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- Providing Info to managers.
- Essential data needed to run orgtanizations
- Internal Users
- Emphasis on Future
- Provides data of Relevance
- Emphasis on timeliness
- Focuses on Segments of organization
- Does not follow GAAP
- Not madatory
- Provides Info to stockholders
- Focus on Precision when reporting
- Reports for company as a whole
- Uses GAAP
- Mandatory for external reports
Work of Managment
- 1. Planning: Establishing basic strategy
- 2. Directing and Motivating: Oversea day to day and keep it moving
- 3. Controlling: Measuing performance, and comparing to what is planned
- Delegation of decision making authority through out an organization.
- Breaks decisions up so managers make decisions in their department.
Directly involed in basic objectives of the organization
Support and assist the line position
- The US manager of the accounting department
- They report to the CFO
- Cheir Financial Officer
- Responsible for providing timely and relevant data to support planning and control activities
- Cheif Executive Officer
- The President
- Sets broad strategies for company and makes major strategic decisions
- Push to make as much as possible
- Do not worry about what the sales are
- End up having large inventories of all things
- Materials waiting to be processed
- These consist of direct and inderect.
- All materials that are purchases
Work in Process
- Partially completed products
- Consists of raw materials, direct labor, manufacturing overhead
Completed but not yet sold
Lean Thinking Model
- 5 step process results in a Pull system
- Reduces inventories
- Decreases defects
- Reduce wasted effort
- Just in Time Model
- The work takes place just in time in the sense that raw materials are recieved by each manufacturing cell just in time to go into production. Products completed just in time to be shipped to the customers.
Theory of Constrants (TOC)
- Constraint: aka bottleneck is anything that prevents you from getting more of what you want.
- This is based off of observation that effectivly managing the constraint is key to success.
- Improvement factors must be focused on the constraint
- Process improvment method that relies on cusomer feedback and fact-based data gatherin and analysis techniques to drive process improvement.
- Generates no more than 3.4 defects per million
- DMAIC: Define, Measure, Analyze, Improve, and Control.
Code of Conducts
- Competence: Continue schooling, perform according to law, be accurate
- Cerfified Management Accountant
- Given greateer responsiblities and higer compensation.
- Direct Materials
- Direct Labor
- Manufactoring Overhead
Raw materials that can be easily traced
- Labor costs that easily be traced
- Touch labor because it is the cost of workers who touch the product
- Costs that cannot be traced directly
- Anything needed to build the prduct that can not see on it
- Heat, light, depreciation, insurance, property taxes, cleaning supplies
- Selling Cost: All costs inccured to secure customer order. Ex. advertising, shipping, sales travel, commiosns, sales salaries
- Administrative Costs: All executive, organizational, and clerical costs. Ex. accounting, secretarial, public relations, costs for admimistration as a whole.
- Involing making a product
- Raw materials, direct material, direct labor, OH
- These are inventoriable because they go into inventory which reports to balance sheet
- All selling and administrative
- Not directly with product
- Goes under expense and reports to income statement.
The sum of direct materials and direct labor
- Sum of direct labor and OH costs
- These costs are inccured to convert product into finished product
Raw Materials T-Accout
- Debit: Beginning, purchases, end
- Credit: Raw materials used
Work in Process
- Debit: RM, Direct Labor, OH
- Credit: Cost of goods manufactured
- Debit: COGM
- Credit: Cost of goods Sold
- Buy finished and see finished
- Report one inventory # which is merchandise inventory
- Buy raw materials
- Produce and sell finished goods
- Report all 3 #'s, which are raw materials, WIP, Finished goods.
- Change when activity changes
- Variable cost per unit is constant
- Ex: direct labor and materials
- Remains constant regardles changes in activity
- Fixed cost moves when constant moves
- Ex: Rent
- Can be easily traced to specifed cost object
- Ex: Direct materials and labor
Cost and revenues that differ among alternatives
Cost that has already been incurrred that can not be changed by an dicision made now or in the future
- Produces many units of single product for long period
- Unit Product cost=Total manufactoring/total units produced
- Many different products are produced
- Costs are traced and alocated to jobs
Bill of Materials
Document that lists type and quantity of each type of direct material needed to complete a unit of product
Materals requuisition form
Detailed source document that specifies type and materal drawn from storeroom and identifies job to be charged
Predetermined Overhead rate
Divide total estimated O/H cost by estimated allocation base
The money to appply is rate *amount of allation base
A factor, MH, beds occupied, that cause Drive OH costs
Selling and administrative costs should be treaed as period espenses and charges directly to income sttement