2009 Foster Business School Cost Accounting L.DuCharme 1 Introduction to Accounting 311 Student information sheets Syllabus Chapter 1 in text Words of wisdom for life & business

2009 Foster Business School Cost Accounting L.DuCharme 2 My Office Fees* Answers: 5 cents Solutions: 25 cents Advice: Priceless * Effective 1/1/2009

2009 Foster Business School Cost Accounting L.DuCharme 3 Advice Four things you need for business success: –1) Hard work –2) Network of relationships –3) A little luck –4) Reasonable intelligence

2009 Foster Business School Cost Accounting L.DuCharme 4 Cell Phones Turn cell phones OFF before class 1 st offense = $1 2 d offense = $5 You cannot afford a 3 d offense. During tests = $20/offense

2009 Foster Business School Cost Accounting L.DuCharme 5 Accounting  Is hard to do/understand without proper training/knowledge.  takes extensive exposure/practice to learn.

2009 Foster Business School Cost Accounting L.DuCharme 6 Accounting Areas (“Specialties”) Financial Audit Managerial Tax AIS Not-for-profit, Governmental All are interrelated. However, managerial is most important. Financial gets your foot in the door; managerial is needed in order to advance to the top of an organization!

2009 Foster Business School Cost Accounting L.DuCharme 7 Cost versus Managerial Accounting The same? Managerial Accounting: –Product/service costing –Planning & Control –Decision making

2009 Foster Business School Cost Accounting L.DuCharme 8 Financial versus Managerial Accounting What is the difference between the two?

2009 Foster Business School Cost Accounting L.DuCharme 9 Strategic Cost Management Developing strategy Building resources and capabilities Implementing strategy

2009 Foster Business School Cost Accounting L.DuCharme 10 Planning and Controlling Management DecisionManagement Accounting System Planning Control Performance Evaluation Budgets Accounting System Performance Reports Feedback

2009 Foster Business School Cost Accounting L.DuCharme 11 Planning and Controlling What is planning? Setting goals Predicting results Deciding how to attain goals

2009 Foster Business School Cost Accounting L.DuCharme 12 Planning and Controlling What is control? Deciding and taking actions Deciding on performance evaluation and feedback

2009 Foster Business School Cost Accounting L.DuCharme 13 Planning and Controlling What are budgets? They are quantitative expressions of a proposed plan of action. They aid in the coordination and implementation of the plan.

2009 Foster Business School Cost Accounting L.DuCharme 14 Planning and Controlling What are performance reports? These are reports that compare actual results with budgeted amounts. A single report that contains both financial and nonfinancial measures of performance is called a Balanced Scorecard.

2009 Foster Business School Cost Accounting L.DuCharme 15 Performance Report Example Budget Actual Variance Revenues$59,000$60,000$1,000 F Cost of goods sold 42,000 43,400 1,400 U Wages 6,700 7, U General 1, F Fixed costs 5,000 5,0000 Operating income$ 4,000$ 3,700$ 300 U Boone Shop, July 2008

2009 Foster Business School Cost Accounting L.DuCharme 16 Key Themes in Management Decision Making Customer Focus Value Chain and Supply Chain Analysis Key Success Factors: Cost and Efficiency, Time, Quality, Innovation Continuous Improvement and Benchmarking

2009 Foster Business School Cost Accounting L.DuCharme 17 Value Chain The term “value chain” refers to the sequence of business functions in which usefulness is added to the products or services of an organization. The term “value” is used because as the usefulness of the product or service is increased, so is its value to the customer.

2009 Foster Business School Cost Accounting L.DuCharme 18 Typical Value Chain R & D Design Production Marketing Distribution Service Management Accounting

2009 Foster Business School Cost Accounting L.DuCharme 19 3-Key Management Accounting Guidelines 1. Cost-benefit approach 2. Full recognition of behavioral as well as technical considerations 3. Using different costs for different purposes

2009 Foster Business School Cost Accounting L.DuCharme 20 Professional Ethics (very important to Management Accountants) Confidentiality Integrity Objectivity Competence

2009 Foster Business School Cost Accounting L.DuCharme 21 Ethical Guidelines The Institute of Management Accountants (IMA) is the largest association of management accountants in the United States. The IMA has issued a Standards of Ethical Conduct for Management Accountants. See Exh. 1-7 in text

2009 Foster Business School Cost Accounting L.DuCharme 22 Four- vs. Five-year Program CMA versus the CPA Page in text gives a very brief outline of the CMA exam. IMA web site =