Cap.1.costosnuevo
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  • 1. © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in alicense distributed with a certain product or service or otherwise on a password-protected website for classroom use.Chapter 1:Introduction to CostAccountingCost Accounting:Foundations & Evolutions, 8eKinney and Raiborn
  • 2. © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in alicense distributed with a certain product or service or otherwise on a password-protected website for classroom use.Accountants Financial accountants provide information toexternal parties Investors Creditors Regulators Managerial accountants provide information tointernal users Managers Cost accountants provide information to bothinternal and external users Product cost information
  • 3. © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in alicense distributed with a certain product or service or otherwise on a password-protected website for classroom use.Accounting DifferencesFinancial External focus Whole organization Historical Quantitative Monetary Verifiable GAAP FormalrecordkeepingManagerial Internal focus Segments or divisions Current/projected Quantitative/qualitative Monetary and nonmonetary Timely/reasonable estimate Benefits exceed costs Formal and informalrecordkeeping
  • 4. Relationship of Financial,Management, and CostAccountingFINANCIALACCOUNTINGMANAGEMENTACCOUNTINGCOSTACCOUNTINGProduct Costs© 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in alicense distributed with a certain product or service or otherwise on a password-protected website for classroom use.
  • 5. © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in alicense distributed with a certain product or service or otherwise on a password-protected website for classroom use.Product Cost Information External parties—stockholders, creditors,and regulators For investment and credit decisions Complies with GAAP Enterprise focus Internal parties Planning, controlling, and decision making Evaluating performance Includes upstream and downstream costs Disaggregated
  • 6. © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in alicense distributed with a certain product or service or otherwise on a password-protected website for classroom use.Accounting BodiesFinancial Public CompanyAccounting OversightBoard (PCAOB) Securities andExchange Commission(SEC) Financial AccountingStandards Board(FASB)Management Institute of ManagementAccountants (IMA) Society of ManagementAccountants of Canada Cost AccountingStandards Board (CASB)
  • 7. © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in alicense distributed with a certain product or service or otherwise on a password-protected website for classroom use.Professional Ethics Earnings management—deliberateaccounting adjustments to “hit” profit targets Often adjustments involve cost accounting—product costs and inventory valuations Stretching legitimate accounting techniques Outright fraud
  • 8. © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in alicense distributed with a certain product or service or otherwise on a password-protected website for classroom use.Ethics and Legislation Sarbanes-Oxley Act—CEOs and CFOspersonally accountable for the accuracy oftheir organization’s financial reporting False Claims Act—whistle-blower protectionand penalties for failure to blow the whistle(disclose known financial frauds)
  • 9. © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in alicense distributed with a certain product or service or otherwise on a password-protected website for classroom use.Ethics & Management Accountants Standards of Ethical Conduct forManagement Accountants Competence Confidentiality Integrity Credibility
  • 10. © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in alicense distributed with a certain product or service or otherwise on a password-protected website for classroom use.Organizational Strategy1. Develop mission statement2. Implement strategy3. Deploy resources to create value forcustomers and shareholders4. Recognize that each organization isunique—thus unique strategies must bedeveloped
  • 11. © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in alicense distributed with a certain product or service or otherwise on a password-protected website for classroom use.Organizational StrategyFive factors core competencies organizational structure management style and organizationalculture organizational constraints environmental constraints
  • 12. © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in alicense distributed with a certain product or service or otherwise on a password-protected website for classroom use.Organizational Strategies Core competency—critical function oractivity providing a competitive advantage Cost leadership strategy—undercutcompetitor prices Product differentiation strategy—superiorquality products or unique services sold ata premium
  • 13. © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in alicense distributed with a certain product or service or otherwise on a password-protected website for classroom use.Organizational Structure Distribution of authority and responsibilityin an organization Authority—right to use resources toaccomplish a task or achieve anobjective Responsibility—obligation to accomplisha task or achieve an objective
  • 14. © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in alicense distributed with a certain product or service or otherwise on a password-protected website for classroom use.Value ChainA set of value-adding functions and processesthat converts inputs into products/services Research and Development Product Design Supply Production Marketing Distribution Customer ServiceCommunicate strategy to all members of the value chain
  • 15. © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in alicense distributed with a certain product or service or otherwise on a password-protected website for classroom use.Ethics in Multinationals Foreign Corrupt Practices Act—prohibitsbribes to obtain/retain a business Organization of Economic Cooperation andDevelopment Convention—crime to offer,promise, or give bribes to obtain/retaininternal business deals
  • 16. © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in alicense distributed with a certain product or service or otherwise on a password-protected website for classroom use.Potential Ethical Issues Earnings management Low cost production at any cost Whistleblower retaliation Fixing prices Bribery and other corruption Hiding managerial acts