UNIT 1 - Management Accounting Overview

Question 1

Key aspects of Management Accounting vs Financial Accounting

Answer 1

• Process accounting data for making reports that are useful for internal decisions.
• It is not subjective to extensive regulation. (not mandatory)
• MAC info is not comparable between different companies.
• MAC needs focus (info must be targeted toward the specific management task) and relevance (info must fit manager’s need).

Question 2

What is Management accounting?

Answer 2

it is the process of identifying, measuring, analysing, interpreting and communicating info in pursuit of an organization’s goals. The management accountant just helps the manager to make informed decisions to achieve organization’s goals.

Question 3

What are the typical company goals?

Answer 3

• Security: Propensity to take risks
• Liquidity: Ability to pay debt
• Profitability: Generating monetary surplus
• Independence: Freedom of entrepreneurial disposition
• Value generation: creating wealth

Question 4

What are the MAC Tasks?

Answer 4

are Value drivers (revenues, costs, quality) + typical tasks (planning, managing, controlling) + Objects (resources, products, divisions) = e.g. planning cost for resource “staff”

Question 5

MAC for logistics and SCM

Answer 5

• it plans SC cooperation and help identifying suitable cooperative partnership (it is not just dealing with your suppliers, it is sharing same goals, sharing info, tasks, resources, etc)
• it analyses SC environment.
• it ensures info flow between SC partners and within partner’s organization.
• it support order fulfilment (allocate tasks and costs among SC partners, develop coordination tools and trust).
• it measures the entire SC and individual partners.

Question 6

MAC for SC vs. MAC for Logistics

Answer 6

• SC MAC: Cross-company; integrates material, info and monetary flows; Main management object is cost, performance and cooperation.
• Logistics Mac: Focused on single company; on material flows, main management object is cost and performance.

Question 7

What challenges and problems would you expect?

Answer 7

• Identifying new suppliers and negotiating contracts with them.
• Finding the best win situation for us.
• Monitoring the contribution of each SC partner to overall success.
• Not skipping any scope with the partners.
• Planning future demand and preparing SC capacity for it.
• Having an accurate forecast that reduces leftovers.