ACCT 102 Chapter 14 Sp 2010

ACCT 102 Chapter 14 Sp 2010 - ACCT 102- Managerial...

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1 ACCT 102- Managerial Accounting Lecture Notes – Chapter 14: MANAGERIAL ACCOUNTING CONCEPTS AND PRINCIPLES - Schmidt MANAGERIAL ACCOUNTING BASICS Purpose of Managerial Accounting In ACCT 101, we learned the basics of financial reporting. The remainder of this course, except for financial statement analyses topics in Chapter 13, will look at how to gather and report information for managers in making planning and control decisions. Much of this learning will use manufacturing companies as the setting. The importance of managerial accounting analytical tools has increased as a result of the following changes in the business environment: a. Lean business model —goal is to eliminate waste while “satisfying the customer” and providing a “positive return to the company”. This results in customer orientation and is affected by the expanded competitive boundaries of the global economy . b. Lean practices , that follow an underlying philosophy of continuous improvement, include: 1. Total quality management (TQM )—focuses on quality improvement and applies this standard to all aspects of business activities. 2. Just-in-time manufacturing (JIT )—a system that acquires inventory and produces only when needed (as order received—a demand-pull system). Exhibit 14.2 contrasts seven different characteristics of financial accounting compared to managerial accounting. The most important of these are: 1. Users and decision makers a. In financial—Investors, creditors and other users external to the organization. b. In managerial—Managers, employees and decision makers internal to the organization. 2. Purpose of information a. In financial—Assist external users in making investment, credit and other decisions. b.
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This note was uploaded on 03/08/2012 for the course ACCT 102 taught by Professor D.schmidt during the Winter '12 term at Cerritos College.

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ACCT 102 Chapter 14 Sp 2010 - ACCT 102- Managerial...

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