Advanced management accounting
Advanced Management Accounting
Chapter 1
A management accounting system is an information system that collects operational and financial data, processes it, stores it, and reports it to users (such as workers, engineers, managers, and executives).
What the organization tries to deliver to customers is called its value proposition
Planning includes activities such as product planning, production planning and strategy development.
What are the four generic elements of an organization’s value proposition? Define or explain each element.
Value propositions have four elements:
1. Price – the price paid by the customer, given the product features and competitors’ prices
2. Quality – the degree of conformance between what the customers is promised and what the customer receives. For example a defect free automobile that performs as promised by the salesperson
3. Functionality and features – the performance of the product, for example a meal in a restaurant that provides the diner with the level of satisfaction expected for the price paid
4. Service – all the other elements of the product relevant to the customer. For example, for an automobile service might include: how the customer is treated as the automobile is purchased and the degree and form of after sales service
Chapter 2
Job object : something for which the management accountant computes a cost
Opportunity cost : an opportunity cost is the sacrifice one makes when using a resource.
Fix cost : they vary with the amount of capacity acquired--not on the amount of capacity used
Includes: Most personnel costs and depreciation on machinery and buildings.
Direct cost : the cost of a resource or activity that is acquited for or used by a single cost object
Indirect cost : the cost of a resource that is used by more than one cost object.
What are two broad purposes for which costs are used inside an organization ?
The purpose divided into two broad categories : planning and
Chapter 1
A management accounting system is an information system that collects operational and financial data, processes it, stores it, and reports it to users (such as workers, engineers, managers, and executives).
What the organization tries to deliver to customers is called its value proposition
Planning includes activities such as product planning, production planning and strategy development.
What are the four generic elements of an organization’s value proposition? Define or explain each element.
Value propositions have four elements:
1. Price – the price paid by the customer, given the product features and competitors’ prices
2. Quality – the degree of conformance between what the customers is promised and what the customer receives. For example a defect free automobile that performs as promised by the salesperson
3. Functionality and features – the performance of the product, for example a meal in a restaurant that provides the diner with the level of satisfaction expected for the price paid
4. Service – all the other elements of the product relevant to the customer. For example, for an automobile service might include: how the customer is treated as the automobile is purchased and the degree and form of after sales service
Chapter 2
Job object : something for which the management accountant computes a cost
Opportunity cost : an opportunity cost is the sacrifice one makes when using a resource.
Fix cost : they vary with the amount of capacity acquired--not on the amount of capacity used
Includes: Most personnel costs and depreciation on machinery and buildings.
Direct cost : the cost of a resource or activity that is acquited for or used by a single cost object
Indirect cost : the cost of a resource that is used by more than one cost object.
What are two broad purposes for which costs are used inside an organization ?
The purpose divided into two broad categories : planning and