Transcript MGA 311

A325
Cost Accounting
August 20, 2012
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What we will do today
1) Introduce the course and ourselves
2) Go over the syllabus
3) Have an abbreviated discussion of
chapters 1 and 2.
4) Get started with Chapter 3
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Syllabus
Professor:
Reed Smith
Class times:
Monday and Wednesday
Office:
BUS 4026
Office Hours:
Monday and Wednesday
Phone:
274-0867
e-mail:
[email protected]
Web:
bus.iupui.edu/johresmi/index.html
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3:00 – 4:15 PM
4:30 – 5:15 PM
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Syllabus - materials
Cost Management: A strategic emphasis
Blocher, Chen, Cokins, and Lin (5ed)
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Syllabus - the way things work
1) Regular updates/modifications to they
syllabus will be on ONCOURSE
a) YOU ARE RESPONSIBLE FOR THESE
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Syllabus
Exam 1
350 pts
Exam 2
350 pts
Quizzes
300 pts
Total
1000 pts
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A little about me…
Reed Smith
Accounting
(BS, MAcc Tennessee)
(PhD, Ohio State)
(Faculty: Texas, Oregon,
SUNY-Buffalo, Indiana University)
e-mail: [email protected]
I am a big college football enthusiast. I also like to sail and swim.
I play a little guitar, but I’m not that good anymore. I spent the
Summer in Croatia doing research with the Economics Institute of
Zagreb. I also just bought a house and have been moving in for the
past few weeks.
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Four Functions of Management
Strategic
management
Management and
operational control
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Planning and
decision making
Preparation of
financial statements
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Strategic Cost Management
Strategic cost management is the
development of cost management
information to facilitate the
principal management function,
strategic management
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Strategic Management
Strategic management requires:
• Anticipating changes
• Understanding the business and
competitive environment
• Ability to make changes quickly
• Ability to identify and solve problems
from a cross-functional view
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Types of Organizations
Manufacturers
Merchandisers
Wholesalers
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Service
firms
Government and
Not-for-profit
Retailers
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Changes in Business
Environment
1)
2)
3)
4)
5)
6)
Increase in global competition
Advances in manufacturing technologies
Advances in information technologies
Greater focus on the customer
New forms of management organization
Social, political, and cultural changes
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Target Costing
Identify product opportunity.
Determine price that would
make product competitive.
Determine if product can be made at
cost sufficiently low to provide a
desired profit.
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The Value Chain
1) The value chain is an analysis tool firms use to
identify the specific steps required to provide
a product or service to the customer
2) An analysis of the firm’s value chain helps
management discover:
a) which steps or activities are not competitive
b) where costs can be reduced
c) which activity should be outsourced
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The Balanced Scorecard
The balanced scorecard is an accounting
report that includes the firm’s critical
success factors in four areas:
1)
2)
3)
4)
Financial performance
Customer satisfaction
Internal business processes
Innovation and learning
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The Balanced Scorecard
Learning improves
business processes.
Improved business
processes improve
customer satisfaction.
Improving customer
satisfaction improves
financial results.
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Strategic Positioning
Firms arrive at one of two competitive strategies:
• Cost leadership is a competitive strategy in
which a firm succeeds in producing products or
services at the lowest cost in the industry
• Differentiation is a competitive strategy in
which a firm succeeds by developing and
maintaining a unique value for the product as
perceived by consumers
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