ACF2200 WEEK 2.docx - What are costs? - Resources given up...

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What are costs?
In financial accounting:When is cost classified as an Asset?
When Is cost classified as a Expense?.
Why is cost important?
Traditional approaches to costing?
-Looks at differencebetweenactual &planned/budgeted costs-Estimates costs oforganisational units(e.g.departments) and/or products(goods and services)-Assumes thatproduction volumeis theonly factorthat cancause costs to change( if productionincrease 10%, cost increases by 10%)-Information ismainly obtained from financialaccounting systemModern approaches to costing?Developed in 1990s in response to changes inth business environmentPro-active and detailedin providinginformation tomanageresourcesEmphasisesnon-financialandqualitativeinfoFocuses on abroader range of costsExamines what’s going on insideand outsidethe organisationfor example, in relation to customers,competitors, suppliers etc.Focus isnot only to control costs but to reducethemThereal ‘root’ causes of costs are analysed,andwasteful activities are identified andeliminated
Non-financial and qualitative info example?
Broader range of costs example?
4 components of management accounting systems?
-Budgeting systems-Performance measurement systems
Traditional systems’ costing system?
-Assumeproduction volume is the only factorthatcan
Modern systems’ costing system?
Traditional systems’ budgeting system?
Modern systems’ budgeting system?
Traditional systems’ performance measurementsystems?
Modern systems’ performance measurement system?
-Look at what’s happening outsidethe organisation:
Traditional systems’ cost management?

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Term
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Tags
production supervisor, research manager, maintenance manager, productionsupervisor

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