which of the following are concepts taught in a managerial accounting course?

What are the common concepts and techniques of managerial accounting?

Share. A: The common concepts and techniques of managerial accounting are all the concepts and techniques that surround planning and budgeting, short- and long-term project decision making and operational measurement of performance.

How does managerial accounting meet the needs of both departments?

Managerial accounting is able to meet the needs of both departments by offering information in whatever format is most beneficial to that specific need. Managerial accounting involves the presentation of financial information for internal purposes to be used by management in making key business decisions.

Where can I take a managerial accounting course?

This course, developed at the Darden School of Business at the University of Virginia and taught by top-ranked faculty, will teach you the fundamentals of managerial accounting including how to navigate the financial and related information managers need to help them make decisions.

What is the difference between managerial accounting and accounting?

Updated Mar 8, 2019. Accounting is the process of record keeping for all financial transactions conducted by a business or organization. Managerial accounting uses the accounts for budgeting and planning purposes and to measure the company's performance.

What is managerial accounting?

Managerial accounting is the process of identifying and analyzing financial information so that management personnel can make better-informed business decisions. Although the specific underlying details of managerial accounts may vary from one business to the next, they often itemize a company's spending practices, cash flow streams, debts, and assets. This type of information helps managers make more measured decisions. It also aids banks in evaluating whether or not a company is worthy of a business loan.

Why is accurate accounting important?

Accurate and relevant accounts are crucial to management accounting and shrewd decision-making by company leaders. If the accounting statements are inadequate, inaccurate, or incomplete, management may struggle to make appropriate choices when mapping out a company's long-term strategy.

What is managerial accounting?

Managerial accounting determines the costs of articles that are manufactured. All raw material costs, overhead, labor and any added costs are considered, and those totals are divided by the amounts of products produced.

Why is managerial accounting important?

Managerial accounting is very effective in highly competitive and fast-paced business environments where quick decisions need to be made . These decisions might have to do with a sales tactic, budgeting or cash flow management. Managerial accounting will use operational data to make sense of the situation quickly.

What is data collected in accounting?

The data collected encompasses all fields of accounting that informs the management of business operations relating to the costs of products or services purchased by the company. Managerial accountants use budgets to quantify the business’ plan of operations.

Why do managers use budget reports?

Managerial accounting reports use budget reports to help guide managers to offer better employee incentives, cut costs and renegotiate terms with vendors and suppliers.

What is overhead cost in accounting?

Overhead charges are calculated and allocated to come up with the actual cost related to the production of a product. These overhead expenses may include the number of goods produced or other drivers related to the production, such as the square foot of the facility. Along with overhead costs, managerial accountants use direct costs to assess the cost of goods sold and inventory that may be in different stages of production.

What percentage of variance is between budget and actual cost?

Managers know there is a 100 percent variance between budgets and actual costs. A managerial accountant would advise to increase their expectations on prices in their budget or move to another provider to meet their budget cost.

What is constraint analysis?

Constraint analysis indicates the limitations within a sales process or production line. Managerial accountants find out where the constraints occur and calculate the impact on cash flow, profit and revenue.

What is the difference between managerial and financial accounting?

The key difference between managerial accounting and financial accounting relates to the intended users of the information. Managerial accounting information is aimed at helping managers within the organization make well-informed business decisions , while financial accounting is aimed at providing financial information to parties outside ...

Why is managerial accounting important?

Because managerial accounting is not for external users, it can be modified to meet the needs of its intended users. This may vary considerably by company or even by department within a company. For example, managers in the production department may want to see their financial information displayed as a percentage of units produced in the period. The HR department manager may be interested in seeing a graph of salaries by employee over a period of time. Managerial accounting is able to meet the needs of both departments by offering information in whatever format is most beneficial to that specific need.

How does an accounts receivable aging report affect a company?

An accounts receivable aging report categorizes AR invoices by the length of time they have been outstanding. For example, an AR aging report may list all outstanding receivables less than 30 days, 30 to 60 days, 60 to 90 days, and 90+ days. Through a review of outstanding receivables, managerial accountants can indicate to appropriate department managers if certain customers are becoming credit risks. If a customer routinely pays late, management may reconsider doing any future business on credit with that customer.

How does accounts receivable affect the bottom line?

An accounts receivable aging report categorizes AR invoices by the length of time they have been outstanding. For example, an AR aging report may list all outstanding receivables less than 30 days, 30 to 60 days, 60 to 90 days, and 90+ days. Through a review of outstanding receivables, managerial accountants can indicate to appropriate department managers if certain customers are becoming credit risks. If a customer routinely pays late, management may reconsider doing any future business on credit with that customer.

What is cost accounting?

Cost accounting is a large subset of managerial accounting that specifically focuses on capturing a company's total costs of production by assessing the variable costs of each step of production, as well as fixed costs. It allows businesses to identify and reduce unnecessary spending and maximize profits.

What is overhead accounting?

The overhead expenses may be allocated based on the number of goods produced or other activity drivers related to production, such as the square footage of the facility. In conjunction with overhead costs, managerial accountants use direct costs to properly value the cost of goods sold and inventory that may be in different stages of production.

Why do companies have to conform to GAAP?

1 Most other companies in the U.S. conform to GAAP in order to meet debt covenants often required by financial institutions offering lines of credit.

Can you see lectures in audit mode?

Access to lectures and assignments depends on your type of enrollment. If you take a course in audit mode, you will be able to see most course materials for free. To access graded assignments and to earn a Certificate, you will need to purchase the Certificate experience, during or after your audit.

Does Coursera help me publish a book?

Coursera's timely course offerings helped me publish a book and re-establish myself in my field. I recommend Coursera to everyone!

Does Coursera give financial aid?

Yes, Coursera provides financial aid to learners who cannot afford the fee. Apply for it by clicking on the Financial Aid link beneath the "Enroll" button on the left. You’ll be prompted to complete an application and will be notified if you are approved. Learn more.

What is managerial accounting?

The users of financial accounting reports include shareholders (owners) of a corporation, creditors (those who lend money to a business), financial analysts, labor unions, and government regulators. Managerial accounting deals with activities inside the organization. (Most companies call this finance or corporate finance.) Managerial accounting has no rules and regulations, such as generally accepted accounting principles. Unlike financial accounting, which must use historical data, managerial accounting can and does use projections about the future. After all, managers make decisions for the future, not the past. Like all else in business, managerial accounting information must meet a managerial cost- benefit test. To justify providing managerial accounting information, the benefit from providing the information must exceed the cost of obtaining the information. New managerial accounting initiatives such as activity-based costing and the balanced scorecard (both discussed in later chapters), for example, must pass the cost-benefit test to be worth undertaking.

What is a good managerial accounting system?

A good managerial accounting system takes into account the economics of the industries in which the organization operates and the organization’s strategy. For example, suppose managers of a company called e-whatever.com realize that their industry has low barriers to entry; and the organization has competitors, both in ‘‘bricks’’ and in ‘‘clicks.’’ Furthermore, the company’s product is essentially a commodity (a product that is difficult to differentiate from those of competitors), despite the managers having spent millions of dollars to build brand equity. To compete effectively, the organization must excel at order fulfillment and manage costs both to keep prices competitive and to make a reasonable return on shareholders’ investment. E-whatever.com’s managerial accounting system must provide managers with cost informa- tion to help them assess product profitability, given the competitive market the company faces. It also must highlight problem areas in order fulfillment, such as delays in shipping and unexpectedly high purchase returns. In addition, the managerial accounting system must measure pricing and order fulfillment performance so that managers can reward people for doing well on such critical performance factors. Consider another type of strategic advantage, the learning phenomenon. Assume General Electric produces a complex navigational device for spacecraft. While other companies could produce it, General Electric has developed a strategic advantage because of the learning phenomenon. The learning phenomenon, which we discuss in detail in Chapter 5, means that General Electric’s labor costs per unit go down as it produces more of the navigational devices. By the time it produces the 40th navigational device, General Electric’s labor costs might be only a fraction of the costs of a new market entrant that is producing its first navigational device. General Electric’s managerial accounting system should track costs that are potentially subject to the learning phenomenon. It should inform managers how the learning phenomenon affects costs and helps managers predict product costs. The managerial accounting system should also help managers budget costs of production that are subject to the learning phenomenon. Shelter-Us is a nonprofit organization that operates a shelter for homeless people and provides transition housing for victims of domestic violence. The shelter receives donations from businesses and from private individuals, and it receives grants from various government agencies. The organization aims to provide adequate shelter at minimum cost. Its managers must consider the cost of various types of housing. For example, should the shelter build its own housing units or outsource housing to a local motel? The managerial accounting system for Shelter-Us should provide information about the costs of various types of shelter. Because the organization receives donations and grants, it should provide information about specific uses of funds received. For example, it should not use funds from a grant earmarked for victims of spousal abuse to provide meals for homeless people. These examples illustrate that the managerial accounting system should help managers implement an organization’s strategy. The system must be adapted to each organization’s objectives, strategy, and environment.

How do managers use information?

Managers must equip themselves with the tools and insights to act strategically about business opportunities. This book discusses how managers can use information—both financial and nonfinancial—to implement strategic plans and improve the process of providing goods and services to people. Organizational success typically requires intelligent use of information. About 80 percent of new businesses fail within five years after opening their doors, often because management does not use information to make good decisions, plan for growth, and forecast cash needs. For example, the Managerial Application ‘‘Why Managers Need Cost Information’’ tells of the early days of Domino’s Pizza, when the company nearly went bankrupt because of poor information. Organizations with poor information systems also have difficulty obtaining financing from banks, venture capitalists, and shareholders.

What is the most intellectually challenging area of management?

The noted management writer Peter Drucker calls accounting the most intellectually challenging and turbulent area in the field of management. Whatever yourcareer plans, the ideas in this book will help you meet those challenges. Chapters 1–3 lay the foundation for the rest of the book. Chapter 1 provides the groundwork for the book, including tying strategic cost analysis to the value chain. Chapter 2 shows you how cost systems work. Chapter 3 focuses on managing overhead costs, emphasizing activity-based costing and management. We emphasize cost management and the use of cost information to create strategic advantages.

What is on the exam view CD?

This CD contains the Solutions Manual, Instructor’s Manual,TestBankfilesinWord, ExamView 1, and PowerPoint slides.

What is the solution manual?

The Solutions Manual (by the text authors) contains responses to questions and solutions to all exercises, problems, and cases. The Solutions Manual is available on the Instructor’s Resource CD.

What is the instructor manual?

Saksena, Indiana University, South Bend) includes chapter overviews, learning objectives, lecture notes with teaching suggestions, and suggestions for group discussion, all focusing on the needs of M.B.A. instructors. The Instructor’s Manual is available on the Instructor’s Resource CD.