Chapter 1 - Overview of Cost Management and Strategy Flashcards
Is a set of policies, procedures and approaches to business that produce long-term success
Strategy
Involves the development of a sustainable competitive position
Strategic Management
Involves the development of cost management information to facilitate the principal management function which is strategic managent
Strategic Cost Management
Is the information that the manager needs to effectively manage the firm, profit-oriented as well as not-for-profit organization
Cost management information
Is the practice of accounting in which the accountant develops and uses cost management information
Cost Management
Cost management information, is thus a ________________
Value added concept
Takes place when mid-level managers monitors the activities of operating-level managers and employers
Operational Control
Is the evaluation of mid-level manager by upper-level manager
Management control
Are the accounting professionals who develop and analyze cost management information and other accounting information
Management Accountants
Involves the application of appropriate techniques and concepts to economic data so as to assist management in establishing plans for reasonable economic objectives and in the making of rational decisions with a view toward achieving these objectives.
Management Accounting
Generally, management accountants do the following tasks:
- Scorekeeping or data accumulation
- Interpreting and reporting of information
- Problem-solving or quantification of the relative merits of possible courses of action
Management accountants continually face resource-allocation decisions. The ____________ should be used in making these decisions
Cost Benefit Approach
Management accountant provides a system which allows management to receive the necessary information used in performing its administrative functions of:
- Planning
- Controlling
- Decision Making
A key activity for all companies is
Planning
Involves identifying alternatives and selecting a course of action and specifying how the action will be implemented to further the organization’s objectives.
Planning
The plans of management are often expressed formally in
Budgets
Is achieved by evaluating the performance of managers and the operations for which they are responsible
Control
The report used to evaluate the performance of managers and the operations they control are referred to as
Performance reports
Is a systematic set of procedures for recording and reporting measurements of cost of manufacturing goods and performing services in the aggregate and in detail.
Cost accounting
needs the output of cost accounting. Its purpose is to provide managers with information which aids decision.
Cost management
Is a “game plan” that enables the company to attract customers by distinguishing itself from competitors.
Strategy
Companies that adopt this strategy are in essence saying “You should choose us because we can customize our products and services to meet your individual needs better than our competitors”
Customer Intimacy Strategy
Companies that adopt this strategy are in essence saying “You should choose us because we deliver products and service faster, more conveniently, and at a lower price than our competitors”
Operational Excellence
Companies that adopt this strategy are in essence saying “You should choose us because we offer higher quality products than our competitors”
Product Leadership
Is a process used by an entity to identify those risks and develop responses to them that enable it to be assured of meeting its goals
Enterprise Risk Management
Is a concept where business organizations consider the needs of all stakeholders when making decisions.
Corporate Social Responsibility (CSR)
Is a series of steps that are followed in order to carry out some tasks in business.
Business Process
Is often used to describe how an organization’s functional departments interact with one another to form business processes.
Value Chain
Is a management approach that organizes resources such as people and machines around the flow of business processes and that only produces units in response to customer orders
Lean Production
Refers to motivation that comes from within one’s self.
Internal motivation
Such as bonus compensations, are given by many organizations to highlight important goals and to motivate employees to achieve them
External Incentives
Leaders should be aware that all people should possess this, such as promoting false assertion that can adversely affect planning, controlling and decision making
Cognitive Bias
