copyright © 2012 pearson education, inc. publishing as prentice hall. financial accounting...
TRANSCRIPT
Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall.
Managerial Accounting
Financial Accounting
Reporting the firm’s successesand failures
Managerial Accounting
Creating the firm’s successes and failures
Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall.2
Today’s Agenda: Course Introduction
Managerial vs Financial Accounting
Course Process Details
Course Content Overview & Learning Objectives
Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall.
Teaser: The Make or Buy Decision
Fireball Company makes a Halogen bulb as a component of a specialty lighting system.
Fireball Company’s internal “make” cost is $30 per unit @20,000 units produced.
(including all production costs from their ERP system)
Fireball can “buy” these for $20 FOB Destination per unit @ 20,000 units.
Which option should we take boss?What is holding back your full commitment?
Fireball Company makes a Halogen bulb as a component of a specialty lighting system.
Fireball Company’s internal “make” cost is $30 per unit @20,000 units produced.
(including all production costs from their ERP system)
Fireball can “buy” these for $20 FOB Destination per unit @ 20,000 units.
Which option should we take boss?What is holding back your full commitment?
Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall.
Teaser: The Make or Buy DecisionCosts for 20,000 bulbs Total
Cost Per Unit
Differential Cost Per
UnitPurchase bulbs: $ 20 $ 20
Make bulbs:Direct materials 9$ 9$ Direct labor 5 5 Variable overhead 1 1 Supervisor's salary 2 2 Shared factory costs (eg. rent) 13 - Total cost 30$ 17$
60,000$ Making 20,000 bulbs in-house saves:
Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall.
Managerial Accounting
Financial Accounting
Reporting the firm’s successes and failures
Managerial Accounting
Creating the firm’s successes and failures
Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall.
Managerial: customized internal information to gain
competitive advantages
Financial: standardized reports for
external use by investors,
lenders, and others
Managerial Accounting
Financial Accounting vs.
Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall.
Differences Between Financialand Managerial Accounting
Financial Managerial
Designed to be used by
Outsiders: investors, lenders, etc.
Internal Management
Time Perspective
Reporting on past performance
Decisions to effect the future
Emphasis Standardized by GAAP – doing it the same as everyone else
Customized to specific company, segment, and individual decision needs.
Requirements
GAAP standards of conformity
Whatever the company needs
Benefit Display performance of a company
Build competitive advantages and profits
Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall.
Total cost of goods sold (COGS) for the Volkswagen group
Additional costs incurred by adding one more option to a new Audi All-Road wagon
Best Buy earned $1.2B of sales of $50B last year.
The particular business segments performances that are bringing them down
Should I invest in UPS? Will elimination of 2 day service increase or decrease our (UPS) profits?
Financial #’s vs. Managerial decision & information differences
Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall.
Is managerial accounting important?
Global economy
Speed, impatience, information, and aggression
Customer expectations: low price / high everything else
Does it help my career if I am not an accountant?
Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall.12
Today’s Agenda: Course Introduction
Managerial vs Financial Accounting
Course Process Details
Course Content Overview & Learning Objectives
Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall.
Course Process Details
Course Information SheetTutors?ContactsHomework
.
Two required testsOne required project, in two steps
Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall.14
Today’s Agenda: Course Introduction
Managerial vs Financial Accounting
Course Process Details
Course Content Overview & Learning Objectives
Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall.
Ethical radar and corporate governanceUnderstanding cost behavior so we make profitable decisionsUsing the information we generatePracticality: Inexpensive and useful trumps expensive, perfect, and wastefulSelling your position
Common semester long themes for management accounting:
Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall.
Break it Down: The 1st Half
Get your feet wetEnvironmentCost typesCost flow
Cost flow optionsJob & processActivity Based
Cost Volume Profit AnalysisDecisions based on the above tools
Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall.
Break it Down: The 2nd Half
More decision making situationsCapital budgetingBudgetingVariance analysisSegment performance evaluation
Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall.
Project:Apply course lessons to your visionCentral Themes
Quantifying your business ideas using formal business research resourcesCreating budgetsUsing basic Excel spreadsheet capabilities to get it doneGetting it done using YOUR creativity and fortitude
Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall.
Ethics Exercise: Connection to 1B
Form groups by ethical dilemma.Select 1 business related ethical dilemma. Answer the questions on the paper
Really think and don’t settle for just the short obvious answers. Be creative.Explore the possible extensions of what to do along with the obvious choices.
Your team will have 10 minutes to prepare for a class discussion on your topic.