Pcm Mngt Acctg Conclusion

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Pcm Mngt Acctg Conclusion

  1. 1. Conclusion Management Accounting Benoit SENAUX [email_address] 1-A-006
  2. 2. Different methods for different uses <ul><li>Full-costing </li></ul><ul><ul><li>Long-term strategic decisions (e.g. products portfolio) </li></ul></ul><ul><ul><li>Ensuring that all the costs are covered by selling price </li></ul></ul><ul><li>Variable / direct costing & CVP analysis </li></ul><ul><ul><li>Short-term decisions (e.g. accepting an exceptional order) </li></ul></ul><ul><ul><li>Calculating break-even point </li></ul></ul><ul><ul><li>Simulating the impact of decisions </li></ul></ul><ul><ul><ul><li>change in volume, change in selling price / variable cost </li></ul></ul></ul><ul><li>It is usually interesting to use both method </li></ul>
  3. 3. Limitations <ul><li>Full-costing </li></ul><ul><ul><li>Complex and opaque </li></ul></ul><ul><ul><li>Allocation of indirect costs could be questionable (conventions) </li></ul></ul><ul><ul><li>Calculating fixed costs per unit is questionable (which volume?) </li></ul></ul><ul><li>Variable / direct costing </li></ul><ul><ul><li>Risk of forgetting (indirect) fixed costs </li></ul></ul><ul><ul><li>Fixed costs may not be so fixed (and increasing the number of products with small contribution may lead to decreasing profit) </li></ul></ul><ul><ul><li>Break-even point when more than one product is questionable </li></ul></ul>
  4. 4. Conclusion <ul><li>Those tools are useful and used </li></ul><ul><li>… but you need to be aware of their specific limitations.. </li></ul><ul><li>… and keep them in mind when making decision. </li></ul><ul><li>Change in the economic context make activity based costing all the more interesting: </li></ul><ul><ul><li>Process perspective (transverse vs. vertical/departmental) </li></ul></ul><ul><ul><li>More and more complex and personalised ‘products’ (and thus ‘production’ process) </li></ul></ul><ul><ul><li>Increase weight of indirect fixed costs which cannot be ignored </li></ul></ul>
  5. 5. Other way of costing <ul><li>Target costing: </li></ul><ul><ul><li>Especially during development phase </li></ul></ul><ul><ul><li>Starts from a market perspective (=> selling price) </li></ul></ul><ul><ul><li>Considers the whole product life cycle (conception but also recycling etc.) </li></ul></ul>
  6. 7. <ul><li>Common courses: </li></ul><ul><ul><li>Management accounting (PCM or Bachelor) </li></ul></ul><ul><ul><li>Pilotage de la performance / Managing Performance (Master) </li></ul></ul><ul><li>Electives (master) : </li></ul><ul><ul><li>Contrôle de gestion et mesure de la performance </li></ul></ul><ul><ul><li>Contrôle de gestion et pilotage de la stratégie </li></ul></ul><ul><ul><li>Contrôle de gestion et système d’information </li></ul></ul>Management control courses at SupdeCo

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