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Accounting (248)
ACCT 2230 (113)
Chapter 1

Managerial Accounting Chapter One Notes

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Department
Accounting
Course
ACCT 2230
Professor
Elliot Currie
Semester
Winter

Description
Chapter One Managerial Accounting and the Business Environment y Managerial accounting the phase of accounting concerned with providing information to managers for use in planning and controlling operations and for decision makingy Financial accounting the phase of accounting concerned with providing information to shareholders creditors and other outside organizationy Managerial accounting is concerned with determining and developing internal accounting information as a tool for helping managers make business decisions that satisfy customers while continuously monitoring costs and improving efficienciesy The Work of Managers and Their Need for Managerial Accounting Information o Managers carry out three major activities planning directing and motivating and controlling Planning involves selecting a course of action and specifying how the action will be implemented Directing and motivating involve mobilizing people to carry out plans and run routine operations Controlling involves ensuring that the plan is actually carried out and is appropriately modified as circumstances changeo Companies face global competition and they must have a viable strategy for succeeding in the marketplace A strategy is a game plan that enables a company to attract customers by distinguishing itself from competitors The focal point of a companys strategy should be its target customers A company can only succeed if it creates a reason for customers to choose it over a competitor What are formally called customer value propositions tend to fall into three broad categories customer intimacy operational excellence and product leadership Customer intimacy strategy are in essence saying to their target customers the reason that you should choose us is because we understand and respond to your individual needs better than our competitors Operational excellence are saying to their target customers the reason that you should choose us is because we can deliver products and services faster more conveniently and at a lower price than our competitorsProduct leadership are saying to their target customers the reason that you should choose us is because we offer higher quality products than our competitorsAlthough a company may offer a combination of these three usually only one outweighs the other in terms of importanceo PlanningFirst step is to identify alternatives and then to select from among the alternatives the one that does the best job of furthering the organizations objectivesThe plans of management are often expressed formally in budgets a detailed plan for the future usually expressed in formal quantitative terms Budgets are usually prepared under the direction of the controller the manager in charge of the accounting department in an organization The personnel department will be given goals in terms of new hires courses taught and detailed breakdowns of expected expenses The manager of each outlet will be given a target for sales volume income expenses pilferage losses and employee training These data will be collected analyzed and summarized for management use in the form of budgets prepared by management accountantso Directing and Motivating
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