESSING COST
ACCOUNTING SYSTEMS

Finding and Eliminating Activities That Don’t Add Value

The concept of considering both the costs and benefits
of a proposal cost-benefit analysis.
Owners Use Cost Information to Evaluate
Managers
It is to provide information, perhaps indirectly through
financial reports, to the owners of the organization
about the performance of the organization and the
manager.
Identifying Strategic Opportunities
Using the value chain and other information about the
costs of activities, companies can identify strategic
advantages is the marketplace.
A company can identify activities that customers value and
which the company can provide at lower cost.
 OUR FRAMEWORK FOR ASSESSING COST
ACCOUNTING SYSTEMS

Costs for Control and Evaluation

Budgeting: financial plan of the revenues and resource
needed to carry out activities and meet financial goals
Budgeting is very important to the financial success of
individuals and organizations
As part of the planning and control process

Different Data for Different Decisions

One principle of cost accounting is that different decisions
often require different cost data. "One size fits all" does not
apply to cost accounting.
TRENDS IN COST ACCOUNTING TRHOUGHOUT THE
VALUE CHAIN

Cost Accounting in Design

An important activity in product development is design.
The design of a product can have a significant impact
on: the cost to manufacture it.

Cost Accounting in Purchasing

Companies now partner with suppliers to increase the
efficiency in the supply chain. performance measures
are being used to evaluate the performance of key
supplier and business partners.
TRENDS IN COST ACCOUNTING TRHOUGHOUT THE
VALUE CHAIN
Cost Accounting in Production
Operations managers and financial accountants use cost
information in the production stage to understand and
report the costs of the multiple products produced. One of
the most important developments in production, associated
with lean manufacturing, is the use of just-in-time (JIT)
methods.
.

Cost Accounting in Marketing

Marketing managers require cost accounting
information to understand the profit-ability of different
customer groups.
TRENDS IN COST ACCOUNTING TRHOUGHOUT THE
VALUE CHAIN

Cost Accounting in Distribution

Cost accountants work with managers to estimate whether
in the firm or to have another firm produce the product or
perform the service
.
Cost Accounting in Customer Service
Many companies have adopted the concept of total
quality management (TQM), which means that the
organization is managed to excel on all dimensions and
the customer ultimately defines quality.
TRENDS IN COST ACCOUNTING TRHOUGHOUT THE
VALUE CHAIN

Enterprise Resource Planning

We have seen how cost accounting is used throughout the
value chain. It is important that the information be
consistent in all components of the chain.
.

Creating Value in the Organization

These trends in the way organizations do business create
exciting times in cost ac- counting and excellent future
opportunities for you to make important contributions to
organizations.
CHOICES: ETHICAL ISSUES FOR ACCOUNTANTS

What makes ethics so important?

Understand ethical issues faced by
accountants and ways to deal with ethical
problems that you face in your career.
Ethical standards exist for management
accountants. These standards are related
to competence, confidentiality, integrity
and objectivity.
 CHOICES: ETHICAL ISSUES FOR ACCOUNTANTS

Ethics
The IMA code of ethics discusses the
steps cost accountants should take when
faced with an ethical conflict. Essentially,
these steps are:

DISCUSS CLARIFY CONSULT

 CHOICES: ETHICAL ISSUES FOR ACCOUNTANTS

The Sarbanes-Oxley act of 2002

and ethics
- The legislation, termed the Sarbanes- Oxley
Act of 2002, has many provisions concern those
in Title III and Title IV that deal with corporate
responsibility and enhanced financial disclosure,
respectively.
- Sarbanes-Oxley is important for managers who
design cost information systems.
Sarbanes-Oxley is a law, ethics is based on
behavior.
 CHOICES: ETHICAL ISSUES FOR ACCOUNTANTS

Cost accounting and other business disciplines

- The legislation, termed the Sarbanes- Oxley Act of
2002, has many provisions concern those in Title III
and Title IV that deal with corporate responsibility
and enhanced financial disclosure, respectively.
- Sarbanes-Oxley is important for managers who
design cost information systems.
- Sarbanes-Oxley is a law, ethics is based on behavior.
QUESTION
QUESTION 1: what is useful information?
( Đâu là thông tin hữu ích)
A. Data

B. Problem

C. Decision Criteria
QUESTION 2: How many characteristics of useful information are there?

A. 3

B. 6

C. 5

D. 4

Timely, high quality, complete, relevant, understandable

QUESTION 3: Choosing the best alternative?

A. Planning

B. Maximize

C. Satisficing (Satisfice)
QUESTION 4: Decision Making ……

A. Each criterion is compared to a standard or ranked on its own merits

B. Each criterion is compared directly to every other criterion

C. The process of choosing a solution from available alternatives.

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THANKS FOR WATCHING