Chapter 1 Notes

Chapter 1 Notes - Acct 2301 Managerial Accounting...

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Acct 2301 Managerial Accounting
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Instructor: Noel Sloan
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About me… Graduated from Baylor University and Baylor School of Law JD, CPA Practiced for 10 years at both Accounting Firms and Law Firms Married 3 Kids 1 Dog
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Everyone Can Do Well In This Class…It’s Up to You Historically, some students enter accounting with a preconceived notion that “ accounting is hard. This semester, I hope to illustrate that this is not true . If anything, students find this material “too intuitive” and neglect to put enough effort into ensuring they can work course problems.
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Bean-Counters Historically, some students enter accounting with a preconceived notion that “ accounting is boring. This semester, I hope to convince you otherwise. At a minimum, I hope to illustrate (1) why accounting is useful and (2) why the accounting profession is a good one.
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Management Accounting
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Financial Accounting Provides info used primarily by investors, creditors, and others outside a business Characterized by objectivity, reliability, and historical nature Reports what happened yesterday Information made available to the general public; therefore, regulated by SEC, FASB, GAAP, Sarbanes-Oxley Act of 2002
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Managerial Accounting Provides info used primarily by executives, managers, and employees who work inside the business Internal users need info to plan, direct and control business operations. Example – Budget Characterized by relevance and timeliness Reports what is expected to happen tomorrow Proprietary information not availabe to the public
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Insert Exhibit 1-2  Here
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Product Costing This is a major focus of the course As managers, we want to know how much the product cost I wonder how much it cost to make this pencil?
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Product Costs Products are made up of 3 “kinds” of costs: Direct Materials Direct Labor Manufacturing Overhead
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Knowing Cost Is Important… for companies making tangible products Materials Labor Overhead
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Insert Exhibit 1-3  Here Minor differences in the cost per table (e.g., took more time to build table 1 than table 4) would make no difference in pricing or other decisions management needs to make. What is the average cost per table?
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Average Cost per Unit Total Cost Number of Units = Average Cost per Unit = $250 $1,000 4 Tabor Example Average Cost Per Unit
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Costs Can Be Assets or Expenses Period  Cost Expense COGS (Exp. Acct) Inventory (Asset Acct) Product  Cost (DM, DL, OH) Balance Sheet Income Statement
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Chapter 1 Notes - Acct 2301 Managerial Accounting...

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