1. Managerial Accounting: An Introduction To Concepts, Methods, And Uses Chapter 4 Strategic Management of Costs, Quality, and Time Maher, Stickney and Weil

2. Learning Objectives (Slide 1 of 2)  Distinguish between the traditional view of quality and the quality-based view.  Define quality according to the customer.  Compare the costs of quality control to the costs of failing to control quality.  Explain why firms make trade-offs in quality control costs and failure costs.

3. Learning Objectives (Slide 2 of 2)  Describe the tools firms use to identify quality control problems.  Explain why just-in-time requires total quality management.  Explain why time is important in a competitive environment.  Explain how activity-based management can reduce customer response time.  Explain how traditional managerial accounting systems require modifications to support total quality management.

4. Explain Traditional Versus Quality-Based View

5. What is quality according to the customer?

6. List Some Examples of Performance Measures

7. Quality Control  Improving quality may be costly, but failing to improve quality may be equally costly  Costs of controlling and improving quality include what?

8. Prevention Costs What are some prevention costs?

9. Appraisal Costs  Costs to detect individual units of products that do not conform to specifications include:

10. Costs of Failing to Control & Improve Quality (Slide 1 of 2)  Internal failure costs - costs of detecting nonconforming products and services before delivery to customers  Scrap  Rework to correct defects  Reinspection/retesting after completing rework

11. Costs of Failing to Control & Improve Quality (Slide 2 of 2)  External failure costs - costs of detecting nonconforming products and services after delivery to customers  Warranty repairs  Product liability resulting from product failure  Marketing costs to improve tarnished company image  Lost sales from customer dissatisfaction

12. Identifying Quality Problems  Signals provided by these tools may be:  Warnings - indicate that something is wrong  Diagnostic- suggest cause of problem and possible solutions

13. Explain Control Charts

14. Discuss Pareto Charts

15. Review Cause-and-Effect Analysis

16. JIT and Total Quality Management  Just-In-Time philosophy requires high quality standards  System must immediately correct problems resulting in defective units  JIT helps prevent production problems from going undetected  Also requires a smooth production flow without downtime to correct problems

17. Importance of Time in a Competitive Environment  Competitive markets demand shorter new-product development and more rapid response to customers  Customer response time falls into two categories:  New-product development time  Operational measures of time

18. Comment on New-Product Development Time

19. What is break-even time?

20. What are operational measures of time?

21. Activity-Based Management to Improve Customer Response Time  ABM helps improve customer response time by identifying :  Activities that consume the most resources, both in dollars and time  Non-value-added activities

22. Describe Customer Response Time

23. Balanced Scorecard  Reports an integrated group of financial and nonfinancial performance measures, includes the following four areas  Financial  Internal business processes  Learning and Growth  Customer

24. Draw a Balanced Scorecard & Include Sample Measures

25. Review Total Quality Management

26. If you have any comments or suggestions concerning this PowerPoint Presentation for Managerial Accounting, An Introduction To Concepts, Methods, And Uses, please contact: Dr. Michael Blue, CFE, CPA, CMA blue@bloomu.edu Bloomsburg University of Pennsylvania