Introduction

:
CHAPTER
The Role,
History, and
Direction of
Management
Accounting

Objectives
1. Discuss the need for management accounting
information.
2. Differentiate between management accounting and
financial accounting.

The managerial accounting system has three broad objectives:

1. To provide information for costing out services, products,
and other objects of interest to management.

planning, controlling,
2. To provide information for
evaluating, and continuous improvement.

3. To provide information for decision making.

Management Accounting Information System Collecting Special Reports Measuring Product Costs Storing Customer Costs Analyzing Budgets Economic Reporting Performance Reports Events Managing Personal Communication Inputs Processes Outputs Users .

Controlling Decision Making . Management Process The Management Process is defined by the following activities: Planning requires setting objectives and identifying Planning methods to achieve those objectives.

Controlling Decision Making . Management Process The Management Process is defined by the following activities: Controlling is the managerial activity of monitoring a plan’s Planning implementation and taking corrective action as needed.

Controlling Decision Making . Management Process The Management Process is defined by the following activities: Planning Control is usually achieved with the use of feedback.

Management Process Feedback is information that can be used to evaluate or correct the steps being taken to implement a plan. .

Management Process The Management Process is defined by the following activities: Planning Decision making is the process of Controlling choosing among competing alternatives. Decision Making .

setengah tahunan. bervariasi dari harian kuartalan. Biasanya Rentang waktu Fleksibel. dan sampai periode 10 tahun tahunan Dibatasi oleh prinsip akuntansi Kriteria bagi informasi Tidak ada batasan.Differentiate Between Management Accounting and Financial Accounting Akuntansi keuangan Perbedaan pokok Akuntansi manajemen Para manajer puncak dan pihak Pemakai laporan akuntansi Para manajer dari berbagai luar perusahaan jenjang organisai Perusahaan secara keseluruhan Lingkup informasi Bagian perusahaan Berorientasi pada masa yang lalu Fokus informasi Berorientasi pada masa yang akan datang Kurang fleksibel. memandang berterima umum akuntansi asas manfaat dan biaya Ilmu ekonomi Disiplin sumber Ilmu ekonomi dan psikologi sosial Ringkasan perusahaan scr Isi laporan Bersifat rinci mengenai bagian keseluruhan dari perusahaan Ketepatan informasi merupakan Sifat informasi Unsur taksiran dalam informasi hal yang penting adalah besar .

Explain the importance of ethical behavior for managers and management accountants. Describe the role of management accountants in an organization. EXERSICE 1 1. 3. 2. 5. Explain a brief historical description of management accounting. Identify the current focus of management accounting. 4. . List three forms of certification available to management accountants.

BASIC CONCEPTS OF MANAGEMENT ACCOUNTING .

& explain why there are different product cost definitions. Define tangible. Prepare income statements for manufacturing & service organizations. 4. LEARNING OBJECTIVES 1. Outline differences between functional-based and activity-based management accounting systems. Describe the cost assignment process. 2. . 3. intangible products.

” . COST: DEFINITION “Cost is the cash or cash-equivalent value sacrificed for goods and services that is expected to bring a current or future benefit to the organization.

OPPORTUNITY COST “Opportunity cost is the benefit given up or sacrificed when one alternative is chosen over another.” .

project.COST OBJECT “A cost object is any item such as product. activity & so on. to which costs are measured and assigned.” . customer.

” . “It is better to be approximately correct than precisely inaccurate.Is there such a thing as TRUE COST? NO.

and accept or reject special orders .Unit cost is the total cost associated with the units produced divided by the number of units produced. Unit cost is used for-- Inventory valuation Income determination Providing input to a variety of decisions such as pricing. make or buy.

and manufacturing overhead. direct labor. This definition is required for external financial reporting.Product cost is often defined as the sum of direct materials. .

measurement systems are assigns the actual costs of direct materials and direct labor to products. however. Cost measurement consists of determining the dollar amounts of direct materials. direct labor. overhead cots are assigned to products using predetermined rates (normal costing). direct labor. . and overhead used in production. assigns the actual costs of direct materials. Two possible and overhead to products (actual costing).

Budgeted (estimated) cost Estimated activity usage Units produced Direct labor hours Direct labor dollars Machine-hours Direct material dollars . A predetermined overhead rate is a rate based on estimated data.

The total overhead assigned to actual production is called applied overhead. Applied Overhead rate overhead = x Actual activity output .

with the units produced is called cost assignment. once measured.The process of associating the costs. Cause & effect relationship when assigning costs to cost objects: • Direct costs are easily traceable • Indirect costs not so easily traceable .

Cost Assignment Methods Cost of Resources Direct Driver Allocation Tracing Tracing Physical Causal Assumed Observation Relationship Relationship Cost Objects .

LO 2 Tangible products are goods produced by converting raw materials. hamburgers Services are intangible products. Example: televisions. Example: dental or medical care. Services differ from products on 4 dimensions Intangibility Perishability Inseparability Heterogeneity 25 .

distributing & servicing. LO 2 COST ANALYSIS & INTERNAL VALUE CHAIN Different costs for different purposes Strategic profitability analysis Uses all costs & revenues associated with product Short run (tactical) profitability analysis Uses production. marketing. especially for special orders External financial reporting Uses only production costs 26 .

LO 2 STRATEGIC PROFITABILITY ANALYSIS 27 .

TACTICAL PROFITABILITY ANALYSIS 28 .

LO 2 EXTERNAL FINANCIAL REPORTING 29 .

LO 3 INCOME STATEMENT: MANUFACTURING FIRM EXHIBIT 2-5 30 .

Can you name 2 ways to design a management accounting system? Functional based accounting (FBM) & activity based accounting (ABM) are 2 ways to design a management accounting system. .

Functional-Based Unit Activity Overhead Driver Costing System Activity-Based Unit & Non Unit Activity Driver .

Define the differences between FBM and ABM . Find the profit and loss report of service. and manufacturing company and define the difference among them. EXERSICE 2 1. 2. merchandising.