STRATCOST LECTURES
Prof: Antonio Jaramillo Dayag
STRATEGIC COST MANAGEMENT
Management Accounting
 Is the process of identification,
measurement, accumulation,
analysis, preparation,
interpretation, and communication
of information of financial that
assists management in fulfilling
organizational objectives
o As well as non-financial
information
Financial Accounting
 Involves recordkeeping of business
transactions governed by GAAP
o Generally Accepted
Accounting Principles
 Leading to the preparation of
financial statements for use of
internal as well as external decision
makers
RELATIONSHIP OF COST
ACCOUNTING TO MANAGERIAL &
FINANCIAL ACCOUNTING
 Is a tool of both financial and
managerial accounting
 As part of , cost accounting for
manufacturing costs provides
information on which to base
inventory and cost of products sold
for incorporation in the financial
statements
 As part of , it provides information
to assist management in
controlling current operations and
in rational planning and decision-
making
OBJECTIVE OF MANAGEMENT
ACCOUNTING
Purpose:
 To provide information and
participate in the management
process
 They select and provide, to all levels
of management, information needed
in:
o Planning, evaluation and
controlling operations,
decision-making
o Safeguarding the
organization’s assets
o Communicating with interest
parties outside the
organization
 Such as shareholders
and regulatory bodies
SCOPE OF MANAGEMENT
ACCOUNTING
Scope:
 Has expanded beyond the
boundaries of traditional
accounting
 Its limits and the extent to which its
technology will expand are not
readily determinable at this point in
its development
 Management accounting is not
constrained by the conventions that
governed financial accounting
Management Accounting
 Is concerned primarily with
providing information to internal
managers who are charged with
planning and controlling the
operations of the firm and making a
variety of management decisions
 Generally, Management Accountants
for the following tasks
o **
 Enables both internal
and external parties to
 evaluate
organizational
performance and
position
o ***
 Of information that
helps manager to
focus on operational
problems,
opportunities as well
as inefficiencies
o ***
 Of the relative merits
of possible courses of
action as well as
recommendations as
to the best procedure
 Commonly associated
with non-recurring
decisions
 Specifically, the management
accountant provides a system which
allows management to receive the
necessary information used in
performing performing its
administrative functions
o