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3310 – Chapter 1

3310 – Chapter 1. Cost Accounting: Information for Decision Making. Value Creation in Organizations. Value chain (Exhibit 1-1, page 4) Research and development Design Purchasing Production Marketing and sales Distribution Customer service. Value Creation in Organizations.

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3310 – Chapter 1

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  1. 3310 – Chapter 1 Cost Accounting: Information for Decision Making

  2. Value Creation in Organizations • Value chain (Exhibit 1-1, page 4) • Research and development • Design • Purchasing • Production • Marketing and sales • Distribution • Customer service

  3. Value Creation in Organizations • Using cost information to increase value • Value chain • Supply chain • Distribution chain • Identifying value-added activities • Eliminating non-value-added activities

  4. Accounting Systems • CostFinancial • Internal External • Prepared for Prepared for managers investors and creditors • Future-oriented Historical • Segmented Whole company • Any format Often follows GAAP

  5. Cost Data for Managerial Decisions • Cost drivers • Different costs for different purposes • Cost control and evaluation • Budgeting • Different data for different decisions • Cost-benefit approach

  6. Trends • Lean manufacturing and accounting • ABC • Performance measures • Benchmarking • Customer profitability analysis • Outsourcing/insourcing • Cost of quality

  7. Key Financial Players in the Organization • Chief Financial Officer (CFO) • Treasurer • Controller • Internal auditor • Cost accountant • Other positions

  8. Ethical Issues for Accountants • Increased Importance • IMA Code of Ethics (Appendix) • Competence • Confidentiality • Integrity • Credibility • Resolution of Ethical Conflict (Appendix) • Codes of Ethics – Company • Codes of Conduct on the International Level

  9. Sarbannes-Oxley Act of 2002 • Executives (CEO and CFO) are now responsible for everything in their financial statements!!!! • They must both sign the financial statements and say that the financial statements do not omit “material” information. • They must disclose that they have evaluated the company’s internal controls. • They must notify the company’s auditors and the audit committee of the board of any fraud that involves management. • Executives signing off on fraudulent statements will go to criminal jail (No country clubs!)

  10. Certified Management Accountant (CMA) Exam NOW TWO PARTS ONLY: • Financial Planning, Performance & Control • Financial Decision Making

  11. Homework • Problems 1-40, 1-43 (2 points each) • DUE THURSDAY, AUGUST 28

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