Cost Accounting: Ch 1 The Manager and Management Accounting

Budget (5 Step Decison Making Process)
A quantitative expression of a proposed plan of action by management and is an aid to coordinating what needs to be done to execute that plan.

It is the most important planning tool when implementing a strategy.

A benchmark against which actual performance can be compared.

Chief Financial Officer
Also called the financial director in many countries – is the executive responsible for overseeing the financial operations of the orginization.
Control (5 Step Decision Making Process)
Comprises taking actions that implement the planning decisions, deciding how to evaluate performance, and providing feedback and learning to help future decision making.
Controller
Also called the Chief Accounting Officer is the financial executive primarily repsonsible for management accounting and financial accounting.
Cost Accounting
Accounting that measures, analyzes, and reports financial and nonfinancial information relating to the costs of aquiring and using resources in an organization.
Cost-Benefit Approach
The approach that relies on management accounting information to quantify expected benefits and expected costs although all benefits and costs are not easy to quantify.
Cost Management
The approaches and acitivities of managers to use resources to increase value to customers and to achieve organizational goals.
Customer Service (Value Chain)
Providing after-sales service to customers.
Design of Products and Processes (Value Chain)
Detailes planning, engineering, and testing of products and processes.
Distribution (Value Chain)
Processing orders and shipping products or services to customers. (also called outbound logistics)
Financial Accounting
Accounting that focuses on reporting to external parties such as investors, government agencies, banks, and suppliers.
Line Management
Management such as production, marketing, and distribution management directly responsible for attaining the goals of the orginization.
Management Accounting
Management that measures, analyzes, and reports financial and non-financial information that helps managers make decisions to fullfill the goals of the organization.
Marketing and Sales (Value Chain)
Promoting and selling products or services to customers or prospective customers.
Planning
Steps 1-4 of the 5 Step decision making process that include (1) identifying problems and uncertanties (2) obtaining information (3) making predictions abou the future (4) making decisions by choosing amoung alternatives.
Production (Value Chain)
Procurring, transporting and storing (inbound logistics), coordinating and assembling (operations), resources to produce a product or deliver a service.
Research and Development (Value Chain)
Generating and experimenting with ideas related to new products, services, or processes.
Staff Management
Management accountants and information technology and human-resources management, provides advice, support, and assistance to line management.
Strategic Cost Management
Describes cost managment that specifically focuses on strategice issues.
Strategy
Specifies how an organization matches its own capabilities with the opportunities in the market place to accomplish its objectives.
Supply Chain
Describes how the flow of goods, services, and information from the initial sources of materials and services to the delivery of products to consumers, regardless of whether those acitivies occur in the same organization or in other organizations.
Value Chain
The sequence of business functions in which customers usefullness is added to products.