The Accountant’s Role?in the Organization Learning Objective 1 Describe how cost accounting supports management accounting and financial accounting Management Accounting It measures and reports financial and nonfinancial information that helps managers make decisions to fulfill the goals of an organization. Financial Accounting Its focus is on reporting to external parties. It measures and records business transactions It provides financial statements based on generally accepted accounting principles. Cost Accounting It provides information for both management accounting and financial accounting. It measures and reports financial and nonfinancial data. Cost Management It describes the activities of managers in planning and control of costs. It includes the continuous reduction of costs It is a key part of general management strategies and their implementation. Learning Objective 2 Understand how management accountants affect strategic decisions. Strategic Cost Management Developing strategy Building resources and capabilities Implementing strategy Strategic Cost Management Building resources and capabilities Current Assets Long-Term Productive Assets Intangible Assets Learning Objective 3 Distinguish between the planning and control decisions of managers. Planning and Controlling Management Decision Management Accounting System Feedback Planning Control Performance Evaluation Budgets Accounting System Performance Reports Planning and Controlling What is planning? Setting goals Predicting results Deciding how to attain goals Planning and Controlling What is control? Deciding and taking actions Deciding on performance evaluation and feedback Planning and Controlling What are budgets? They are quantitative expressions of a proposed plan of action They aid in the coordination and implementation of the plan. Planning and Controlling What are performance reports? These are reports that compare actual results with budgeted amounts Performance Report Example Boone Shop, July 2003 Budget Actual Variance Revenues $59,000 $60,000 $1,000 F Cost of goods sold 42,000 43,400 1,400 U Wages 6,700 7,000 300 U General 1,300 900 400 F Fixed costs 5,000 5,000 0 Operating income $ 4,000 $ 3,700 $ 300 U Performance Report Example Actual cost of goods sold were 72% of revenues instead of the budgeted 71%. Budget % Actual % Revenues $59,000 100 $60,000 100 Cost of goods sold 42,000 71 43,400 72 Gross margin $17,000 29 $16,600 28 Feedback This involves managers examining past performance and systematically exploring alternative ways to make better informed decisions in the future. Learning Objective 4 Distinguish among the problem- solving, score keeping, and attention-directing roles of management accountants. Problem Solving This involves comparative analysis for decision making. This role asks: Of the several alternatives available, which is the best?
Posted on: Thu, 10 Oct 2013 10:23:18 +0000
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