CHAPTER 2BASIC COST MANAGEMENT CONCEPTS(Slide 3)The LEARNING OBJECTIVES for this chapter are as follows:1.Describe a cost management information system, its objectives, and its major subsystems, and indicate how it relates to other operating and information systems.2.Explain the cost assignment process.3.Define tangible and intangible products, and explain why there are different product cost definitions.4.Prepare income statements for manufacturing and service organizations.5.Explain the differences between traditional and contemporary cost management systems.
cost information, a high-quality cost management system should have an organization-wide perspective and be able to interact with other information systems within the organization.(Slide 8)The value chainis the set of activities required to design, develop, produce, market, deliver, and provide post-sales service for the products and services sold to customers. Emphasizing customer value, forcesmanagers to determine which activities in the value chain are important to customers. (Slide 9)The cost management information system also has two major subsystems: the cost accounting information system and the operational control information system. The cost accounting information systemis a cost management subsystemdesigned to assign costs to individual products and services and other objects of interest to managers. The operational control information systemis designed to provide accurate and timely feedback concerning the performance of managers and others relative to their planning and control of activities. (Slide 10)