《Management Accounting》Chapter 1.pptVIP

1. Unit-based drivers 2. Allocation-intensive 3. Narrow and rigid product costing 4. Focus on managing cost 5. Sparse activity information 6. Maximization of individual unit performance 7. Use of financial measures of performance 1. Unit- and nonunit-based drivers 2. Tracing intensive 3. Broad, flexible product costing 4. Focus on managing activities 5. Detailed activity information 6. Systematic performance maximization 7. Use of both financial and nonfinancial measures of performance Functional-Based Activity-Based The End Chapter Two Current Focus of Management Accounting Value-Chain Framework The internal value chain is the set of activities required to design, develop, produce, market, and deliver products and services to customers. The industrial value chain is the linked set of value-creating activities from basic raw materials to the disposal to the final products by end-use customers. Supermarkets Value Chain: Apple Industry Planting and Cultivating Harvesting Distribution of Apples Applesauce Production Applesauce Distribution Firm B Firm C Firm A Product Disposal End-Use Customer Managing the value chain means that a management accountant must understand many functions of the business, from manufacturing to marketing. The philosophy of total quality management is to manufacture perfect products. This emphasis on quality has created a demand for management accounting systems that provide financial and nonfinancial information about quality. The role of management accountants in an organization is one of support. Partial Organization Chart, Manufacturing Company President Production Vice President Line Function Financial Vice President Staff Function Production Supervisor Machining Foreman Assembly Foreman Controller Treasurer Internal Audit Cost Financial Systems Tax Ethical Behavior Michael Josephson’s* Ten Ethical Values: Honesty Integrity Promise keeping Fidelity Fairness Caring for others Respect for others Responsi