MA_Chapter1 - ACTG 1P11 CHAPTER 1 INTRODUCTION TO...

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ACTG 1P11 CHAPTER 1 – INTRODUCTION TO MANAGEMENT ACCOUNTING Defining Managerial Accounting - Who is it for? o Internal users, e.g. managers, supervisors, CEO - What is it for? o o AKA: Choose your strategy, plan to achieve it, direct & motivate personnel to achieve the goal, control your progress, then make necessary adjustments when actual deviates from planned Planning - Communicating company goals - Financial plans = “Budgets” o E.g. Cash Flow Budget, Production Budget - Planning involves selecting a course of action and how the action will be implemented - How do we choose our course of action? o SWOT Analysis – Strengths, Weaknesses, Opportunities, Threats o Control - Managerial info is used to evaluate manager performance and the performance of their department (the operations they are in charge of) - Leads to serious behavioural implications o Managers are evaluated to determine if their performance should be rewarded or punished. o Operations are evaluated to determine if they should be changed. - How do we evaluate? o Performance reports : presents actual vs. budget and identifies differences (called “variances”) o Management by exception – an approach whereby managers focus their attention to those areas where variances meet or exceed minimum criteria E.g. all variances of 10% or more from budget are investigated Decision Making
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- Decisions are made to reward or punish managers. -
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This note was uploaded on 11/04/2011 for the course ACTG 1P11 taught by Professor Nchasse during the Fall '11 term at Brock University, Canada.

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MA_Chapter1 - ACTG 1P11 CHAPTER 1 INTRODUCTION TO...

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