Managerial Accounting Financial Accounting Reporting the firms successes

Managerial Accounting Financial Accounting Reporting the firm’s successes and failures Managerial Accounting Creating the firm’s successes and failures Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall.

Today’s Agenda: Course Introduction Managerial vs Financial Accounting Course Process Details Course Content Overview & Learning Objectives 2 Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall.

Teaser: The Make or Buy Decision Fireball Company makes a Halogen bulb as a component of a specialty lighting system. Fireball Company’s internal “make” cost is $30 per unit @20, 000 units produced. (including all production costs from their ERP system) Fireball can “buy” these for $20 FOB Destination per unit @ 20, 000 units. Which option should we take boss? What is holding back your full commitment? Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall.

Teaser: The Make or Buy Decision Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall.

Managerial Accounting Financial Accounting Reporting the firm’s successes and failures Managerial Accounting Creating the firm’s successes and failures Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall.

Financial Accounting vs. Financial: standardized reports for external use by investors, lenders, and others Managerial Accounting Managerial: customized internal information to gain competitive advantages Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall.

Differences Between Financial and Managerial Accounting Financial Managerial Designed to be Outsiders: investors, used by lenders, etc. Internal Management Time Perspective Reporting on past performance Decisions to effect the future Emphasis Standardized by GAAP – doing it the same as everyone else Customized to specific company, segment, and individual decision needs. Requirements GAAP standards of conformity Whatever the company needs Benefit Display performance of a company Build competitive advantages and profits Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall.

Financial #’s vs. Managerial decision & information differences Total cost of goods sold (COGS) for the Volkswagen group Additional costs incurred by adding one more option to a new Audi All-Road wagon Best Buy earned $1. 2 B of sales of $50 B last year. The particular business segments performances that are bringing them down Should I invest in UPS? Will elimination of 2 day service increase or decrease our (UPS) profits? Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall.

Is managerial accounting important? ØGlobal economy ØSpeed, impatience, information, and aggression ØCustomer expectations: low price / high everything else ØDoes it help my career if I am not an accountant? Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall.

Today’s Agenda: Course Introduction Managerial vs Financial Accounting Course Process Details Course Content Overview & Learning Objectives 12 Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall.

Course Process Details Course Information Sheet Tutors? Contacts Homework. Two required tests One required project, in two steps Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall.

Today’s Agenda: Course Introduction Managerial vs Financial Accounting Course Process Details Course Content Overview & Learning Objectives 14 Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall.

Common semester long themes for management accounting: Ethical radar and corporate governance Understanding cost behavior so we make profitable decisions Using the information we generate Practicality: Inexpensive and useful trumps expensive, perfect, and wasteful Selling your position Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall.

st Break it Down: The 1 Half Get your feet wet Environment Cost types Cost flow options Job & process Activity Based Cost Volume Profit Analysis Decisions based on the above tools Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall.

nd Break it Down: The 2 Half More decision making situations Capital budgeting Budgeting Variance analysis Segment performance evaluation Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall.

Project: Apply course lessons to your vision Central Themes Quantifying your business ideas using formal business research resources Creating budgets Using basic Excel spreadsheet capabilities to get it done Getting it done using YOUR creativity and fortitude Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall.

Ethics Exercise: Connection to 1 B Form groups by ethical dilemma. Select 1 business related ethical dilemma. Answer the questions on the paper Really think and don’t settle for just the short obvious answers. Be creative. Explore the possible extensions of what to do along with the obvious choices. Your team will have 10 minutes to prepare for a class discussion on your topic. Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall.