ACCTG 322

Strategy: the game plan that enables a company to attract customers.

Management accounting evaluates how well your company is
implementing strategy.
3 Customer Value Propositions
1. Customer Intimacy Strategy: understanding and responding to
individual customer needs
2. Operational Excellence Strategy: deliver products and services
faster, conveniently, lower prices
3. Product Leadership Strategy: offer higher quality products
What do management accountants do?
Supply management with information for PLANNING, DIRECTING AND
MOTIVATING, and CONTROLLING.
What does the company need this week? What do the employees need
to be motivated? What kind of system regulates processes? Budgeting
is the ultimate control.
Variances: thought material would cost $2, actually cost $2.50 must
explain why costs were higher. Management accounting deals with
variances a lot. If material actually cost $1.50, explain why its less
expensive is it lower quality? Cost savings are not always good.
Anything that varies from what is planned must be investigated by
management accountants.
Planning
1. Identify Alternatives
2. Select Alternative that Best Furthers Organization Objectives:
relevant costs, sunk costs, opportunity costs
3. Develop Budgets to Guide Progress Toward the Selected
Alternative
Directing and Motivating
Day to day work stuff
Controlling
Ensures that plans are being followed
Business Plans
Consists of information about the companys basic product and about
the steps to be taken to reach its potential market. It is a key
document for the organizations internal management and external use
in attracting creditors and investors. The business plan is more
operational than the strategy.

Comparison of Financial and Managerial Account ** on exam

Remember: Users, Rules, and Requirement
Financial
Managerial
External persons who make
Managers who plan for and control
financial decisions
an organization
GAAP/IFRS
Not bound by any prescribed
formats
Mandatory for external reports
Not mandatory
Managerial accounting doesnt care about the past like financial
accounting. Managerial account cares about how the future will be
better than the past.
Organizational Structure
Centralization vs Decentralization organizational structures
Controller: a member of the top management team who is in charge of
operations from an accounting perspective. Provides timely and
relevant data to support planning and control activities. Preparing
financial statements for external users. They are involves with day-today accounting. Operational accounting.
Treasurer: cash flow management. Makes sure there is cash. Finance
related.
Line positions are directly related to achievement of the basic
objectives of an organization, while staff positions support and assist
line positions.
Some wages are not expensed but rather added to assets as they are
added to the cost of assets. This is called costing wages.
Corporate Governance is the system by which a company is directed
and controlled.
1. Board of Directors: sets incentives and monitoring for top
management
2. Top Management: helps the company pursue the objectives of
shareholders
3. Shareholders
An effective corporate governance system should protect the interests
of all stakeholders.
1. Employees
2. Customers
3. Creditors
4. Suppliers
5. Community

This is corporate social responsibility

Business Process is a series of steps that are followed in order to carry
out some task in business
1. Research and Development
2. Product Design
3. Manufacturing
4. Marketing
5. Distributing
6. Customer Service
Each one of these steps requires planning, direction and motivation,
and control.
Push Strategy: low cost. Builds inventory and then sell.
Lean Production: 5 step approach. Pull manufacturing; responding to
the customer. Also called JIT production. Pull production == producing
to demand. Ex. Boing uses pull strategy.
There is no such thing as a perfect push or perfect pull strategy.
Supply chain management refers to the coordination of business
processes across companies to better serve end consumers. Wal-Mart
manages its suppliers by placing large orders, leading to reduced costs
for them.
Six Sigma: defects will be in the 6th standard deviation. Refers to a
process that generates no more than 3.4 defects per million
opportunities. It is a QUALITY CONCEPT. Low defect rate is a particular
value proposition. ** do not need to know details for exam. Just know
thats its basically quality control, very low defects.
Enterprise Systems (ERP): A single software system that integrates
data across an organization, thereby enabling all employees to have
simultaneous access to a common set of data. All data are recorded
only ONCE in the companys centralized database. Once recorded, it
will flow throughout the entire system. Ex. Oracle
Enterprise Risk Management: understanding risk and managing it. It is
negligent to not address risks or even fail to perform risk assessments.