Asistensi Ab: CH 1 & CH 2

ASISTENSI AB
CH 1 & CH 2
Management Accounting , Financial Accounting,
& Cost Accounting
 Management accounting—measures, analyzes, and reports
financial and nonfinancial information to help managers make
decisions to fulfill organizational goals. Management accounting
need not be GAAP compliant.
 Financial accounting—focuses on reporting to external users
including investors, creditors, banks, suppliers, and governmental
agencies. Financial statements must be based on GAAP.
 Cost accounting – measures, analyzes and reports financial and
nonfinancial information related to the costs of acquiring or using
resources in an organization.
Value Chain & Supply Chain
 The value chain : the sequence of

business functions
 The supply chain : describes the flow
of goods, services and information
Key Success Factor
◦ Cost and efficiency : understanding the activities that cause costs to arise and
managing them allows managers to react to the continuous pressure to
reduce costs
◦ Quality : customers expect high levels of quality
◦ Time : two important dimensions of time are new-product development and
customer-response time
◦ Innovation: a constant flow of innovative products or services is the basis for
the ongoing success of a company.
◦ Sustainability : the development and implementation of strategies to achieve
long-term financial, social and environmental goals.
Basic Cost Terminology
 Cost—a sacrificed or forgone resource to achieve a specific objective.
 Actual cost—a cost that has occurred.
 Budgeted cost—a predicted cost.
 Cost object—anything for which a cost measurement is desired.
 Cost accumulation—the collection of cost data in an organized way by means of an accounting system.
 Cost assignment—a general term that encompasses the gathering of accumulated costs to a cost object in
two ways:
◦ Tracing accumulated costs with a direct relationship to the cost object and
◦ Allocating accumulated costs with an indirect relationship to a cost object.
 Cost driver—a variable, such as the level of activity or volume, that causally affects costs over a given time
span.
 Relevant range—the band or range of normal activity level (or volume) in which there is a specific
relationship between the level of activity (or volume) and the cost in question
Direct Cost, Indirect Cost & Cost Behaviour
 Direct costs can be conveniently and economically traced (tracked) to a
cost object.
 Indirect costs cannot be conveniently or economically traced (tracked)
to a cost object. Instead of being traced, these costs are allocated to a
cost object in a rational and systematic manner.
 Variable costs—change in total in proportion to changes in the related
level of activity or volume of output produced.
 Fixed costs—remain unchanged in total, for a given time period, despite
changes in the related level of activity or volume of output produced.
Costs are fixed or variable only with respect to a specific activity or a given time period.
Different Types of Firms
 Manufacturing: sector companies purchase materials and
components and convert them into finished products.
 Merchandising: sector companies purchase and then sell tangible
products without changing their basic form.
 Service: sector companies provide services (intangible products)
like legal advice or audits.
Types of Inventory
 Direct materials: resources in-stock and available for use
 Work-in-process (or progress) : products started but not yet
completed, often abbreviated as WIP
 Finished goods: products completed and ready for sale
Note: Merchandising-sector companies hold only one type of inventory: merchandise inventory
Inventoriable Cost & Period Cost
Inventoriable costs are all costs of a product that are considered assets in a
company’s balance sheet when the costs are incured and that are expensed as
cost of goods sold only when the product is sold. For manufacturing
companies, all manufacturing costs are inventoriable costs.
Period costs are all costs in the income statement other than cost of goods
sold. They are treated as expenses of the accounting period in which they are
incurred.
Prime cost is a term referring to all direct manufacturing costs (materials and labor).
Conversion cost is a term referring to direct labor and indirect manufacturing costs.
Overtime labor costs are considered part of indirect overhead costs.
Commonly used classifications of manufacturing costs
Also known as inventoriable costs
◦ Direct materials—acquisition costs of all materials that will become part of
the cost object.
◦ Direct labor—compensation of all manufacturing labor that can be traced to
the cost object.
◦ Indirect manufacturing—factory costs that are not traceable to the product in
an economically feasible way. Examples include lubricants, indirect
manufacturing labor, utilities, and supplies.

Asistensi Ab: CH 1 & CH 2

Uploaded by

Copyright:

Available Formats

Asistensi Ab: CH 1 & CH 2

Uploaded by

Document Information

Original Description:

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Asistensi Ab: CH 1 & CH 2

Uploaded by

Copyright:

Available Formats

ASISTENSI AB

 The value chain : the sequence of

You might also like