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Intro to Management Accounting - Coggle Diagram
Intro to Management Accounting
Distinction between Management & Financial Accounting
MA - Reports on a section of the b/s, more frequently.
FA - Reports on all the business & may be semi-annually
MA - Not Regulated
FA - Regulated
FA provides info to external parties
MA provides info to internal users for decision making, improve efficiency & effectiveness of operations
Changes in B/S environment that influence MA
Globalisation of trade
Deregulation in industries
Changing product life cycles
Advances in manufacturing and IT
Focus on environmental and ethical issues
Great emphasis on value creation
Need to become more customer driven
Elements Involved in Decision making, planning & Control Process
Search for a range of possible courses that will enable 1 to be achieved
Select alternative appropriate courses of action for 1.
Identify objectives that guide the B/S
Implement decision as part of planning & budgeting process
Compare actual & planned outcomes
Respond to divergencies from plan by taking corrective action so that outcome meets plan OR modify plan if comparisons indicate plans are no longer attainable.
View that Objective of Commercial Organisations is to maximise profits
N.B to establish principles necessary to meet objective of maximising profits.
Allows shareholders to measure costs through distribution
Can measure ability of organisation to survive in future
Success factors affecting customer satisfaction
Time
Innovation
Quality
Continuous improvement
Cost efficiency
Functions of a cost and management system
Provide relevant info for Decision making
Provide info for planning, control & performance measurement
Allocate cost between COS and Inventory for Internal & external profit & inventory valuation
For Inventory : Only consider manufacturing cost
For Decision making: Consider ALL costs (manu/non-manu) that are Relevant