Chapter 1 3 primary responsibilities of mngt Planning controlling directing Planning involve the use of budgets Involve set goals and objectives for co and determine how to achieve them Directing oversee the co s day to day operations Controlling evaluate the results of business operations against the plan and making adjustment to keep the co press toward its goals Manag acct differ from finan acct in that manag acc emphasize data relevance over data objectivity Manag acct skill Oral and written communication skills knowledge of both financial and managerial acting knowledge of how a business functions Treasurer is responsible for raising capital and investing funds Manag acct is geared toward external stakeholders such as investors and creditors F Manag acct often work in cross functional teams throughout the organization T Manag acct are now more often looked upon as internal business advisors rather than bean counters recording historical transactions T Manag acct should be technically proficient but they don t need strong oral and written communication skills F Manag acct should be proficient in Excel T The AICPA issues the CMA certification F Describes historical transactions with external parties Financial Is not required by any authoritative body such as the SEC Manag Reports on the co s subunits such as prodects geographical areas and departments Manag Is interned to be used by creditors and investors F Is formatted in accordance with GAAP Fina 1 Don t disclose co information unless authorized to do so Confidentiality 2 Continue to develop skills and knoeledge Competence 3 Don t bias the information and reports presented to management Credibility 4 If you don t have the skill to complete a task correctly don t pretend you do Competence 5 Avoid actual and apparent conflicts of interest Integrity 6 Require manag acct to mitigate conflicts of interest Integrity 7 Require manag acct to communicate information fairly and objectively Credibility The Sarbanes Oxley Act of 2002 imposes stricter requirements over financial reporting and internal controls and stricter consequences for those who engage in financial statement misconduct and other white collar crimes T U S co that have operations overseas must use the IFRS to issue their financial statements F XBRL is a standardized coding system that allows financial information to be tagged so that it can be read by computer programs T The triple bottom line assesses co performance on three factors people social impact planet environmental impact and profit economic impact T Manufacturing makes up the largest sector of the U S economy F The globalization of business has little bearing on management accting F Computer systems that integrate all of co s worldwide functions into one database are known as IWSs F Lean thinking focuses on eliminating waste from operations in an effort to reduce costs T The ISO 9001 2008 certification focuses on environmental management F freight in purchases purchases of merchandise purchases Chapter 2 Manufacturing companies would carry raw materials work in process and finished good inventory Value chain activity Customer service Marketing Design Value chain cost classification Newspaper advertisements marketing payment to consultant for advice on location of new store R D salespeople s salaries marketing depreciation expense on delivery trucks distribution research on selling satellite radio service R D customer Complaint Department customer service rearranging store layout design Inventoriable product costs purchases Value chain UPS deliver expense distribution salary of salesman marketing chip set direct materials exterior case for phone direct materials assemblyline workers wage direct labor technical support hotline customer service depreciation on plant and equipment manufacturing overhead rearrange production process design 800 line for customer orders marketing scientists salary R D Direct material direct labor manufacturing overhead total inventoriable product coat Direct labor direct materials total prime cost Direct labor manufacturing overhead total conversion cost Period cost lease retail locations manager s and salesman s salary design and operate the corp s website provide free shipping to customers utilities used in running retail location depreciation on store shelving and shopping carts Inventoriable product cost merchandise purchased for resale shipping merchandise to store import duties paid on merchandise purchased from overseas suppliers Costs associated with warranties and recalls Customer service Cost of shipping finished goods to overseas customers Distribution Costs a pharmaceutical company incurs to develop new drugs Research and development Cost of a 30 second commercial during the SuperBowl Marketing Cost of making a new product prototype Design Cost of assembly labor used in the plant Production Depreciation on plant equipment Inventoriable product cost MOH Depreciation on salespeoples automobiles Period cost Insurance on plant building IPC manager s salary Period cost Cost of major components of the finished product IPC DM Assembly line workers wages IPC DL Costs of shipping finished products to customers Period cost Forklift operator s salary IPC MOH Period costs are often referred to as both selling general and administrative and operating expenses Prime cost DM DL MOH indirect labor indirect materials other indirect manufacturing costs Valve Chain Cola Plant janitors wages MOH Truck drivers wages distr Payment for new recipe R D Depreciation on trucks distr Plant utilities MOH Lime flavoring DM Rearranging plant layout design Bottles DM Salt MOH Sales commissions marketing Production costs of cents off coupons marketing Lemon syrup DM Replace products with expired dates CS Depreciation on plant and equipment MOH Wages of workers who mix syrup DL Customer hotline CS Freight in on materials DM The managers of R D and Design are likely to cut their costs They can increase costs of later value chain elements Select all Value chain Airline Airplane seats DM Production supervisors salaries IL Depreciation on forklifts MOH Machine lubricants IM Factory janitors wages IL Assembly workers wages DL Property tax on corporate marketing offices Period Plant utilities MOH Cost of warranty repairs Period Machine operators health insurance DL Depreciation on administrative offices Period Cost of designing new plant layout Period Jet engines DM IL IM Other MOH Total MOH costs DL DM