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Managerial Accounting
Dr. Bobby dG. Gonzales

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COURSE OUTLINE
1) 2) 3) 4) 5) INTRODUCTION PROFIT PLANNING COST ANALYSIS ACTIVITY BASED COSTING AND MANAGEMENT SHORT-TERM DECISIONS AND ACCOUNTING INFORMATION

Dr. Bobby dG. Gonzales

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COURSE OUTLINE
6) 7) 8) 9) OPERATIONAL AND FINANCIAL BUDGETING CAPITAL BUDGETING RESPONSIBILITY ACCOUNTING DIVISIONAL PERFORMANCE MEASUREMENT CONTROL AND EVALUATION COST CENTERS

10) OF
Dr. Bobby dG. Gonzales

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COURSE OUTLINE
11) BALANCED SCORE CARD

Dr. Bobby dG. Gonzales

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REFERENCES
Managerial Accounting - Louderback and Holmen Managerial Accounting

- Shneider

Managerial Accounting - Anthony and Kaplan Management Control System

- Anthony and Govindarajan

Dr. Bobby dG. Gonzales

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Management Functions and Accounting Accoun

Planning is setting goals and developing strategies and tactics to achieve them. Control is determining whether goals are being met, and if not, what can be done.

Dr. Bobby dG. Gonzales

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Planning Planning
A value chain is the A Managerial value chain is the Managerial entire set of processes entire accountants prepare set of processes accountants prepare that transforms raw of the Much that Much budgeted financial transforms raw of the budgeted financial materials into finished provided materials information statements, often called into finished provided statements, often called information Long-term planning, by managerial products. Long-term planning, by managerial products. pro forma statements. pro forma statements. often called strategic often called strategic accountants is used in accountants is used in planning, is critical to planning, is critical decision making. to decision making. organizations. organizations.
Dr. Bobby dG. Gonzales

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Control Control
Performance evaluation Control reports

Dr. Bobby dG. Gonzales

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Managerial Accounting and Financial Accounting

Both managerial and financial accounting deal with economic events. Both require quantifying the results of economic activity. Both are concerned with revenues and expenses, assets, liabilities, and cash flows. Both involve financial statements. Both suffer from the difficulties of capturing, in quantitative terms, the many aspects of an economic event.
Continued Continued
Dr. Bobby dG. Gonzales

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Managerial Accounting and Financial Accounting

Managerial accounting reports are specifically designed for a particular user or a particular decision. Financial accounting is primarily historical. Managerial accounting is concerned more with the future. Managerial accounting has no external restrictions, such as generally accepted accounting principles. Financial accounting serves persons outside the firm, while managerial accounting serves persons inside the firm.
Dr. Bobby dG. Gonzales

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Background of Conventional Background of Conventional Manufacturing Manufacturing

American companies were the unchallenged world leaders in manufacturing following World War II. American companies had strong advantages in product quality, capacity, and distribution facilities. American firms could sell nearly anything they made. Production was the critical activity and the philosophy was to get it out the door.
Continued Continued
Dr. Bobby dG. Gonzales

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Background of Conventional Background of Conventional Manufacturing Manufacturing

American manufacturers adopted practices that reflected a just-in-case philosophy which led to large amounts of inventory, along with waste, scrap, and the reworking of defective units. Lead time or cycle times extended well beyond the time needed for the manufacturing process alone. A product that could be manufactured in one or two days took one or two months.

Dr. Bobby dG. Gonzales

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Just-in-Time (JIT) Just-in-Time (JIT)

Just-in-time (JIT) manufacturing is a philosophy that focuses on timing, efficiency, and quality in meeting commitments. Companies that employ JIT strive for continual improvement and relentlessly search out and eliminate waste of materials, time, and space.
Dr. Bobby dG. Gonzales

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Just-in-Time (JIT) Just-in-Time (JIT)

Under ideal conditions, purchased materials and components arrive just in time to be used. Partly assembled units arrive at work stations just in time for the next step in production. Finished units emerge from production just in time to meet the shipping date requested by the customer. Setup times are reduced by a flexible manufacturing system.
Dr. Bobby dG. Gonzales

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Just-in-Time (JIT) Just-in-Time (JIT)

Computer-integrated manufacturing (CIM) provides that a factory is virtually all automated and controlled by computer.

Dr. Bobby dG. Gonzales

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Conventional Manufacturing Conventional Manufacturing

Departments working on all products Single-skilled workers Large batches, erratic flows Some defects seen as inevitable Long production cycle Large inventories held as buffers Large deliveries at irregular intervals Achieve acceptable performance Design and manufacturing separate

Dr. Bobby dG. Gonzales

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JIT Manufacturing JIT Manufacturing

Manufacturing cells concentrating on one product Multiskilled workers Small batches, smooth flows Total quality control Short production cycle Zero or trivial inventories Daily delivery of materials/components Relentless search to improve, eliminate all waste Integrate design and manufacturing

Dr. Bobby dG. Gonzales

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Line Versus Staff Functions Line Versus Staff Functions

Managers of line functions are concerned with the primary operating activities of the organization-manufacturing (or buying) and selling a physical product or performing a service. A staff manager manages a department that serves other departments.

Dr. Bobby dG. Gonzales