Dit is een samenvatting voor het eindtentamen van het vak Management Accounting.
Het bevat:
- De hoofdstukken 1 t/m 21 van het boek: Management and cost accounting, 8th edition
- Extra theorie uit hoorcolleges
- Gastcollege Deloitte 2024
Geschreven in het engels
[Meer zien]
Laatste update van het document: 4 maanden geleden
Management and Cost Accounting : 8th edition
Chapter 1 : The manager and management accounting
Management accounting = measures, analyses, and reports financial
information and non-financial information that are intended primarily to assist
managers in fulfilling the goals of the organization
Broad differences between management accounting and financial accounting:
1. Regulations -> management accounting rapports are for internal use and are
therefore not restricted by any regulations
2. Range and detail of information -> management accounting rapports are
usually more detailed/descriptive since financial accounting rapports can be seen
by anyone (like competitors)
3. Reporting interval -> management accounting rapports are usually
produced more frequently than financial accounting rapports
4. Time period -> management accounting rapports include information from
the past, the present and the future whilst financial accounting rapports usually
only include past information
Cost accounting = measures and reports financial and non-financial information
related to the organization’s acquisition or use of resources
Cost management = the actions managers undertake in the short-run and long-
run planning and control of costs that increase value for customers and lower the
costs of products/services
Two broad strategies companies can follow:
1. Cost leadership = offering quality products/services for the lowest price
2. Product differentiation = offering differentiated/unique products/services
The major purposes of accounting systems:
1. Formulating overall strategies and plans
2. Resource allocation decisions such as product and customer emphasis and
pricing
3. Cost planning and cost control of operations and activities
4. Performance measurement and evaluation of people
5. Meeting external regulatory and legal reporting requirements where they exist
Planning = choosing goals, predicting results under various ways of achieving
those goals, and then deciding how to attain the desired goals
Control = the action that implements the planning decision and deciding on
performance, evaluation and the related feedback that will help future decision
making
Three traditional categories of management accountants functions:
1. Scorekeeping
= the accumulation of data and the reporting of reliable results to all levels of
management
-> increasingly undertaken by digital systems
, 2. Attention directing
= to make visible both opportunities and problems on which managers need to
focus
-> increasingly helped by digital systems
3. Problem solving
= the comparative analysis undertaken to identify the best alternatives in
relation to the organisation’s goals
-> lots of problems can already be solved by machines, but not all
Key themes of planning & control:
1. Customer focus
2. Value-chain and supply-chain analysis
3. Key success factors (Cost, Quality, Time, Innovation, Sustainability)
4. Continuous improvement and benchmarking
-> these factors help guide organisations with the design of a management
accounting system
Most significant challenge facing accountants today is the impact of digitalisation
-> it is changing the essence of accounting expertise in several ways:
1. Management accountants must play a role in unravelling what is happening
now, to a large degree by exploring big data, to determine the coming shape of
financial transactions
2. Executive action can increasingly be autopiloted such that financial objectives
are pursued back on machine-based decisions and action rather than through
human input
3. Accounting becomes part of the products being reported on
Two important points in relation to digital technologies:
1. Digital disruption and cognitive business
= digital technologies are impacting many industries and enabling new business
models
2. Data availability
= the huge volumes of data that has become available to firms has created both
opportunities and challenges in aiding data-backed decisions and insights
What emerging technologies are there today that management accounting
should be aware of?
- Artificial intelligence
- Blockchain -> accounting technology that can be described as a ‘distributed
ledger’, which records transactions continuously
- Big data and analytics
- the Cloud -> services where data are kept on servers connected to the internet
, Chapter 2 – An introduction to cost terms and purposes
Cost = a resource sacrificed or forgone to achieve a specific objective
Cost object = anything for which a separate measurement of costs is desired
Costing systems typically account for costs in two basic stages:
1. Accumulating costs by some natural classification (materials, labour, etc.)
2. Assigning these costs to the cost objects
Cost accumulation = the collection of cost data in some organised way through
an accounting system
Cost assignment = tracing and allocating accumulated costs to a cost object
Direct costs = related to the particular cost object and can be traced to it in an
economically feasible way
Indirect costs = related to the particular cost object but cannot be traced to it
in an economically feasible way
Factors affecting classification of a cost as direct or indirect:
1. The materiality of the cost in question
= when costs are high, it’s usually more feasible to classify it as a direct cost than
when the expenses are negligible
2. Available information-gathering technology
= more advanced technology is capable of enabling an increasing percentage of
costs to be classified as direct
3. Design of operations
= when an organization’s facility is used exclusively for one product, it’s easy to
assign the costs of that facility directly to that product
Cost-reduction efforts frequently identify two key areas:
1. Focussing on value-added activities
2. Efficiently managing the use of the cost drivers in those value-added activities
Variable costs = changes in total in proportion to changes in the related level of
activity/volume
Fixed costs = do not change in total despite changes in the related level of
activity/volume
-> there are some major underlying assumptions for these definitions:
1. Costs are defined as variable or fixed with respect to a specific cost object
2. The time span must be specified
3. Total costs are linear
4. There is only one cost driver
5. Variations in the level of the cost driver are within a relevant range (= the
, relationship between the cost and the volume has to be valid)
Total costs
Unit cost ( ¿ Average cost )=
Number of units
Three kinds of stock which are commonly found in manufacturing companies:
1. Direct materials stock
= stock that will be used in the manufacturing process
2. Work-in-process stock
= goods partially worked on but not yet completed
3. Finished-goods stock
= completed goods which are not yet sold
Three kinds of costs which are commonly found in manufacturing companies:
1. Direct materials cost
= acquisition costs of all materials that eventually become part of the cost object
and can be traced to the cost object in an economically feasible way
2. Direct manufacturing labour costs
= compensation of all manufacturing labour that can be traced to the cost object
in an economically feasible way
3. Indirect manufacturing costs / Manufacturing overhead costs
= all manufacturing costs that are related to the cost object, but cannot be
traced to that cost object in an economically feasible way
List of all ‘cost’ terms used:
• Capitalised costs = costs that are presumed to provide future benefits to the
company
-> they are first recorded as assets
• Revenue costs = costs which are recorded as expenses of the accounting
period when they are incurred
• Operating costs = all costs associated with generating revenues, other than
cost of goods sold
• Stock-related costs = all costs of a product that are considered assets in a
company’s balance sheet when the costs are incurred and that are expensed as
cost of goods sold only when the product is sold
• Period costs = all costs in the income statement other than cost of goods sold
• Prime costs = all direct manufacturing costs
• Conversion costs = all manufacturing costs other than direct material costs
Three different purposes for assigning different costs to a object:
1. Product pricing and product emphasis
= costs of all the areas of the value chain required to bring a product to a
customer should be included
2. Contracting with government agencies
= the government frequently provides detailed guidelines on the allowable and
non-allowable items in a product-cost amount
3. Financial statements
= focus on inventoriable costs
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