cost accounting fundmentals 01
TRANSCRIPT
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2014 by McGraw-Hill Education. This is proprietary material solely or authori!ed instructor use. "ot authori!ed or sale or distribution in any
manner. This document may not be copied# scanned# duplicated# orwarded# distributed# or posted on a website# in whole or part.
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PowerPoint Authors:
Susan Coomer Galbreath, Ph.D., CPA
Charles W. Caldwell, D.B.A., CMA
Jon A. Booker, Ph.D., CPA, CIACnthia J. !oone, Ph.D., CPA
Copyright 2014 by The McGraw-Hill Companies, Inc !ll rights reser"e#McGraw-Hill$Irwin
Cost Accounting: Informationfor Decision Making
Chapter 1
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1-3
Value Chain
"he value chain des#ribes a set o$ a#ti%ities that
trans$orms raw materials and resour#es into the &oodsand ser%i#es end users 'ur#hase and #onsume.
LO 1-1 Des#ribe the wa mana&ers use a##ountin&in$ormation to #reate %alue in or&ani(ations.
LO
1-1
Value-AddedValue-Added
ActivitiesActivities
Those activities thatThose activities that
customers perceive ascustomers perceive as
adding utility to the goodsadding utility to the goodsor services they purchase.or services they purchase.
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The Value Chain Components
Produ#tion
LO
1-1
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Accounting Systems
)inan#ial
a##ountin&
)inan#ial
'osition andin#ome
!e'orts
Cost
a##ountin&
In$ormation
about #osts
!e'orts
LO 1-2 Distin&uish between the uses and users o$ #osta##ountin& and $inan#ial a##ountin& in$ormation.
LO
1-2
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1-6
Managerial Decisions
Indi%iduals make de#isions.
De#isions determine the 'er$orman#e o$ the
or&ani(ation.
Mana&ers use in$ormation $rom the a##ountin&sstem to make de#isions.
*wners e%aluate or&ani(ational and mana&erial
'er$orman#e with a##ountin& in$ormation.
LO 1-3 +'lain how #ost a##ountin& in$ormation is used$or de#ision makin& and 'er$orman#e e%aluationin or&ani(ations.
LO
1-3
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Differential Costs
Costs that #han&e in
res'onse to a
'arti#ular #ourse o$
a#tion.
Di$$erential #osts#han&e -di$$er
between a#tions.
LO
1-3
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Differential Revenues
!e%enues that
#han&e in res'onse
to a 'arti#ular
#ourse o$ a#tion.
Di$$erential re%enues
#han&e -di$$er
between a#tions.
LO
1-3
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Costs for Control andEvaluation
A res'onsibilit #enter is a s'e#i$i# unit o$ an
or&ani(ation assi&ned to a mana&er who is
held a##ountable $or its o'erations and
resour#es.
LO
1-3
LO
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Trends in Cost Accounting
/. !esear#h and de%elo'ment
0. Desi&n
1. Pur#hasin&
2. Produ#tion
3. Marketin&
4. Distribution
5. Customer ser%i#e6. +!P 7 +nter'rise resour#e 'lannin&
8. Creatin& %alue in the or&ani(ation
LO 1-4 Identi$ #urrent trends in #ost a##ountin&.
LO
1-4
LO
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Cost Accounting inResearch and Development
9ean manu$a#turin& te#hniues are not sim'labout 'rodu#tion.
Com'anies 'artner with su''liers in the
de%elo'ment sta&e to ensure #ost;e$$e#ti%edei&ns $or 'rodu#ts.
LO
1-4
LO
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Cost Accounting in Design
Produ#t desi&ners must write detaileds'e#i$i#ations on a 'rodu#t
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Cost Accounting in Purchasing
Per$orman#e measurement indi#ates how well a
'ro#ess is workin&.
It minimi(es unne#essar transa#tion 'ro#esses.
Ben#hmarkin& methods measure 'rodu#ts,
ser%i#es, and a#ti%ities a&ainst the best
'er$orman#e.
Ben#hmarkin& is an on&oin& 'ro#ess resultin& in
#ontinuous im'ro%ement.
LO
1-4
LO
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Cost Accounting in Production
A lean a##ountin& sstem 'ro%ides
measures at a work #ell or 'ro#ess le%el.
JI" is an in%entor sstem desi&ned tolower the #ost o$ maintainin& e#ess
in%entor.
LO
1-4
LO
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Cost Accounting in Marketing
Cost relationshi' mana&ement
-C!M is a sstem that allows
$irms to tar&et 'ro$itable
#ustomers b assessin& #ustomerre%enues and #osts.
=arrah
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Cost Accounting in Distribution
*utsour#in& o##urs when a $irm
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Cost Accounting inCustomer Service
"M is a mana&ement method
whi#h $o#uses on e#ellin& in all
dimensions.
Cost o$ ualit is a sstem that
identi$ies the #ost o$ 'rodu#in& low
ualit items.
"he em'hasis is 'la#ed on ualit.
ualit is de$ined b the #ustomer.
LO
1-4
LO
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Enterprise Resource Planning
In$ormation te#hnolo& linkin& %arious'ro#esses o$ the enter'rise into a sin&le
#om'rehensi%e in$ormation sstem
"e#hnolo&
Pur#hasin&
=uman
!esour#es
Marketin&
Produ#tion
)inan#e
LO
1-4
LO
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Key Financial Playersin an Organization
Chie$ $inan#ial
o$$i#er -C)*
Mana&es entire $inan#e
and a##ountin& $un#tion
Si&ns o$$ on $inan#ial
statements
Maor !es'onsibilities +am'le A#ti%ities"itle
LO
1-4
LO
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Ethical Issues for Accountants
"he desi&n o$ the #ost a##ountin& sstemhas the 'otential to be misused to de$raud
#ustomers, em'loees, or shareholders.
LO 1-5 nderstand ethi#al issues $a#ed b a##ountantsand was to deal with ethi#al 'roblems that ou$a#e in our #areer.
LO
1-5
LO
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Ethics
)ollow the Institute o$ Mana&ement A##ountants -IMA&uidelines:
C9A!I) the rele%ant issues and #on#e'ts b
dis#ussion with a disinterested 'art or #onta#t the
a''ro'riate #on$idential ethi#s >hotline.?
DISCSS #on$li#ts with the immediate su'erior, unless thesu'erior is in%ol%ed. I$ so, &o to the net authorit le%el.
C*@S9" an attorne about our ri&hts and
obli&ations.
LO
1-5
LO
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Sarbanes-Oxley Act of 2002
What is the
intentE
Who is
im'a#tedE
=ow are
#or'orations
im'a#tedE
Address 'roblemo$ #or'orate
&o%ernan#e
A##ountin& $irms
and
#or'orations
Cor'orate
res'onsibilit
O
1-5
LO
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Corporate Responsibility
ho is impacted!
hat is the impact!
F C+* 7 Chie$ +e#uti%e *$$i#er
7 Mana&es entire #or'orationF C)* 7 Chie$ )inan#ial *$$i#er
7 Mana&es a##ountin& and $inan#e
F "he o$$i#ers o$ the #or'oration must si&n the $inan#ial
re'orts sti'ulatin& that the $inan#ial statements do notomit material in$ormation.
F "he #om'an must dis#lose the e%aluation o$ their
internal #ontrols.
1-5
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Appendix: Institute of Management
Accountants Code of Ethics
"ompetence"ompetence "on#identiality"on#identiality
$ntegrity$ntegrity "redi%ility"redi%ility
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End of Chapter 1