,Chapter 15
Financial accounting information is reported at fixed intervals in general purpose financial
statements. the statements are recorded according GAAP and used by external users such
as:
-shareholder
- creditos
- government
- general public
Managerial accounting information is designed to meet the specific need of a company’s
management, including the following
- Historical data: provides objective measures of past operations
- Estimated data: provides subjective estimate about the future operations
Managerial accounting reports do not always have to be:
- Prepared according GAAP
- Prepared at fixed intervals
- Prepared for the business as a whole
Managerial accounting in the organization departments in a company can be viewed as
having either of the following:
- Line responsibilities
- Staff responsibilities.
A line departement is directly involved in providing, goods or services to the customers
A staff department provides service, assistance and advice to the department with the line
or other staff responsibilities. (no direct authority.)
The controller is the chief of management. The controller's staff consist of a variety of other
accountants who are responsible for specialized accounting such as:
- taxes
- general accounting
- budget and budget analysis
- cost accounting
- system and procedure
- Special reports and analysis.
The management process has 5 basic phases:
- Planning
- Directing
- Controlling
- Improving
- Decision making
,Planning:
Management uses planning in developing the company's objectives (goals) and translating
these objectives into courses of action.
Planning can be classified as follows:
Strategic planning: developing long term actions (strategies) for about 5 to 10 years.
Operational planning: develops short term actions for managing day to day operations.
Directing:
The process of which managers run day to day operations is called directing.
Controlling:
Monitoring operating results and comparing actual results with the expected results is
controlling. This feedback allows management to isolate areas for further investigation and
possible remedial action. It may also head to revising future plans. The philosophy of
controlling by companies actual and expected results is called management by exception.
Improving:
Feedback is also used by managers to support continuous process development. That is
also the philosophy.
Decision making:
Inherent in each of the management processes is decision making.
Managerial accounting supports managers in all phases of the management process.
Manufacturing operations:
The operations of a business can be classified as service, merchandising or manufacturing.
Nature of manufacturing:
customer orders = making product = end
Direct and indirect costs
A cost is a payment of cash or the commitment to pay cash in the future for the purpose of
generating revenues.
a cost object is for what the costs are classified, cost identified with cost object are either
direct or indirect costs.
Direct costs are identified with and can be traced to a cost object.
Indirect costs are not identified and traced to a cost subject.
Manufacturing costs:
- Direct material costs
- Direct labour costs
- Factor overhead costs
, Cost behavior:
Cost behavior is the manner in which a cost changes as a related activity changes. This is
useful to managers for a variety of reasons, for example to predict profits as sales and
production volumes change. Understanding the behavior of a cost depends on the following:
- Identifying the activities that cause the cost to change these activities are called
activities bases.
- Specifying the range of activity over which the changes in the cos are of interest, this
range of activity is called the relevant range.
Variable costs:
are costs that vary in proportion to changes in the activity base. When the activity base is
units produced, direct materials and direct labour costs are normally classified as variable
costs. Variable costs have following characteristics:
- Cost per unit remains the same regardless of changes in the activity base.
- Total cost changes in proportion to changes in the activity base.
FIxed costs:
Are costs that remain the same in total dollar amount as the activity base changes. When
the activity base is units produced, many factory overhead costs such as straight line
depreciation are classified as fixed costs.
Fixed costs have the following characteristics:
- Cost per unit decreases as the activity level increases as the activity level decreases.
- Total cost remains the same regardless of changes in the activity base.
Direct material costs:
is the cost of any material that is an integral part of the finished product to be classified as a
direct material cost, the cost must be both of the following:
- an integral part of the finished product
- a significant portion of the total cost
Direct labour costs:
The cost of employee wages that is an integral part of the finished product is direct labour
cost. A direct labour cost must meet both:
- a integral part
- a significant portion
Factory overhead cost:
Costs other than direct materials and direct labour that incurred in the manufacturing
process are combined as factory overhead cost (or Manufacturing overhead / factory
burden) examples:
- heat and lighting
- repairing and maintaining equipment
- insurance of building
Voordelen van het kopen van samenvattingen bij Stuvia op een rij:
Verzekerd van kwaliteit door reviews
Stuvia-klanten hebben meer dan 700.000 samenvattingen beoordeeld. Zo weet je zeker dat je de beste documenten koopt!
Snel en makkelijk kopen
Je betaalt supersnel en eenmalig met iDeal, creditcard of Stuvia-tegoed voor de samenvatting. Zonder lidmaatschap.
Focus op de essentie
Samenvattingen worden geschreven voor en door anderen. Daarom zijn de samenvattingen altijd betrouwbaar en actueel. Zo kom je snel tot de kern!
Veelgestelde vragen
Wat krijg ik als ik dit document koop?
Je krijgt een PDF, die direct beschikbaar is na je aankoop. Het gekochte document is altijd, overal en oneindig toegankelijk via je profiel.
Tevredenheidsgarantie: hoe werkt dat?
Onze tevredenheidsgarantie zorgt ervoor dat je altijd een studiedocument vindt dat goed bij je past. Je vult een formulier in en onze klantenservice regelt de rest.
Van wie koop ik deze samenvatting?
Stuvia is een marktplaats, je koop dit document dus niet van ons, maar van verkoper meesphp. Stuvia faciliteert de betaling aan de verkoper.
Zit ik meteen vast aan een abonnement?
Nee, je koopt alleen deze samenvatting voor €7,98. Je zit daarna nergens aan vast.
