Chapter 1: Cost Accounting_Information for Decision Making Flashcards
To understand Value Creation in Organizations, Accounting Systems, The Manager's Job, Cost Accounting, Ethical Issues.
Is part of set of activities that transforms raw resources into goods and services to end user.
Value chain
The creation and development of ideas related to new products, services or processes.
Research and Development
The process of delivering products or services to customers.
Distribution
The process of informing potential customers about the attributes of products or services that leads to their sale.
Marketing and Sales
The acquisition of goods and services needed to produce a good or service
Purchasing
The collection and assembly of resources to produce a product or deliver a service.
Production
The detailed development and engineering of products, services, or processes.
Design
Firms buy resources from suppliers.
Supply Chain
Firms also sell their products to distributors and customers.
Distribution Chain
is designed for decision makers who are not directly involved in the daily management of the firm.
Financial Accounting
Designed for managers
Cost Accounting
Is commonly used in developing financial accounting information, but we are concerned primarily with its use by managers to make decisions.
Cost Accounting
Products are assembled or services are performed, information is needed to control and improve operations.
Production Level
This information is more strategic in nature and typically is provided on a monthly, quarterly, or annual basis.
Executive Level
Financial information is used to assess the company’s overall performance.
Executive Level
Where managers supervise work and make operating decisions, cost information is used to identify problems by highlighting when some aspect of operations is different from expectations.
Middle management level
Manages liquid assets; Conducts business with banks and other financial institutions; Oversees public issues of stock and debt.
Treasurer
Plans and designs information and incentive systems.
Controller
Manages entire finance and accounting function
Chief Financial Officer (CFO)
Who must work with the users (or customers) of cost accounting information to provide the best possible information for managerial purposes.
Cost accountant
Records, measures, estimates, and analyzes costs; Works with financial and operational manager to provide relevant information decisions.
Cost Accountant
Ensures compliance with laws, regulations, and company polices and procedures; Provides consulting and auditing services within the firm.
Internal Auditor
Why do managers want to eliminate nonvalue-added activities?
activities cause costs.
The concept of considering both the cost and benefits of a proposal.
Cost-benefit analysis
