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Summary Business Economics IBM
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Concrete summary of the Business Economics course.
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Gedownload door Iman Van De Perre,Table of Contents
CHAPTER 1: MANAGERIAL ACCOUNTING, THE BUSINESS ORGANIZATION AND
PROFESSIONAL ETHICS.........................................................................................4
MANAGEMENT ACCOUNTING AND YOUR CAREER.................................................................................4
Management accounting Financial accounting...................................................................5
ROLES OF ACCOUNTING INFORMATION............................................................................................. 5
Information for decision making and planning and controlling...........................................7
1. MANAGEMENT BY EXCEPTION..................................................................................................... 8
COST-BENEFIT AND BEHAVIORAL CONSIDERATION............................................................................10
PLANNING AND CONTROL FOR PRODUCT LIFE CYCLES AND THE VALUE CHAIN.........................................11
Product life cycle.............................................................................................................. 11
The value chain................................................................................................................ 12
ACCOUNTING POSITION IN THE ORGANIZATION.................................................................................14
Controller and treasurer functions....................................................................................14
controller Treasurer.......................................................................................................... 15
CUURENT TRENDS IN MANAGEMENT ACCOUNTING.............................................................................15
ADAPTION TO CHANGE............................................................................................................... 16
2. ETHICAL CONDUCT FOR PROFESSIONAL ACCOUNTANTS..................................................................19
CHAPTER 2: INTRODUCTION TO COST BEHAVIOR AND COST-VOLUME-PROFIT
RELATIONSHIP...................................................................................................20
1. IDENTIFYING ACTIVITIES, RESOURCES, COST AND COST DRIVERS......................................................20
2. VARIABLE-COST AND FIXED-COST BEHAVIOR...............................................................................22
3. COST BEHAVIOR: FURTHER CONSIDERATIONS..............................................................................22
3.2. STEP- AND MIXED-COST BEHAVIOR PATTERNS...........................................................................23
4. COST-VOLUME-PROFIT ANALYSIS...............................................................................................25
ADDITIONAL USES OF CVP ANALYSIS.............................................................................................27
5. CONTRIBUTION MARGIN AND GROSS MARGIN...............................................................................28
TARGET NET PROFIT:.................................................................................................................. 29
NON PROFIT APPLICATION........................................................................................................... 29
CHAPTER 3: MEASUREMENT OF COST BEHAVIOR..................................................30
1. COST DRIVERS AND COST BEHAVIOR......................................................................................... 30
2. MANAGEMENT INFLUENCE ON COST BEHAVIOR.............................................................................30
3. COST FUNCTION.................................................................................................................... 34
4. METHODS OF MEASURING COST FUNCTIONS................................................................................36
Advantage:....................................................................................................................... 37
Disadvantage:................................................................................................................... 37
CHAPTER 4: COST MANAGEMENT SYSTEMS AND ACTIVITY-BASED COSTING...........38
COST MANAGEMENT SYSTEM........................................................................................................ 39
1. COST ACCOUNTING SYSTEM..................................................................................................... 39
2. COST TERMS USED FOR STRATEGIC DECISION MAKING AND OPERATIONAL CONTROL PURPOSES..............41
2.2. PURPOSE OF COST ALLOCATION.............................................................................................43
3. COST TERMS USED FOR EXTERNAL REPORTING PURPOSES..............................................................45
4. TRADITIONAL AND ACTIVITY-BASED COST ACCOUNTING SYSTEMS.....................................................47
CHAPTER 5: RELEVANT INFORMATION FOR DECISION MAKING WITH A FOCUS ON
PRICING DECISIONS............................................................................................53
1. CONCEPT OF RELEVANCE........................................................................................................ 53
1.4. RELEVANCE OF ALTERNATE INCOME STATEMENTS......................................................................55
2. PRICING SPECIAL SALES ORDERS............................................................................................... 59
3. INFLUENCES ON PRICING IN PRACTICE........................................................................................60
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, 4. COST-PLUS PRICING............................................................................................................... 62
5. TARGET COSTING DEFINITION................................................................................................... 62
CHAPTER 8: FLEXIBLE BUDGETS AND VARIANCE ANALYSIS...................................65
1. USING BUDGETS AND VARIANCES TO EVALUATE RESULTS...............................................................65
1.2. STATIC BUDGETS VS FLEXIBLE BUDGET...................................................................................66
2. REVENUE AND COST VARIANCES...............................................................................................69
3. THE ROLE OF STANDARDS IN DETERMINING VARIANCES.................................................................70
4. FINDING EXPLANATIONS FOR VARIANCES....................................................................................71
5. MORE DETAILED ANALYSIS OF FLEXIBLE-BUDGET VARIANCES...........................................................73
6. VARIABLE-OVERHEAD SPENDING AND EFFICIENCY VARIANCES..........................................................76
CHAPTER 16: UNDERSTANDING CORPORATE ANNUAL REPORTS: BASIC FINANCIAL
STATEMENTS...................................................................................................... 78
1. CLASSIFIED BALANCE SHEET.................................................................................................... 78
1.1. NONCURRENT ASSETS: PROPERTY, PLANT AND EQUIPMENT..........................................................84
2. INCOME STATEMENT, STATEMENT OF EARNINGS, PROFIT & LOSS STATEMENT, STATEMENT OF PROFIT OR
LOSS...................................................................................................................................... 93
2.2. REVENUES AND EXPENSES.................................................................................................... 93
3. STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY...................................................................97
4. RELATIONSHIP BETWEEN BALANCE SHEET AND INCOME STATEMENT.................................................98
5. THE ANALYTICAL POWER OF THE BALANCE SHEET EQUATION...........................................................98
6. ANNUAL REPORT................................................................................................................... 99
CHAPTER 17: UNDERSTANDING AND ANALYZING CONSOLIDATED FINANCIAL
STATEMENTS.................................................................................................... 100
1. ANALYSIS OF FINANCIAL STATEMENTS......................................................................................100
WHAT IS A RATIO?.................................................................................................................. 100
2. COMPONENT PERCENTAGE..................................................................................................... 101
3. USES OF RATIOS................................................................................................................. 103
FINANCIAL RATIOS TYPES................................................................................................... 104
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, CHAPTER 1: MANAGERIAL ACCOUNTING, THE BUSINESS
ORGANIZATION AND PROFESSIONAL ETHICS
-Principal of economics:
the use of limited resources to make unlimited needs to maximize profits -> unlimited
needs vs limited resources bv: we want a big car, big house, vacation -> unlimited money
-business economics is a part of economics
Definition Cost is the translation of the usage of your resources -> you need to pay for your
employees, materials
Limited resources: raw materials (anything you use in your company), fixed assets, labor,
capital, time, …
Main objective: max output with min use of resources
MANAGEMENT ACCOUNTING AND YOUR CAREER
Accounting information system definition: process of gathering, organizing & communicating
financial info
Users:
-Management accounting definition:
-> process of identifying, measuring, accumulating, analyzing, preparing, interpreting, and
communicating information that helps managers fulfill organizational objectives.
-Financial accounting definition:
-> producing information for external parties such as: stockholders, banks, banks, authorities
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