MA - Rajeev
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Transcript of MA - Rajeev
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Chapter 1
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Work of ManagementWork of Management
Directing andDirecting andMotivatingMotivating
PlanningPlanning
ControllingControlling
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Comparison of Financial & ManagerialComparison of Financial & ManagerialAccountingAccounting
Financial AccountingFinancial Accounting Managerial AccountingManagerial AccountingDefinition Accounting is an information
system that identifies recordsand communicates the economicevents of an organization tointerested user
Accounting system by whichinformation are presented andsupplied to management inappropriate manner to operatebusiness smoothly and efficiently
User External persons who makesfinancial decision
Managers who plan for and controlan organization
Time focus Historical perspective Future emphasisVerifiabilityversusrelevance
Emphasis on verifiability Emphasis on relevance forplanning and control
Precision Vs.timeliness
Emphasis on precision Emphasis on timeliness
Subject Primary focus is on the wholeorganization
Focuses on segments of anorganization
GAAP Must follow GAAP and prescribedformats
Need not follow GAAP andprescribed formats
Requirement Mandatory for external reports Not Mandatory
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Line positions are directly relatedLine positions are directly relatedto achievement of the basicto achievement of the basicobjectives of an organization.objectives of an organization.
Example: Production supervisors in aExample: Production supervisors in amanufacturing plant.manufacturing plant.
Staff positions support and assistStaff positions support and assistline positions.line positions.
Example: Cost accountants in theExample: Cost accountants in themanufacturing plant.manufacturing plant.
Line and Staff Line and Staff RelationshipsRelationships
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Just-in-time productionJust-in-time production Total qualityTotal quality
managementmanagement Process reengineeringProcess reengineering Theory of constraintsTheory of constraints
The Changing BusinessThe Changing BusinessEnvironmentEnvironment
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Just-in-Time (JIT) SystemsJust-in-Time (JIT) Systems
Complete productsjust in time to
ship customers.
Complete partsjust in time for
assembly into products.
Scheduleproduction.
Receive materialsjust in time for
production.
Receivecustomer
orders.
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JIT ConsequencesJIT Consequences
JIT purchasingJIT purchasingFewer, but more ultra reliableFewer, but more ultra reliablesuppliers.suppliers.Frequent JIT deliveries in small lots.Frequent JIT deliveries in small lots.Defect-free supplier deliveries.Defect-free supplier deliveries.
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Benefits of a JIT SystemBenefits of a JIT System
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TQM improves productivity by encouraging theTQM improves productivity by encouraging theuse of fact and analysis for decision making anduse of fact and analysis for decision making andif properly implemented, avoids counter-if properly implemented, avoids counter-productive organizational infighting.productive organizational infighting.
Total Quality ManagementTotal Quality Management(TQM)(TQM)
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Process Reengineering versus TQMProcess Reengineering versus TQM
Total QualityTotal Quality
ManagementManag ement1.1. Tweaks existingTweaks existingprocesses to realizeprocesses to realizegradualgradualimprovements.improvements.
2.2. Uses a teamUses a teamapproach involvingapproach involvingpeople who work people who work directly in thedirectly in the
process.process.
ProcessProcess
ReengineeringReeng ineering
1.1. RadicallyRadicallyoverhauls existingoverhauls existingprocesses.processes.
2.2. Likely to beLikely to beimposed from aboveimposed from aboveand to use outsideand to use outsideconsultants.consultants.
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Theory of ConstraintsTheory of Constraints
AA constraintconstraint (also called a(also called abottleneck bottleneck ) is anything that prevents) is anything that prevents
you from getting more of what youyou from getting more of what youwant.want.
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Chapter 2
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Manufacturing CostManufacturing Cost
Manufacturing cost are those cost thatManufacturing cost are those cost thatare used to manufacture goods directly.are used to manufacture goods directly.There are three types of manufacturingThere are three types of manufacturing
cost; which are:cost; which are:
1.1. Direct MaterialDirect Material2.2. Direct Labor Direct Labor 3.3. Manufacturing overheadManufacturing overhead
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Manufacturing Overhead
Manufacturing costs thatManufacturing costs that cannotcannot be tracedbe traceddirectly to specific units produced.directly to specific units produced.
Examples: Indirect materials and indirectlabor
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Nonmanufacturing CostsNonmanufacturing Costs
Administrative Costs
All executive,organizational,
and clerical costs.
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Cost Classifications for Predicting Cost Behavior Cost Classifications for Predicting Cost Behavior
How a cost will react toHow a cost will react tochanges in the level of changes in the level of activity within theactivity within the
relevant range.relevant range. TotalTotal variable costsvariable costs
change when activitychange when activitychanges.changes.
TotalTotal fixed costsfixed costs remainremainunchanged when activityunchanged when activitychanges.changes.
AA mixed costmixed cost is One thatis One thatcontains both variablecontains both variableand fixed cost elements.and fixed cost elements.
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Variable Cost
Your total texting bill is based on howmany texts you send.
Number of Texts Sent
Total Texting Bill
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Fixed CostFixed Cost
Your Your monthly contract feemonthly contract fee for your cell phone isfor your cell phone isfixed for the number of monthly minutes in your fixed for the number of monthly minutes in your contract. The monthly contract fee does not changecontract. The monthly contract fee does not change
based on the number of calls you make.based on the number of calls you make.
Number of Minutes UsedWithin Monthly Plan
Month
l y Cell Phone
Contract Fee
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Mixed Cost
In case of a Telephone billIn case of a Telephone bill Line RentLine Rent isis fixed costfixed cost andand Call ChargeCall Charge isisvariable cost.variable cost.
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