Samenvatting Management Accounting colleges
Hoorcollege 1
Wat is MA?
- Management accounting measures and reports financial and non-financial information and helps
and motivates managers to make good decisions to fulfil an organization’s goals.
Management accounting is a value-adding continuous improvement process of planning, designing,
measuring and operating both nonfinancial information systems and financial information systems
that guides management action, motivates behavior, and supports and creates the cultural value
necessary to achieve an organization’s strategic, tactical, and operating objectives.
Cost accounting measures and reports financial and non-financial data that relates to the cost of
acquiring or consuming resources by an organization.
- Management accounting is belangrijk om de link tussen strategie en financiële controle te
versterken. MA kan expertise inzetten om scenario’s of strategische opties te vergelijken.
MA: 2 rollen
Decision facilitating
- Voorbeeld: Start-ups 36% van de bedrijven gaat failliet binnen 2 jaar na opstart.
- Zwak business plan
- Tekort aan cash
- Prijs en kostprijs problemen
- Management accounting is belangrijk om de link tussen strategie en financiele controle te
versterken. MA kan expertise inzetten om scenarios of strategische opties te vergelijken.
Decision facilitating: Cost Accounting and Cost Management
Business owners and managers are faced with countless decisions every business day. Management
accounting uses information from operations to produce reports that provide ongoing insight to
business performance, such as profit margin and labor utilization, so managers have data-driven
input to make everyday decisions. Businesses can leverage this powerful trove of calculations to
improve decision-making over time for higher profitability and greater competitive advantage.
- Cost Accounting: Job costing, Process Costing, Cost allocations
- Make or buy decisions: Outsource or do we do it yourself?
- Relevant cost decisions: new investment or stick to old technology?
- Break-even analysis: What should I sell to make money
- Budget reports, balances scorecards to see where we improve
Decision influencing
Decision influencing: Guide people towards creating value for firm
- Motivating employees: management accounting provides a selection of best alternative
methods of doing things. It motivates employees to improve their performance by setting
targets and using incentive schemes
, - Coordinating among departments: management accounting is helpful in coordinating the
departments of an organization by applying thorough functional budgeting and providing
reports for the same to the management on a regular basis
- Controlling performance: in order to assure effective control, various techniques are used by
a management accountant such as budgetary control, standard costing, management audit,
etc. Management accounting provides a proper management control system to the
management. Reports are provided to the management regarding the effective and efficient
use of resources.
MA in actie
- Planning: Decide on company’s goals, decide how to attain these goals, plan resource usage
and allocation, predict results
- Decision making (facilitating): Cost accounting decisions
• Costs for inventory and external reporting
• Cost accounting for important decisions to assist marketing, operations
➢ Evaluation profitability of products, customers etc.
➢ Cost data for pricing, quality investments, outsourcing decisions
➢ Cost reduction, break-even for start-ups or new ventures
- Decision control (influencing): Management control – Evaluation towards goals
• Translate plans into concrete actions -> budgets, responsibility centers
• Deviations of operations against original plan -> variance analyses, BSC
• Performance management and evaluation -> bonus/compensation
Hoorcollege 2
Wat zijn ‘kosten’?
- “Resource sacrificed to achieve a given objective”
Part of cost = giving up an alternative
Also called ‘opportunity cost’
- Usually expressed in monetary terms
- Goals: Find out the true costs (e.g. of producing a car)
Crucial for decision making!
,Responsibility accounting
If decentralized organization structure -> responsibility centers
Different types of responsibility centers
- Cost center: Accountable for costs
- Revenue center: Accountable for costs
- Profit center: Accountable for revenues and costs
- Investment center: Accountable for revenues, costs and investments
Responsibility accounting
Choice of responsibility centers is based on the controllability principle = keep managers/employees
accountable for the items they can control
Idea:
Who has the best information/knowledge to explain deviations from tagets?
➔ Not: Who can we blame for deviations from targets?
Introductie m.b.t. kosten
- Welke ‘kosten’ bestaan er?
Cost object
Cost object = ‘thing’ for which cost information is needed
Examples:
- Products or product lines
- Departments or business unit
- Projects or programs
- Service
- Activity or process
- Customers
- …
Depends on individual situation or interest!
➔ Cost accumulation -> stage 1 -> Bookkeeping
➔ Cost assignment -> stage 2 -> Tracing and allocating
, Complex: assigning to departments (cost object) is already difficult, to the product level even more
complex e.g. Philips, Siemens
Direct vs. indirect costs
Indirect/direct -> Depends on cost of object
E.g. wage production manager direct if cost object is prod. Department. Wage production manager
indirect when cost object is product (e.g. car)
Variable vs. Fixed -> not the same as direct vs. indirect
Variable vs. Fixed costs (Var/Fix <-> Dir/Ind)
Do costs vary proportionally with quantity or are they independent of the quantity?
