Ch.

1
Management, the Controller
and Cost Accounting
Management
• Planning
• Organizing
• Control
• Authority
 Controller’s Participation in
Planning and Control
• The executive manager responsible for
accounting function
• Effective control depends on
communicating information to manager
(Management by exception)
• Provides information for Planning and
Control its activities
 The Cost Department

• Responsible forgathering, compiling, and

communicating information regarding to a
company’s activities
• Analyzes costs & issues performance
report and decision making data
• Coordinates with other departments
The Role of Cost Accounting
Furnishes management with necessary tools for planning
and controlling activities, improving quality and efficiency,
and making both routine and strategic decisions

• Budgeting
• Controlling Costs
• Pricing
• Determining Profits
• Choosing Among Alternatives
The Role of Cost Accounting
The collection, presentation, and analysis of information
regarding costs and benefits helps management to
accomplish the tasks:
1. Creating and executing plans and budgets
for operating under competitive conditions
2. Establishing costing methods that permit
control of activities, reductions of costs, and
improvement of quality
3. Controlling, product costing for inventory
valuation and pricing, and evaluating
4. Determining company costs and profit for
an annual accounting period
5. Choosing among alternatives that might
alter revenues or costs