Maliyet Muhasebesi The Accountant’s Role in the Organization 1 - 1 The Accountant ’ s Role in the Organization Chapter 11 - 2 Introduction Modern cost accounting provides key * information to managers for their decision making. Cost accounting information is used in all * parts of manufacturing operation.1 - 3 Forms of Business Organizations Forms of business organizations according to the activities they perform are as follows: Service Companies * Merchandising Companies * Manufacturing Companies *1 - 4 Service Companies They perform services for a fee. * Cleaning firms, law offices, consulting firms, * travel agencies that take commission for every package or ticket they sell … are examples of service companies. They don ’ t have any goods on hand for resale. * They may have supplies to be used in * delivering services. Labor is the most significant cost category. *1 - 5 Service Companies B/S * Current assets: Cash… Accounts receivable… Supplies… …….. ……. No “inventory” account * I/S * Revenues: Service revenue… Expenses: Supplies expense… Rent expense… Salaries expense… ………. No “COGS” & “gross * profit” 1 - 6 Merchandising Companies They purchase ready-for-sale goods and * then sell them o the customers. Supermarkets, bookstores… are * examples of merchandising companies. They have one general class of * merchandising inventory in their warehouses. 1 - 7 Merchandising Companies B/S * Current assets: Cash… Accounts receivable… Inventories… …….. ……. One type of “inventory” * I/S * Revenues: Sales revenue… (-) COGS Gross profit…. Expenses: Rent expense… Salaries expense… ………. 1 - 8 Manufacturing Companies They buy raw materials, parts and convert * them into products (finished goods) for sale to the other companies or final consumers. They have commonly three types of * inventories in their warehouses; -raw materials -work-in-process -finished goods A manufacturing company must also develop, * design, market, and distribute its products. 1 - 9 Manufacturing Companies B/S * Current assets: Cash… Accounts receivable… Inventories… -raw materials -work-in-process -finished goods ………… I/S * For merchandising and manufacturing companies Revenues: Sales revenue… (-) COGS Gross profit…. Expenses: Rent expense… Salaries expense… ………. 1 - 10 Learning Objectives Identify three broad purposes of accounting 1 systems Describe cost accounting and its relation to 2 management accounting and financial accounting Distinguish between the planning and control 3 decisions of managers1 - 11 Learning Objectives Distinguish among the problem-solving, 4 scorekeeping, and attention-directing roles of a management accountant Describe the set of business functions in the 5 value chain Identify four key themes that are important to 6 managers attaining success in their planning and control decisions1 - 12 Learning Objectives Describe three guidelines that assist 7 management accountants increase their value to managers1 - 13 Learning Objective 1 Identify three broad purposes of accounting systems1 - 14 Major Purposes of Accounting Systems Internal routine reporting 1 Internal nonroutine reporting 2 External reporting 31 - 15 Internal Routine Reporting This purpose covers information provided for * decisions that occur regularly: Daily reports * Weekly reports * 1 2 3 4 5 6 7 8 9 1 0 1 1 1 2 1 3 1 4 1 5 1 6 1 7 1 8 1 9 2 0 2 1 2 2 2 3 2 4 2 5 2 6 2 8 2 9 3 0 3 1 2 71 - 16 Internal Nonroutine Reporting This purpose covers information for * decisions that occur irregularly Outsourcing *1 - 17 External Reporting This purpose covers information provided to * investors, government authorities, and other outside parties on the organization ’ s financial position, operations, and related activities.1 - 18 Learning Objective 2 Describe cost accounting and its relation to management accounting and financial accounting1 - 19 Management Accounting... measures and reports financial and – nonfinancial information that helps managers make decisions to fulfill the goals of an organization.1 - 20 Financial Accounting... focuses on reporting to external parties. – It measures and records business transactions. * It provides financial statements based on * generally accepted accounting principles.1 - 21 Cost Accounting... provides information for both management – accounting and financial accounting. It measures and reports financial and * nonfinancial data that relates to the cost of acquiring or consuming resources by an organization.1 - 22 Comparison of Financial and Managerial Accounting F i n a n c i a l A c c o u n t i n g M a n a g e r i a l A c c o u n t i n g 1 . U s e r s E x t e r n a l p e r s o n s w h o M a n a g e r s w h o p l a n f o r m a k e f i n a n c i a l d e c i s i o n s a n d c o n t r o l a n o r g a n i z a t i o n 2 . T i m e f o c u s H i s t o r i c a l p e r s p e c t i v e F u t u r e e m p h a s i s 3 . S u b j e c t P r i m a r y f o c u s i s o n F o c u s e s o n s e g m e n t s t h e w h o l e o r g a n i z a t i o n o f a n o r g a n i z a t i o n 4 . G A A P M u s t f o l l o w G A A P N e e d n o t f o l l o w G A A P a n d p r e s c r i b e d f o r m a t s o r a n y p r e s c r i b e d f o r m a t 5 . R e q u i r e m e n t M a n d a t o r y f o r N o t e x t e r n a l r e p o r t s M a n d a t o r y1 - 23 Cost Management... describes the activities of managers in short- – run and long-run planning and control of costs. It includes the continuous reduction of costs. * It is a key part of general management * strategies and their implementation.1 - 24 Corporate Organization Chart Purchasing Personnel Vice President Operations Treasurer Controller Chief Financial Officer President Board of Directors Organizational Structure1 - 25 Learning Objective 3 Distinguish between the planning and control decisions of managers1 - 26 What is Planning? It is deciding on organization goals, predicting * results under various alternative ways of achieving those goals, and then deciding how to attain the designated goals.1 - 27 What is Control? It is deciding and taking actions that * implement the planning decisions, and... deciding on performance evaluation and the – related feedback that will help future decision making.1 - 28 What are Budgets? They are quantitative expressions of a * proposed plan of action by management for a future time period and an aid to the coordination and implementation of the plan.1 - 29 What is a Performance Report? This is a report that compares actual results * with budgeted amounts. The performance report of the Seattle Specialty * shop for the month of July shows the following:1 - 30 Performance Report Seattle Specialty Shop, July 2000 Budget Actual Variance Revenues $57,000 $60,000 $3,000 F Cost of goods sold 40,000 43,400 3,400 U Wages 6,700 7,000 300 U General 1,300 900 400 F Fixed costs 5,000 5,000 ------- Operating income $ 4,000 $ 3,700 $ 300 U1 - 31 Performance Report The performance report indicates that although * actual revenues exceeded the budgeted amount by $3,000, operating income was $300 less than budgeted. The report could cause investigation and * further decisions. Did the purchasing department pay more than * expected for the merchandise?1 - 32 Performance Report Yes, actual cost of goods sold were 72% of * revenues instead of the budgeted 70%. Budget % Actual % * Revenues $57,000 100 $60,000 100 Cost of goods sold 40,000 70 43,400 72 Gross margin $17,000 30 $16,600 281 - 33 Feedback... involves managers examining past – performance and systematically exploring alternative ways to make better informed decisions in the future.1 - 34 Planning and Control Cycle Decision Making Formulating long- and short-term plans (Planning) Measuring performance (Controlling) Implementing plans (Directing and Motivating) Comparing actual to planned performance (Controlling) Begin Exhibit 1-21 - 35 Learning Objective 4 Distinguish among the problem- solving, scorekeeping, and attention-directing roles of a management accountant1 - 36 Problem Solving... involves comparative analysis for decision – making. This role asks, of the several alternatives * available, which is the best?1 - 37 Scorekeeping... involves accumulating data and reporting – reliable results to all levels of management. This role asks how is the business doing? *1 - 38 Attention Directing... involves helping managers properly focus – their attention. This role asks which opportunities and * problems should be emphasized first. Attention directing should focus on all * opportunities to add value to an organization, not just cost-reduction opportunities.1 - 39 Management Accountants... serve each of these three roles in both planning – and control decisions. The problem-solving role is most marked for * planning decisions. The scorekeeping and attention-directing roles * are most important for control decisions.1 - 40 Management Accountants... often are simultaneously performing two – or all of the problem-solving, scorekeeping, and attention-directing roles. Management accountants increasingly are * viewing managers as their customers.1 - 41 Learning Objective 5 Describe the set of business functions in the value chain1 - 42 Value Chain The term “value chain” refers to the sequence * of business functions in which usefulness is added to the products or services of an organization. The term “value” is used because as the * usefulness of the product or service is increased, so is its value to the customer.1 - 43 Value Chain Management accountants provide decision * support for managers in the following six business functions:1 - 44 Value Chain Distribution Management Accounting Service Marketing Production Design R & D1 - 45 Value Chain Research and development (R&D) – the process 1 that is conducted to generate and experiment with ideas related to new products, services, or processes. Design – the detailed planning and engineering 2 of products, services, or processes. Production – the acquisition, coordination, and 3 assembly of resources to produce a product or deliver a service.1 - 46 Value Chain Marketing – the manner by which companies 4 promote and sell their products or services to customers or prospective customers. Distribution – the delivery of products or 5 services to the customer. Customer service – the after-sale support 6 activities provided to customers.1 - 47 Value Chain and Classification of Costs-Computer Company Compaq Computer incurs the following costs: Electricity costs for the plant assembling products * Transportation costs for shipping the products * Payment to designer firm for the design of the Armada * Notebook Salary of computer scientist working on the next * generation of minicomputers Payment to television network for running Compaq * advertisements1 - 48 Continued Purchase of products of competitors for testing * against potential Compaq products Cost of Compaq employees ’ visit to a major * customer to demonstrate Compaq ’ s ability to interconnect with orher computers. Cost of cables purchased from outside supplier * to be used with the Compaq printer. Classify each of the cost items into one of the business functions of the value chain.1 - 49 Learning Objective 6 Identify four key themes that are important to managers attaining success in their planning and control decisions1 - 50 Key Themes in Management Accounting Customer Focus Success Factors Time, Quality, Cost, Innovation Continuous Improvement Value-Chain and Supply-Chain Analysis1 - 51 Customer Focus The challenge facing managers is to continue * investing sufficient (but not excessive) resources in customer satisfaction such that profitable customers are attracted and retained.1 - 52 Key Success Factors... are operational factors that directly affect the – economic viability of the organization. Cost – organizations are under continuous * pressure to reduce costs. Quality – customers are expecting higher * levels of quality.1 - 53 Key Success Factors Time – organizations are under pressure * to complete activities faster and to meet promised delivery dates more reliably. Innovation – there is now heightened * recognition that a continuing flow of innovative products or services is a prerequisite to the ongoing success of most organizations.1 - 54 Continuous Improvement Continuous improvement by competitors * creates a never-ending search for higher levels of performance within many organizations.1 - 55 Value-Chain and Supply- Chain Analysis This theme has two related aspects: * Treat each of the business functions in the 1 value chain as an essential and valued contributor. Integrate and coordinate the efforts of all 2 business functions in addition to developing the capabilities of each individual business function.1 - 56 Value-Chain and Supply- Chain Analysis Supply chain – describes the flow of goods, * services and information from cradle to grave, regardless of whether those activities occur in the same organization or other organizations.1 - 57 Learning Objective 7 Describe three guidelines that assist management accountants increase their value to managers1 - 58 Key Guidelines Cost-benefit approach 1 Full recognition to behavioral as well as 2 technical considerations Use different costs for different purposes 31 - 59 Cost-Benefit Approach A cost-benefit approach should be used in * order to spend resources if they promote decision making that better attains organization goals in relation to the costs of those resources.1 - 60 Behavioral and Technical Considerations A management accounting system should * have two simultaneous missions for providing information: To help managers make wise economic 1 decisions To help managers and other employees to aim 2 and strive for goals of the organization1 - 61 Different Costs for Different Purposes A cost concept used for the external reporting * purpose need not be the appropriate concept for the purpose of internal routine reporting to managers.1 - 62 Professional Ethics Marcia Miller is division controller and Tom * Maloney is division manager of the Ramses Shoe Company. Miller has line responsibility to Maloney, but also she has staff responsibility to the company controller. Maloney is under severe pressure to achieve the * budgeted division income for the year. He has asked Miller to book $200,000 of revenues on December 31. 1 - 63 Continued The customer ’ s order is firm, but the shoes are * still in the production process. They will be shipped on or about january 4. Maloney says to Miller, “the key event is getting the sales order, not shipping of the shoes. You should support me, not obstruct my reaching division goals.” Describe Miller ’ s ethical responsibilities. 1) What should Miller do if Maloney gives her a 2) direct order to book the sales1 - 64 Explanation According to GAAP, the sales are not * complete until the title is transferred to the buyer. Miller should refuse to Maloney ’ s orders. If * maloney persists, the event should be reported to the Corporate controller.1 - 65 End of Chapter 1