chapter ten an introduction to management accounting © 2015 mcgraw-hill education
TRANSCRIPT
Chapter Ten
An Introduction to Management
Accounting
© 2015 McGraw-Hill Education.
Type of User versus Type of Information
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Components of Product Cost
Materials Labor Overhead
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Average Cost per Unit
Total Cost
Number of Units= Average Cost per Unit
= $250$1,000
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For example, Average Cost Per Unit
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Labor Costs
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Overhead Costs
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Total Product Cost
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Overhead Costs: A Closer Look
Indirect Costs
Depreciation Supervisor’s Salary Utilities
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Manufacturing Product Cost Summary
DirectMaterials
DirectLabor
ManufacturingOverhead
Raw materialcosts that can
be easily tracedto products.
Factory wagesthat can be easily traced to products.
Other factory costs such as indirect
materials and labor, utilities, rent, security,
and depreciation.
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The Flow of Manufacturing Costs Through the Accounting Records
Balance Sheet Income Statement
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Schedule of Cost of Goods Manufactured
Appears on Income Statement
The Schedule of Cost of Goods Manufactured summarizes product cost
information for manager analyses.
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Inventory Holding Costs
Obvious Hidden
Financing and Warehouse
Space
Supervision
Theft, damage,
obsolescence
Increased Production
Time
Sloppy work Decreased Motivation
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Just-in-Time Inventory
JITEnables
Reduction or Elimination of
Non-value Added
Activities
Avoidance of Lost
Opportunities
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Ethical Considerations
• Certified Management Accountants are guided by the IMA Statement of Ethical Professional Practice
• The statement provides standards on– Competence– Confidentiality– Integrity– Credibility– Resolution of ethical conflict
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Benchmarking: Identifying Best Practices of Global Competitors
Total Quality Management
(TQM)
Activity-Based Management
(ABM)
Zero defects and Customer Satisfaction through
Continuous Improvement
Assessment of the Value Chain to create or refine value-added activities and eliminate
or reduce non-value-added activities.
Extends value chain analysis to all suppliers of a company, as well as
servicers of the company’s products.
Comprehensive Value Chain
Analysis
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End of Chapter Ten
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