Beruflich Dokumente
Kultur Dokumente
TESTS
There will be one or two mid-term exams (for 30 percent
of your grade) and a comprehensive final exam (40 percent of your grade). Questions in exams are a combination of essays, multiplechoice and problems. These questions require specific understanding of the materials discussed in the textbook, class lectures and handout materials. Note: Student must use their own calculators for all quizzes and exams.
FCQ
There will be MANY unannounced quizzes during the semester. Each quiz contains one or more problem(s) from the most
recently lectured materials. These quizzes are very similar to the problems at the end of each chapter of your textbook with minor changes. These quizzes and projects count for 20 percent of your grade.
CLASS PARTICIPATION
Every student is required to participate in the class discussions. Students are encouraged to bring in to the class articles from business journals. During the first 15 minutes of every class meeting students are allowed to discuss those article(s) in the class. Other students may comment or question the
presenter.
ATTENDANCE POLICY
Attendance is as per Institute policy Do not enter after the class has started Once Seated cannot leave the class, however, may leave the class immediately after attendance Your attendance is required for all announced exams and unannounced quizzes, however
Economic activities
Accounting links decision makers with economic activities and with the results of their decisions.
Accounting
information
Actions (decisions)
Decision makers
Managerial
Information System
Cost & Revenue Determination Job costing Process costing ABC Sales Assets & Liabilities Plant and equipment Loans & equity Receivables, payables & cash Cash Flows From operations From financing From investing
Information Users Investors Creditors Managers Owners Customers Employees Regulatory agencies -SEC -IRS -EPA
Decision Support CVP analysis Performance evaluation Incremental analysis Budgeting Capital allocation Earnings per share Ratio analysis
Behavioural Implications
Time Focus Time Span Reports Activities
The Past
Cost Accounting
Focused On
Recording Data
Information about decision-making authority, for decision-making support, and for evaluating and rewarding decision-making performance.
Information useful in assessing both the past performance and future directions of the enterprise and information from external and internal sources.
Information useful to help the enterprise achieve its goal, objectives and mission.
require information to make decisions Primary focus of management accounting is towards users within an organization Management accounting does not exist to generate data, but it exists because managers require information for decisions Framework for Management Accounting
Strategic Planning Management Control Operational Control
MANAGEMENT CONTROL
Budget analysis Short-term forecasting Engineered costs Variance analysis Overall budget Budget preparation
STRATEGIC PLANNING
Tanker fleet mix Warehouse and factory location
Structured SemiStructured
Inventory reordering Inventory control Production scheduling Bond trading Cash management
R and D planning
Management
Major Means: Accounting Information 1. Problem-solving information Major Ends: Helping Decisions 1. Managers for long-range planning and special decisions
2. Attention-directing information
3. Scorekeeping information
Controlling involves the implementation of plans and the use of feedback to monitor
achievements
Product Development
Introduction to Market
Mature Market
Phase-Out of Product
CUSTOMER FOCUS
Distribution Production
Marketing
Question
What is now the primary objective of cost management?
The Future
Cost Management
The Future
Cost Management
The Future
Cost Management
Supporting Strategies
The Future
Cost Management
Supporting Strategies
External Users
planning. Assisting managers in directing and controlling activities. Motivating managers and other employees towards organizations goals. Measuring performance of activities, managers, and other employees. Assessing the organizations competitive position.
Acquires Resources
Decision Making
Controlling
Planning
Hires People
Work of Management
Planning
Controlling
Planning
Identify
alternatives.
Controlling
The control function ensures that plans are being followed. Feedback in the form of performance reports that compare actual results with the budget are an essential part of the control function.
Exh. 1-1
Begin
Decision Making
Organizational Structure
Decentralization is the delegation of decision-making authority throughout an organization.
Treasurer
planning and control activities. Preparing financial statements for external users.
Controller
The chief managerial and financial accountant responsibility for:
Supervising accounting personnel
Preparation of information and reports, managerial
Treasurer
Responsible for raising capital and safeguarding the organizations assets. Supervises relationships with financial institutions. Work with investors and potential
Internal Auditor
Responsible for reviewing accounting procedures, records, and reports in both the controllers and the treasurers area of responsibility. Expresses an opinion to top management regarding the effectiveness of the organizations accounting system.
values to employees. They have diverse educational backgrounds. They need broad knowledge of the organization. Competence is a given!
Improve products
Improve services
Support strategies
Reduce costs
Professional Ethics
Competence
Confidentiality
Integrity
Credibility
Ethical Behavior
Follow applicable laws, regulations and standards.
Competence
Prepare complete and clear reports after appropriate analysis.
Ethical Behavior
Do not disclose confidential information unless legally obligated to do so. Do not use confidential information for personal advantage.
Confidentiality
Ethical Behavior
Avoid conflicts of interest and advise others of potential conflicts. Do not subvert organizations legitimate objectives.
Integrity
Recognize and communicate personal and professional limitations.
Ethical Behavior
Avoid activities that could affect your ability to perform duties.
Integrity
Communicate unfavorable as well as favorable information.
Ethical Behavior
Communicate information fairly and objectively.
Objectivity
Disclose all information that might be useful to management.
Team Focus
Earlier Management responsibilities were defined by their FUNCTIONAL ROLES FUNCTIONAL ROLES - Narrowly Defined - Jobs That Focus On Specific Activities
Team Focus
Now Decisions are made by CROSSFUNCTIONAL MANAGEMENT TEAMS
CROSSFUNCTIONAL MANAGEMENT TEAMS -
Involves bringing together individuals from diverse functions and backgrounds to generate innovative solutions to problems.
Team Focus
ENTREPRENEURIAL DECISON MAKING
Focuses On Finding New Opportunities;
Key questions?
Build Continuing market Maintain growth Be a major player Protect market share
High
REWARDS
Hold
Medium
Harvest
Low
Divest
Declining market Exit at lowest cost Minimize losses Find a buyer quickly
Low
Medium
RISK
High
Competitive advantages exist in a value chain that enables an organization to provide more value at a lower cost than its competitors.
organization can do better than its competitors to provide valued products and services for which customers will pay higher prices.
Objectives
efficiency and effectiveness of major activities. Identify and evaluate new activities that can improve performance.
BENEFITS OF OUTSOURCING
QUALITATIVE 1. Quality of service
BENEFITS OF OUTSOURCING
QUANTITATIVE 1. Personnel cost savings 2. Facilities cost savings 3. Support cost savings
Value Chain
The value chain describes the activities that increase the value of an organizations products or services.
What is a Process?
PROCESS
A related set of tasks that transforms inputs into
identifiable outputs Research and development Design Supply Production Marketing Distribution Customer service Support services
Marketing
Start
Human resources
R& D
Desig n
Supply
Production Marketing
Distribution
Customer service
Primary processes
Activities
Production Marketing R& Customer Distributio Design D service n
Non ValueValue Added Activity: Added Activity: Does this Hmmmm? Customers add value? perceive no as adding value. value. Evaluate each activity
Value Chain
R&D Research and Development
Value-Added
Non Value-Added
Value Chain
Design
Value-Added
Non Value-Added
Value Chain
Production
Value-Added
Non Value-Added
Value Chain
Marketing
Value-Added
Non Value-Added
Value Chain
Distribution
Value-Added
Non Value-Added
Value Chain
Customer Service CS
Value-Added
Non Value-Added
Potential problem?
What is most likely to be outsourced? Information services, legal, logistics, human resources, payroll, accounting, tax. Potential problem Loss of control and internal expertise.
improvement and measuring the effects of proposed improvement by comparing both the cost and benefits of a proposal. Cost benefit analysis
QUANTITATIVE INFORMATION QUALITATIVE INFORMATION
Managerial Decisions
Carmens Cookies
Are costs greater than benefits? What are Carmens cost drivers? What are Carmens differential revenues? What are Carmens differential costs?
Dont Expand
Expand
Cost Driver
What are Carmens cost drivers?
Cost Driver
Rent
Number of storefronts
Insurance
Labor Ingredients
Number of cookies
Differential Costs
Costs that change in response to a particular course of action.
Differential costs
Differential Revenues
Revenues that change in response to a particular course of action.
Differential revenues
$6,300
$8,505a
$2,205
Budget
A financial plan for the revenues and resources needed to meet financial goals.
CARMENS COOKIES
Budgeted Costs For the Month Ending April 30
Number of cookies Food Flour Eggs Chocolate Nuts Other Total Food $2,200 4,700 1,900 1,900 2,200 12,900 Labor Manager Other Total Labor Utilities Rent Total cookie costs 3,000 1,500 4,500 1,800 5,000 $24,200 32,000
Eggs
Chocolate Nuts Other Total Food
5,200
2,000 2,000 2,200 $13,500 2,200
4,700
1,900 1,900 0 $12,900
500
100 100 $600
Difference Actual Labor Manager Other Total Labor Utilities Rent Total cookie costs 3,000 1,500 4,500 1,800 5,000 $24,800 5,000 $24,200 1,500 4,500 1,800 0 $600 3,000 0 0 0 0 Budget (Variance)
Quantitative Information
Quantitative Information can be measured relatively easily and is usually expressed in Rupees or other quantities relating to size,
frequency, etc.
Qualitative Information
Qualitative Information is descriptive and is based on characteristics or perceptions, such as relative desirability, rather than quantities.
Hold
Harvest Divest
Variances are the differences between a plans actual and expected quantities.
Just-in-time production
Total quality management Process reengineering
Theory of constraints
International competition E-commerce
Change
Schedule production.
JIT Consequences
Improved plant layout Zero production defects
Flexible workforce
JIT purchasing Fewer, but more ultrareliable suppliers. Frequent JIT deliveries in small lots. Defect-free supplier deliveries.
Increased throughput
is
Competitive Advantage
Threats
Assignment
How do companies use benchmarking to make important decisions?
Process Reengineering
A business process is diagrammed in detail.
Anticipated results: Process is simplified. Process is completed in less time. Costs are reduced. Opportunities for errors are reduced.
The process is redesigned to eliminate all non-value-added activities
existing processes.
Likely to be imposed
Theory of Constraints
A sequential process of identifying and removing constraints in a system.
Restrictions or barriers that impede progress toward an objective
Theory of Constraints
A constraint (also called a bottleneck) is anything that prevents you from getting more of what you want.
The constraint in a system is determined by the step that has the smallest capacity.
Theory of Constraints
Only actions that strengthen the weakest link in the chain improve the process.
1. Identify the weakest link. 2. Allow the weakest link to set the tempo.
International Competition
Increasing sophistication in international markets.
An excellent management accounting system is needed to succeed in todays competitive global marketplace.
Question
Stallion Gears is considering cessation of its consumer division due to rising litigation cost, but this will put 400 people out of work.
Stallions President is concerned about the morale of the other workers. Is this decision quantitative or qualitative in nature?
Question
What is the style of management that puts several people from different areas together to generate innovative problem solutions?
A. Functional Role Management B. Cross-Functional Team Decision Making C. Entrepreneurial Decision Making
Question
What is the set of linked operations that are involved in providing goods & services to customers?
Question
CMC helps companies adapt organizational structures to current industry trends. Recently, the CEO approached Aplab Ltd., a hi-tech research company that offered a contract to CMC to assist in reorganizing the company. CMC reported the following costs and revenues during the past year. CMCs Annual Statement Sales Costs Labour Equipment Lease Rent Salaries Other Costs Total Costs Operating Profit Rs. 1.20 crores Rs. 57.00 lacs Rs. 8.40 lacs Rs. 5.40 lacs Rs 35.00 lacs Rs. 3.80 lacs Rs. 1.17 crores Rs. 3.20 lacs
If CMC decides to take the contract to help the company reorganize, it will hire a full-time consultant at Rs.13.40 lacs. Equipment Lease will increase by 5%, it must buy certain computer Equipment. Supplies will increase by an estimated 10% and other costs by 15%. Existing building has space for new consultant and no new person would be required. What costs would be incurred as a result of taking the contract? If the contract will pay Rs. 15 lacs in the 1st year, should CMC accept it? What considerations other than costs are necessary for making a decision?
Assignment
How does outsourcing affect an organization's value chain?
Assignment
Suppose you are the VP of the largest department store in the region. The President calls you and says though we are the largest
store, only 30% of the sales are from locals. Find out why the balance are not? Why could this be a critical question and how would you organize the team to find the answers?
Assignment
If every manager minimizes the cost of process he or she supervises, overall cost of the company will decrease. Do you think this is a
Assignment
What is a virtual organisation?
Group Assignment
Identify 2 companies from any
industry, find their most recent annual reports on the net. From the Directors reports identify and list the similarities and differences in these 2 competitors declared strategies.
End of Lecture