Managerial Accounting by Nathan Guannan Zhang

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Information about Managerial Accounting by Nathan Guannan Zhang
Business & Mgmt

Published on December 22, 2008

Author: ShenshuaiOne

Source: slideshare.net

Description

a presentation I did for ACC 182

All Chapters Managerial Accounting

Nathan Zhang Chapter 01

Users/Decision Makers Purpose of Info Flexibility of Practice Timeliness of Info Time Dimension Focus of Info Nature of Info I: Nature of Managerial Acc:

Users/Decision Makers

Purpose of Info

Flexibility of Practice

Timeliness of Info

Time Dimension

Focus of Info

Nature of Info

Users: Managers, Employees, Purchasing, Marketing, Senior management NOT: investors, the SEC, the IRS, creditors, analysts I: Users/Decision Makers

Users: Managers, Employees, Purchasing, Marketing, Senior management

NOT: investors, the SEC, the IRS, creditors, analysts

Used for: planning controlling I: Purpose of Info

Used for:

planning

controlling

GAAP not required Nonmonetary items permitted Standardizing is difficult, if not impossible. I: Flexibility of Practice

GAAP not required

Nonmonetary items permitted

Standardizing is difficult, if not impossible.

Past, present, and future all included Historical data as well as predictions Used to check accuracy of predictions. I: Timeliness of Info

Past, present, and future all included

Historical data as well as predictions

Used to check accuracy of predictions.

Budgets predict the future Past, present, as well as future. I: Time Dimension

Budgets predict the future

Past, present, as well as future.

Top, middle and low-level managers. Managerial data. I: Focus of Info

Top, middle and low-level managers.

Managerial data.

Monetary Nonmonetary I: Nature of Info

Monetary

Nonmonetary

Lean Business Model Lean Practices I: Lean Management

Lean Business Model

Lean Practices

Customer Orientation expect company to offer right product or service at right time and right price all business is worked around the customer I: Lean Business Model

Customer Orientation

expect company to offer right product or service at right time and right price

all business is worked around the customer

Continuous Improvement (CI) Total Quality Management (TQM) Just-In-Time Manufacturing (JIT) I: Lean Practices

Continuous Improvement (CI)

Total Quality Management (TQM)

Just-In-Time Manufacturing (JIT)

Fixed Cost Doesn't change per unit based on volume Doesn't change overall based on volume Variable Cost Doesn't change per unit based on volume Changes overall based on volume I: Classification by Behavior

Fixed Cost

Doesn't change per unit based on volume

Doesn't change overall based on volume

Variable Cost

Doesn't change per unit based on volume

Changes overall based on volume

Cost object Thing to trace Direct Cost Traceable to single cost object Indirect cost Can't be traced to single cost object May be traced to all cost objects May be traced to severall cost objects. I: Classification by Tracing

Cost object

Thing to trace

Direct Cost

Traceable to single cost object

Indirect cost

Can't be traced to single cost object

May be traced to all cost objects

May be traced to severall cost objects.

Controllable Not Controllable I: Classification by Control

Controllable

Not Controllable

Sunk Cost Always irrelevant Out-of-pocket cost Sometimes relevant Opportunity Cost What you lose (one thing) for taking another thing - sometimes relevant I: Classification by Relevance

Sunk Cost

Always irrelevant

Out-of-pocket cost

Sometimes relevant

Opportunity Cost

What you lose (one thing) for taking another thing - sometimes relevant

Product Period I: Classification by function

Product

Period

Raw Materials Inventory Works in Process (WIP) Inventory Finished Goods (FG) Inventory I: Necessary Documents

Raw Materials Inventory

Works in Process (WIP) Inventory

Finished Goods (FG) Inventory

Direct Materials (DM) Direct Labor (DL) Factory Overhead (FOH) Prime & Conversion Costs Reporting Performace I: Cost Effects

Direct Materials (DM)

Direct Labor (DL)

Factory Overhead (FOH)

Prime & Conversion Costs

Reporting Performace

(End of Ch 01)

Nathan Zhang Chapter 02

DM+DL+FOH=Total Mfg Cost (TMC) Raw Materials = RM; B/E=Begin/End ERM+TMC-BRM=Cost of Goods Mfg (COGM) EFG+COGM-BFG=Cost of Goods Sold (COGS) Sales - COGS - Sellling Exp. - Adm. Exp. = Net Income (NI) II: Job Order Costing

DM+DL+FOH=Total Mfg Cost (TMC)

Raw Materials = RM; B/E=Begin/End

ERM+TMC-BRM=Cost of Goods Mfg (COGM)

EFG+COGM-BFG=Cost of Goods Sold (COGS)

Sales - COGS - Sellling Exp. - Adm. Exp. = Net Income (NI)

POHR = Predetermined Overhead Rate POHR = Est. OH Costs / Est. Activity Base Activity Base usually is DL II: Predetermined Overhead

POHR = Predetermined Overhead Rate

POHR = Est. OH Costs / Est. Activity Base

Activity Base usually is DL

(End of Ch 02) (End of Ch 02)

Nathan Zhang Chapter 03

EUP = Equivalent Units of Production Solving EUP: some % DM + some % DL = Process 01. Then some % DM + some % DL = Process 02. Then take "some %" and add all "some %"'s together to get EUP. III: Process Order Costing

EUP = Equivalent Units of Production

Solving EUP: some % DM + some % DL = Process 01. Then some % DM + some % DL = Process 02. Then take "some %" and add all "some %"'s together to get EUP.

If there are no BWIP and no EWIP, then take "Total cost assigned to Process (DM, DL, OH)" and divide that by "Total number of units started and ended this period" to get EUP III: EUP, Cont'd

If there are no BWIP and no EWIP, then take "Total cost assigned to Process (DM, DL, OH)" and divide that by "Total number of units started and ended this period" to get EUP

(End of Ch 03)

Nathan Zhang Chapter 04

Unit Level Activities Batch Level Activities Product Level Activities Facility Level Activities IV: Activity Based Costing

Unit Level Activities

Batch Level Activities

Product Level Activities

Facility Level Activities

Identify (ID) activities and cost pools (see previous slide) Trace OH costs to cost pools Determine activity rate Assign OH costs to cost objects IV: ABC Method

Identify (ID) activities and cost pools (see previous slide)

Trace OH costs to cost pools

Determine activity rate

Assign OH costs to cost objects

Cost to implement and maintain ABC systems is extremely high for most industries other than computer and auto mfg. Uncertainty with decision making remains even after full-scale implementation of ABC systems IV: Disadvantages of ABC

Cost to implement and maintain ABC systems is extremely high for most industries other than computer and auto mfg.

Uncertainty with decision making remains even after full-scale implementation of ABC systems

More accurate OH cost allocation More effective OH cost control Focus on relevant factors Better mgt of activities IV: Advantages of ABC

More accurate OH cost allocation

More effective OH cost control

Focus on relevant factors

Better mgt of activities

(End of Ch 04)

Nathan Zhang Chapter 05

Cost-Volume-Profit (CVP) Analysis fixed costs (FC) fixed overhead (FOH) variable costs (VC) DM DL variable overhead (VOH) mixed costs V: Cost-Volume-Profit (CVP)

Cost-Volume-Profit (CVP) Analysis

fixed costs (FC)

fixed overhead (FOH)

variable costs (VC)

DM

DL

variable overhead (VOH)

mixed costs

CVP analysis step-wise costs curvilinear costs V: CVP, Cont'd

CVP analysis

step-wise costs

curvilinear costs

scatter diagrams high-low method least-squares regression V: Cost Charts

scatter diagrams

high-low method

least-squares regression

CM per unit = Sales price per unit - Total VC per unit CM Ratio (CMR) = CM per unit / Sales price per unit V: Contribution Margin (CM)

CM per unit = Sales price per unit - Total VC per unit

CM Ratio (CMR) = CM per unit / Sales price per unit

Breakeven Point (BEP) in units = FC / CM per unit BEP in $$ = FC / CMR V: Breaking Even

Breakeven Point (BEP) in units = FC / CM per unit

BEP in $$ = FC / CMR

Dollar sales at target aftertax income = (FC + target pretax income) / CMR Unit sales at target aftertax income = (FC + target pretax income) / CM per unit Margin of safety (MoS :: %) = (expected sales - BEP in $$) / expected sales Revised BEP in $$ = Revised FC / Revised CMR V: Target Aftertax Income

Dollar sales at target aftertax income = (FC + target pretax income) / CMR

Unit sales at target aftertax income = (FC + target pretax income) / CM per unit

Margin of safety (MoS :: %) = (expected sales - BEP in $$) / expected sales

Revised BEP in $$ = Revised FC / Revised CMR

Composite Unit = EG Basic + Home Premium + Business + Ultimate (Win Vista here...) = EG some composite value Do same for sales & VC take sales - VC = CM per composite unit BEP in composite units = FC / CM per composite unit V: Composite Units

Composite Unit = EG Basic + Home Premium + Business + Ultimate (Win Vista here...) = EG some composite value

Do same for sales & VC

take sales - VC = CM per composite unit

BEP in composite units = FC / CM per composite unit

(End of Ch 05)

Nathan Zhang Chapter 06

Absorption (ABS): Fixed overhead included (IE DM + DL + VOH + FOH) in Product Cost Variable (VAR): Fixed overhead not included (IE DM + DL + VOH) in Product Cost VI: Absorption VS Variable Costing

Absorption (ABS): Fixed overhead included (IE DM + DL + VOH + FOH) in Product Cost

Variable (VAR): Fixed overhead not included (IE DM + DL + VOH) in Product Cost

VI: Comparison, Inc. St.'s ABS Inc St Revenues Sales Expenses COGS Selling Exp. Adm Exp. Net Income (Loss) VAR Inc St Sales Variable Expenses CM Fixed Expenses Net Income (Loss)

(End of Ch 06)

Nathan Zhang Chapter 07

Master Budget ops budgets sales budget merchandise purchasing budget production budget mfg budget selling expense budget gen. & adm. exp. budget VII: Budgeting

Master Budget

ops budgets

sales budget

merchandise purchasing budget

production budget

mfg budget

selling expense budget

gen. & adm. exp. budget

Capital expenditures budget Financial Budgets cash budgets budgeted income statement budgeted balance sheet VII: More Budgeting

Capital expenditures budget

Financial Budgets

cash budgets

budgeted income statement

budgeted balance sheet

(End of Ch 07)

Nathan Zhang Chapter 08

Cost variance = actual cost - standard cost actual cost = actual price/rate * actual qty/hrs standard cost = standard "/" * standard "/" VIII: Cost Variances

Cost variance = actual cost - standard cost

actual cost = actual price/rate * actual qty/hrs

standard cost = standard "/" * standard "/"

Price variance = [actual price - std price] x actual qty Quantity variance = [actual qty - std qty] x std price Rate var (labor) = [actual rate - std rate] x actual hrs Efficiency var (labor) = [actual hrs - std hrs] x std rate VIII: Cost Var Cont'd

Price variance = [actual price - std price] x actual qty

Quantity variance = [actual qty - std qty] x std price

Rate var (labor) = [actual rate - std rate] x actual hrs

Efficiency var (labor) = [actual hrs - std hrs] x std rate

Spending var (OH) = actual overhead -/+ budgeted overhead Efficiency var (OH) = applied overhead -/+ budgeted overhead VIII: Cost Var Cont'd

Spending var (OH) = actual overhead -/+ budgeted overhead

Efficiency var (OH) = applied overhead -/+ budgeted overhead

(End of Ch 08)

Nathan Zhang Chapter 11

Payback period = Cost of Investment / Annual Cash Flows XI: Payback Period

Payback period = Cost of Investment / Annual Cash Flows

Take the annual cash flows and multiply with a total "value of I" factor first, add up all the "value of I" factors into a total "value of I" factor XI: Net Present Value

Take the annual cash flows and multiply with a total "value of I" factor

first, add up all the "value of I" factors into a total "value of I" factor

SRR = Annual aftertax NI(L) / Annual Avg. Investment Annual avg. investment = (Beg. book value + End. book value) / 2 XI: Simple Rate of Return

SRR = Annual aftertax NI(L) / Annual Avg. Investment

Annual avg. investment = (Beg. book value + End. book value) / 2

Take amt. invested / net cash flows = factor of an annuity of I take factor and look up in "PV of an annuity of I" table to find IRR XI: Internal Rate of Return

Take amt. invested / net cash flows = factor of an annuity of I

take factor and look up in "PV of an annuity of I" table to find IRR

(End of Ch 11)

Final Chapter Nathan Zhang Chapter 12

To report all cash and noncash inflows and outflows XII: Purpose of Cash Flow Statement

To report all cash and noncash inflows and outflows

(End of Ch 12)

(End of Presentation) Have a nice day!

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