MGMT 201: Chapter 1 Notes
MGMT 201: Chapter 1 Notes MGMT 201
Popular in Managerial accounting
verified elite notetaker
Popular in Business, management
This 3 page Class Notes was uploaded by Zach Weinkauf on Friday January 22, 2016. The Class Notes belongs to MGMT 201 at Purdue University taught by David Scott in Spring 2016. Since its upload, it has received 142 views. For similar materials see Managerial accounting in Business, management at Purdue University.
Reviews for MGMT 201: Chapter 1 Notes
Report this Material
What is Karma?
Karma is the currency of StudySoup.
You can buy or earn more Karma at anytime and redeem it for class notes, study guides, flashcards, and more!
Date Created: 01/22/16
Lecture 1: January 12, 2016 Chapter 1 – The Changing Role of Managerial Accounting in a Dynamic Business Environment What is Managerial Accounting? Managerial Accounting is the process of: ∆ Identifying ∆ Measuring ∆ Analyzing ∆ Interpreting ∆ Communicating Is Managerial Accounting Just For Accountants? No – you are already a manager of your everyday life. ∆ Managerial Accounting is an integral part of the management process and managerial accountants are important strategic partners in an organization’s management team. What do Managers do Every Day? The day-to-day work of a manager centers around 4 basic activities: ∆ Planning Setting goals and objectives for the company and determine how to achieve them. Ex. – all companies want to generate more sales. One strategy to achieve this goal is to open more stores. So management may plan to build and begin operating 25 new stores next year. Managerial accounting translates these plans into budgets – the quantitative expression of a plan. Management analyzes the budgets before proceeding to determine whether its expansion plans make financial sense. ∆ Directing Overseeing the company’s day-to-day operations Management uses product cost reports, product sales info, and other managerial accounting reports to run daily business operations. Companies use product sales data to determine which items are generating the most sales and then uses that info to adjust product lines, production and marketing strategies. ∆ Controlling Evaluating the results of business operations against the business plan and making adjustments to keep the company pressing towards its goals. Companies use performance reports to compare each segment’s actual performance against the budget and then uses that feedback to take corrective actions if needed. If actual costs are higher than planned, or actual sales are lower than planned, then management may revise its plans or adjust operations. Ex. – perhaps newly opened stores are not generating as much income as budgeted. As a result, management may decide to increase local advertising to increase sales. ∆ Decision Making Management is continually making decisions while it plans, directs, and controls operations. For example: Price Setting Product Offerings Renovation of Facilities Does Managerial Accounting Add Value to a Company? – YES! Provides info for decision making and planning Assists managers in directing and controlling activities Motivates managers and other employees towards organization’s goals Measures performance of subunits, activities, managers, and other employees Assesses the organization’s competitive position Managerial vs Financial Accounting Accounting System – accumulates financial and managerial accounting data ∆ Managerial Accounting – planning, directing, controlling, and decision making Internal Users ∆ Financial Accounting – published financial statements and other financial reports External Users Managerial Financial Users of Info - Managers, within the organization - Interested Parties, outside organization Regulated - Not required and unregulated - Required – GAAP. Regulated by FASB & SEC Source of Data - Organization’s basic accounting system, - Almost exclusively drawn from the organization’s plus various other sources, such as basic accounting system, which accumulates such as physical quantities of material financial information and labor used in production Nature of Reports - Reports often focus on subunits within - Reports focus on the enterprise in its entirety. and Procedures Based on historic data and future Based almost exclusively on historical transaction predictions. Data. Examples of Senior Managerial Accountants within the Organization CFO and/or Controller Treasurer Internal Auditor Managerial Accounting vs Cost Accounting Managerial accounting is the broad task of preparing info for planning, directing, controlling, and decision making within the context of an organization’s operations The cost accounting system is used to accumulate cost info, and is one part of the overall accounting system.
Are you sure you want to buy this material for
You're already Subscribed!
Looks like you've already subscribed to StudySoup, you won't need to purchase another subscription to get this material. To access this material simply click 'View Full Document'