Managerial Accounting An Introduction To Concepts, Methods, And Uses资料.ppt

* * * * * * * * * * * * * * * * * * * * * * * * * Information in Management Accounting Revenue (-) Costs = Profit Cash Inflow (-) Cash Outflow = Net Cash Flow * Opportunity Cost An opportunity cost is the sacrifice you make when you use a resource for one purpose instead of another Opportunity costs = explicit costs + implicit costs that do not appear anywhere in the accounting records Machine time used to make one product cannot be used to make another, so a product that has a higher contribution margin per unit may not be more profitable if it takes longer to make. Management accountants often use the concept of opportunity cost for decision making Economic Profit v. Accounting Profit * Classification of Costs Variable / Fixed costs Direct / Indirect costs Prime costs / Overheads Cost hierarchy (types of activities and their associated costs) New! * Nature of Fixed Variable Costs Variable costs - change in total as the level of activity changes There is a definitive physical relationship to the activity measure Fixed costs - do not change in total with changes in activity levels Accounting concepts of variable and fixed costs are short run concepts Apply to a particular period of time Relate to a particular level of production Relevant range is the range of activity over which the firm expects cost behavior to be consistent Outside the relevant range, estimates of fixed and variable costs may not be valid * Types of Fixed Costs (1) Capacity costs- fixed costs that provide a firm with the capacity to produce and/or sell its goods and services Also know as committed costs and typically relate to a firm’s ownership of facilities and its basic organizational structure Capacity costs may cease if operations shut down, but continue in fixed amounts at any level of operations Examples: property taxes, executive salaries * Types of Fixed Costs (2) Discretionary costs - need not be incurred in the short run to operate the business, however, usually they are