management accounting study ppt
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Management Accounting
Management accounting; is a branch of accounting designed to provide information to internal economic decision makers (managers).
Management Accounting
Management accounting; is also called managerial accounting or cost accounting.
Management Accounting
Management accounting; is the process of identification, measurement, accumulation, analysis, preparation, interpretation, and communication of financial information used by management to plan, evaluate, control ; an organization
Cost Accounting
Cost accounting; a narrow application of management accounting dealing specifically with procedures designed to determine how much a particular item (usually a unit of manufactured product) costs.
Financial Accounting
Financial accounting; the branch of accounting designed to provide information to external decision makers such as stockholders and creditors.
Focus of financial and managerial accounting
Traditionally, financial accounting has focused primarily on a company’s overall profitability, solvency, and liquidity. Management accounting, on the other hand, focuses on the efficiency, productivity, and product or service quality of a company’s various operating functions.
Treasurer
Treasurer, the corporate officer who is responsible for cash and credit management and in charge of obtaining external financing and making investments for the company.
Controller
Controller, a company’s accountant who is responsible for the preparation of accounting reports for both external and internal decision makers.
Industrial Revolution
Industrial revolution; term used to describe the transition in the United States from an agricultural based economy to a manufacturing based economy.
Scientific Management
Scientific management; a management philosophy based on the notion that factories were run by machines some mechanical and some human. Scientific management experts believed they could improve production efficiency by establishing standards of performance for workers.
Institute of Management Accounting (IMA)
The institute of management accountants (IMA) the leading professional organization devoted to management accounting. The IMA provides similar professional support to management accountants as the AICPA American Institute of certified public accountants provides to financial accountants.
Value based management (VBM)
Value based management (VBM) ; A mechanism by which managers can make strategic and tactical decisions that serve to maximize the long-term value of an organization.
Period cost
Period cost; all costs incurred by a company that are not considered product cost. Includes selling and administrative cost.
Selling cost
Selling cost; the cost of locating customers, attracting customers, convincing customers to buy, and the cost of necessary paperwork to document and record sales.
Administrative cost
Administrative cost; all costs incurred by a company that are not product costs or selling costs. The cost or areas that provide support to the product and selling areas such as the cost of accounting, finance, employees relations, and executive functions.
Cost of goods schedule
Beginning inventory
(+) Purchases
(-) Goods available for sale
(-) Ending Inventory
(=) Cost of Goods Sold
Direct material cost
Direct material cost; the cost of all raw materials that can be traced directly to a unit of manufactured product.
Direct labor cost
Direct labor cost; the cost of all production labor that can be traced directly to a unit of manufactured product.
Manufacturing overhead cost
Manufacturing overhead cost; all costs associated with the operation of the manufacturing facility besides direct material cost and direct labor cost. It is composed entirely of indirect manufacturing cost incurred to support multiple cost objects.
Raw materials inventory
Raw materials inventory; materials that have been purchased but have but have not yet entered the production process.
Work in process inventory
Work in process inventory; products that have entered the production process but have not yet been completed.
Finished good inventory
Finished goods inventory; products that have been completed and are ready to sell.
Direct material
Direct material; the raw material that becomes a part of the final product and can be easily traced to the units produced.
Direct labor hours
Direct labor hours; the time spent by production workers as they transform raw materials into units of finished products..
Manufacturing overhead
Manufacturing overhead; all activities involved in the manufacture of products besides direct materials or direct labor.
Overhead
Overhead; in a manufacturing company, another name for manufacturing overhead cost, in a service type business, the indirect service cost.
Indirect manufacturing cost
Indirect manufacturing cost; another name for manufacturing overhead cost.
Hybrid firms
Hybrid firms; companies that generate revenue from both providing services and selling products.
Direct or indirect costBlue Water Travel operates a chain of travel offices in eastern United States. Blue Water Travel’s home office is in New York. There are six sales offices and a district office located in Florida.
If the cost object is one of the sales offices in Florida, indicate which would describe an indirect cost (I) and a direct cost as (D).