lecture_1_ch1 - LectureOne...

Info icon This preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
Lecture One: 12/23/11 Financial Accounting: External users [look inside company from outside]; produces  financial statements - balance sheet, income statement, statement of cash flows,  statement of owner’s equity; past performance; GAAP [governed by this, format], only  verifiable info [company is trying to show itself, outsiders trying to know what is going on  inside [truthful, supported by info] Auditors assess and make sure company is not  cheating outsiders. But company hires auditors. So...they are probably looking at  company’s interests. Managerial Accounting - Internal users; future performance focus;  no rules [no specific  format]; rough estimates [ball park info] Example: Pizza store with two types of pizzas. We have all types of costs.  DMaterials 10,000 DLabor 20,000 Rent 30,000 Utilities 5,000 Total Cost: 65,000 Plain 5,000 Pepp 5,000 Cost per unit of pizza...? 65k/10k = 6.5 Average. But Plain should be less than Pepp  Price company should sell pizza...? Competitors: 10k for $10, 15k for for $12. What should we sell for?  Per unit rent? Depends on how much you end up making. It depends. Utilities?  Nobody knows per unit cost of making anything! SMart technique: Charge whatever the 
Image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
market can bear. Suppose market is $6 for plain, $7 for pepperoni... you should move elsewhere!
Image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern