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Question 1: Differential Calculation Question 2: Value Chain Set of activities that transforms raw resources into the goods and services that end users purchase and consume. Question 3: Financial vs Cost Accounting FINANCIAL ACCOUNTING COST ACCOUNTING Users of information (decision makers) External (investors, creditors) Internal (managers) Important criteria comparability, decision relevance Decision r3elevance (for investors) (for managers) timeline Who establishes or defines the system External standard setting group managers (FASB in the US) How to determine accounting treatment Standards (rules) relevance for decision making Question 4: Value Added & Non-Value Added Activities Nonvalue-added activities : activities that do not add value to the good or service Value added activities: those activities that customers perceive as adding utility to the goods or services they purchase. Question 5: Trends in Cost Accounting Cost accounting continues to experience dramatic changes. Developments in information technology have nearly eliminated manual bookkeeping. Emphasis on cost control is increasing in banks, hospitals, manufacturing industries (from computers to automobiles), airlines, school districts, and many other organizations that have traditionally not focused on it. Cost accounting has become a necessity in virtually every organization, including fast food outlets, professional organizations, and government agencies. One reason for this rapid change is that managers at each stages of the value chain require information on the performance of products, services, suppliers, customers and employees. Managers of the activities and cost accountants must work together at each to make decisions that increase firm value. Because these processes themselves have undergone great change
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  • Fall '19
  • Cost Accountant

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