Managerial Accounting
accounting used to provide information and analyses to managers inside the
organization to assist them in decision making
based on cost benefit analysis NOT GAAP
Future oriented (budget for 2019 prepared last year)
Financial Accounting
has a focus on the financial ...
✓ accounting used to provide information and analyses to managers inside the
organization to assist them in decision making
✓ based on cost benefit analysis NOT GAAP
✓ Future oriented (budget for 2019 prepared last year)
Financial Accounting
✓ has a focus on the financial information that is given to external parties:
Past oriented: reports on 2018 performance prepared in the following year
GAAP and certified by external, independent auditors.
cost accounting
✓ measures, analyzes and reports financial and nonfinancial information related to the
costs of acquiring or using resources in an organization
financial or managerial accounting?
✓ help managers make decision to fulfill an organizations goals
who are the primary users in management accounting?
✓ managers of the organization
who are the primary users in financial accounting?
✓ external users such as investors banks regulators and suppliers
Time span and type of reports-management accounting
Time span and type of reports- financial accounting
✓ annual and quarterly financial reports, primarily on the company as a whole
two strategies management accounting
✓ cost leadership and product differentiation
Strategic Cost Management
✓ cost management that specifically focuses on strategic issues
Cost Leadership
✓ a strategy that aims to provide a product or service at as low a price as possible to
a broad audience
Management Accounting Information
✓ who are the best customers and how can we deliver value to them?
what substitutes exist and how do they differ from our own?
most critical capability?
got enough cash, or need more?
Value Chain
✓ the sequence of business functions in which a product is made progressively more
useful to customers.
Research & development
Design of Products and Processes
Production
Marketing
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