L01-Introduction and cost terms_1

L01-Introduction and cost terms_1 - Topic1:...

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Topic 1: Introduction and cost terms
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Introduction Modern cost accounting provides key information to managers for their decision making process. The study of modern cost accounting gives an insight into both the manager’s role and the accountant’s role in an organisation.
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Structure of lecture Difference between management and financial accounting. How management accounting adds value to the organisation Major themes in management accounting Costs and terminologies Product costs
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Cost Accounting . .. Provides information for both management accounting and financial accounting. It measures and reports financial and non- financial data that relates to the cost of acquiring or consuming resources by an organisation.
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What is Cost Management? In addition to measuring and reporting costs, it is a philosophy, an attitude, a set of techniques to create more value at lower cost. Cost Management Cost Management What is a Cost Management System? A set of cost- management techniques that function together to support the organization’s goals and activities.
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Cost Management Systems Determine efficiency and effectiveness of major activities. Identify and evaluate new activities that can improve performance. Objectives Measure the cost of resources consumed. Identify and eliminate non-value-added costs.
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Product Product Design Research Research and and Development Development Strategic Cost Management and the  Value Chain Securing raw Securing raw materials and materials and other resources other resources Production Production Marketing Marketing Distribution Distribution Customer Customer Service Service Start Start
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Differences Between Financial and  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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Managing Resources, Activities, and  People An organization . . . Acquires Resources Hires People Organized set Organized set of activities of activities Decision Making Planning Directing Controlling
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How Managerial Accounting Adds  Value to the Organization Providing information for decision making and planning. Assisting managers in directing and controlling activities.
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This note was uploaded on 09/19/2011 for the course ACCOUNTING 211 taught by Professor Min during the Three '11 term at Curtin.

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L01-Introduction and cost terms_1 - Topic1:...

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