AFM481 Lecture Notes - Lecture 1: Total Quality Management, Cost Accounting, Management Accounting
28 Jun 2018
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Department
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Professor
Stores information in a way that allows sales, distribution, and production managers to
access the information they need.
○
Many companies build their own comprehensive databased called ERP system○
Costs and other data are part of the management information system (MIS)•
Shows how costs accumulate and recovered when customers purchase products/services○
Cost accounting measures and reports financial and nonfinancial information related to the costs
of acquiring and using resources.
•
Managers often deliberately incur additional costs in the short run e.g. advertising to
enhance revenues and profits in the long run
○
Cost management includes the activities of identifying, reporting, and analyzing all costs of
operations
•
Goal is to fairly present how a business do during a specific period that affect the economic
health of a company
○
Reported based on GAAP
This is called economic substance, which is the financial outcome of all the different types
of business transactions that happened
○
Financial accounting focuses on reporting to external parties•
Use past performance to predict the future
○
The reports should also show how activities can be changed to affect and improve what will
happen in the future
○
Management accounting measures, analyzes, and reports financial and nonfinancial information
to internal managers.
•
Accounting systems: financial and management accounting
Cost leadership vs value leadership (differentiation)○
Ask questions to decide which strategy to use e.g. who are our customers? How to deliver
value to them? What substitute products exist in the marketplace? What are we competent
at doing?
○
Strategy specifies how an organization matches its own capabilities with the opportunities in the
marketplace
•
Strategic decisions and management accounting
Customers demand more than just low price, they want other values such as timely delivery •
Value chain and supply chain analysis and key success factors
The value chain is the sequence of business functions in which customer usefulness is added to
products or services.
•
R&D○
Design
The flow of costs incurred in a corporation can be classified into the value adding activities of •
Value-chain analysis
Notes
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chapter 1
May 2, 2018 3:39 PM
AFM 481 Page 1
Document Summary
Costs and other data are part of the management information system (mis) Stores information in a way that allows sales, distribution, and production managers to access the information they need. Many companies build their own comprehensive databased called erp system. Cost accounting measures and reports financial and nonfinancial information related to the costs of acquiring and using resources. Shows how costs accumulate and recovered when customers purchase products/services. Cost management includes the activities of identifying, reporting, and analyzing all costs of operations. Managers often deliberately incur additional costs in the short run e. g. advertising to enhance revenues and profits in the long run. Financial accounting focuses on reporting to external parties. Goal is to fairly present how a business do during a specific period that affect the economic health of a company. This is called economic substance, which is the financial outcome of all the different types of business transactions that happened.
