Unformatted text preview: GB 202 Class #1
INTRODUCTION Undoubtedly you're familiar with audio CDs. Assume that you're working for a company that makes these CDs--either for established music groups or for new groups trying to get a wider audience for their music. Form groups of 3-4 students each and with the other members of your group, take 10 minutes and come up with a list of what goes into making an audio CD-- just like the ones you buy at a store or on-line. We'll hear from each other and then try to determine how much it costs to make a CD. CD Requirements The master recording or tape (to make a glass master) Glass, silver and lasers (for the glass master) Nickel (for electroplating) Machinery The CDs The label on the CD The jewel box (cardboard sleeve) The tray that holds the CD in the jewel box The folder (insert) The shrink wrap The topspine sticker The artwork or film for the folder Studio time for the recording Studio engineer time for the recording Group's business manager's time to arrange all this How Much Will This Cost?
See www.acmecd.com www.oasiscd.com Lessons Learned It's essential to know the cost of your product
o o o That means knowing your product thoroughly (note how detailed even a common product can be) Cost includes more than just materials And you can't just talk about "the" cost, because cost may vary by volume Knowing how much of a product to make depends on marketing and on corporate strategy o But profitability enters into the picture o So costs and performance are tied together One way that businesses get their hands around these concepts (get a sense of the big picture) is through a concept called the value chain The Value Chain
Research and Development Obtain Materials Manufacturing Value-added activities include all steps involved in the actual processing of goods or performing of services. Marketing Delivery What's "research and development" for a producer of audio CDs? Materials and manufacturing were seen earlier. How can you market an audio CD? Delivery Where does Managerial Accounting fit in? Enables cost analysis--thus providing feedback to production, marketing, logistics, strategy Facilitates performance measures Helps with benchmarking (comparing our firm to other firms) Distinguishing Between Managerial and Financial Accounting
Users Managerial Accounting Financial Accounting Level of Aggregation Information Type Regulation Insiders including Outsiders including executives, managers, and investors, creditors, operators government agencies, analysts, and reporters Local information on Global information on the subunits of the company as a whole organization Economic and physical Financial data data as well as financial data Unregulated, limited only Regulated by SEC, FASB, by cost/benefit analysis and other determinants of GAAP Differences Between Managerial and Financial Accounting, Cont.
Information Characteristics Managerial Accounting Financial Accounting
Estimates that promote relevance and enable timeliness Factual information that is characterized by objectivity, reliability, consistency, and accuracy Past only, historically based Delayed with emphasis on annual reports Time Horizon Reporting Frequency Past, present, and future Continuous reporting ...
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