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Cost Chapter 1
Transcript of Cost Chapter 1
What is Managment Accounting?
It measures and reports financial and
non-financial information that helps
managers make decisions to fulfill the
goals of an organization.
What is Financial Accounting?
Reporting focus directed to?
What does it measure?
What is the final product?
What are the criteria?
Info for both management and financial accounting
measures financial & non-financial data
Describes activities in planning & control
Includes continuous reduction of costs
Key part of overall strategy
Key Themes in Management Decision Making
Key Success Factors:
Cost and Efficiency,
Full recognition of behavioral as well as
Using different costs for different purposes
IMA- Standards of Ethical Conduct
Communicate financial position to outsiders
Do not have to follow GAAP; cost vs. benefit
GAAP compliant; CPA audited
Ultra current to very long time horizons
Historical monthly, quarterly reports
Designed to influence employee behavior
Indirect effects on employee behavior
Strategy & Management Accounting
Strategy – specifies how an organization matches its own capabilities with the opportunities in the marketplace to accomplish its objectives
Strategic Cost Management – focuses specifically on the cost dimension within a firm’s overall strategy