Lecture 15 Introduction to Managerial Accounting

Lecture 15 Introduction to Managerial Accounting -...

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Managerial Accounting Understand how managerial accounting differs from financial accounting. Introduce commonly used cost terminology. Understand cost behaviors. Understand how to use high-low, scatter graph, and least squares regression to analyze mixed costs. Prepare an income statement using the contribution format.
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Managerial and Financial Accounting Managerial accounting provides information for managers of an organization who direct and control its operations. Financial accounting provides information to stockholders, creditors and others who are outside the organization.
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Financial versus Managerial Accounting Financial Managerial Accounting Accounting 1. Users External persons who Managers who plan for make financial decisions and control an organization 2. Time focus Historical perspective Future emphasis 3. Verifiability Emphasis on Emphasis on relevance versus relevance verifiability for planning and control 4. Precision versus Emphasis on Emphasis on timeliness precision timeliness 5. Subject Primary focus is on Focuses on segments the whole organization of an organization 6. Requirements Must follow GAAP Need not follow GAAP and prescribed formats or any prescribed format
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Purpose of Managerial Accounting Managerial Accounting What are the goals? Performance Evaluation and control Costing Budgeti ng Variance Analysis Profit and Cost Centers Decision Making Pricing Production Product Mix Make or Buy Change Method Discontinue
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Basic Terminology of Cost Cost A sacrifice of resources. Is a cost different from an expense? Generally, costs are recognized as expenses on the income statement in the period that benefits from the cost. Specifically, costs incurred to generate a particular revenue
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This note was uploaded on 04/11/2009 for the course ACCT 410x taught by Professor Bonner during the Fall '06 term at USC.

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Lecture 15 Introduction to Managerial Accounting -...

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