Management Accounting
2010
Second semester
Takayuki Asada
Lecturer
We try to explain the contents from chapter 1
through 10 of this text book written by Kaplan
and et al.（Management Accounting,Fifth Edt.
,Prentice-Hall,2007)
After such presentations by teacher and your
assigned problems or exercises must be
explained by yourself. I expect all of audiences
to take part into this arguments.
Lecturing schedule
1) October 13 ,Chapter 1
What is Management Accounting ?
2) October 20,Chapter 2
Cost Management and Cost Behavior
3) October 27,Chapter 3
Traditional Cost Management Systems
4) November 10,Chapter 4
Activity-Based Cost Systems
5) November 17,chapter 5
Management Accounting Information for Activity and Process
Decisions
6) November 24,Chapter 6
Cost Information for Pricing and Product Planning
7) December 1st,
Japanese Management Accounting-target costing and TOC
8) December 8th ,Chapter 7
Management Accounting and Control Systems:Assessing Performance Over
the Value Chain
9) December 22, Chapter 8
Motivating Behavior in Management Accounting and Control Systems
10) January 5th ,Chapter 9
The Balanced Score-card and Strategy Map
11) January 12th,Chapter 10
Using the budgets to Achieve Organizational Objectives
12) January 19,Capter 12
Financial Control
13) January 26 ,Japanese Management Accounting
Design and Control of Decentralized Organization(Mini profit center or Ameber)
14) February 2, Toyota Systems or JIT and Costing for implementing JIT
Work for MS’s Students
Questions ,Exercise or Cases
Chapter 2 through 12 except for chapter 11,you
must write and answer each assigned problems
at the end of each chapter.(all of questions and
some exercises or a case)
Presents a report after Reading and summarized
papers to be assigned on 7) and 13)
Evaluations
1)Solution Papers of each assigned questions and excercises.
2)The number of your attendances into this class
3)Write a research report: based on the one of what you may choose the following
three subjects.
1.Why target costing was developed from Japanese automobile companies? Explain
the reasons or roots with using some theory.
2.What differences or similarities between ABC and ABM is essential for
understanding the sense applied into management innovation?
3.Why is Balanced score-card model or concepts applied into strategic practices of
large-scale companies with very short-time lag from academic paper’ topics about
it ?
4)The closing date for the submission of your solutions about 1) and a research report
into professor’s office is February 15(Tuesday),2011 by
Mail (asada@econ.osaka-u.ac.jp) or to department office of Economics as the hard
copy.
Chapter one
This chapter’s Goals
You will be able to:
understand and exploit the differences between management
accounting information and financial accounting information.
understand how the organization’s strategy drives the need for
different types of management accounting information.
Understand how financial accounting information provides an overall
measure of the organization’s Performance.
Realize how management accountants can develop non-financial
information that can predict and explain financial results.
Appreciate the behavioral and ethical issues faced by management
accountants.
Case:Cabinet by Design
CBD is a manufacturer to produce kitchen cabinets
to customer specifications
Production was on demand-only a customer could
trigger production.
There are three cabinet styles is
available:country ,contemporary and modern
JIT production and On-time delivery:”one time or
it’s free”
Problems:unexpectedly,profit growth leveled off.
Diane to a launch a full-scale investigations
1
Management Accounting Information
The needs of decision makers in the organization drive the scope
and focus of management accounting. We can predict the scope
by considering the three broad classes of decisions
making;Planning ,organizing and controlling.
Contemporary management accounting systems focus on decision
makers at all level in the organizations.
(1)senior executive communicate using financial information with
people outside the organization.
(2)manager at the down of hierarchy need to know more
nonfinancial information,the performance characteristics of the
systems they are monitoring and managing.
Exhibit 1.1 The role of management
Planning
focus;:What will I do?
Common information requirements:prospective costs and
revenues,information about competitors and customers,and
information about organization capabilities
Organizing
focus;:How will I carry out my plan?
Common information requirements: Prospective performance
data(such as costs,efficienies,and quality levels) of various
approaches to carrying out plans
Controlling
focus;:How am I doing and how does performance compare to my
plan?
Common information requirements: Product or production systems
cost,realized quality or service level of various production
systems,and perfoamnce levels compared to competitors
2 Differences between management accounting
and financial accounting
Exhibit 1-3 Financial and management accounting basic features
Audiences
Purpose
Financial accounting
External:stockholders,
creditors,tax autohrities
Management accounting
Internal: Workers,manager,exec.
Report on past performance
Inform internal decisions made by
to external parties; provide a
employees and managers;feedcontracting basis
back and control on operating
Timeliness Delayed;historical
Current;future oriented
Restrictions Regulated;rules driven by generally No regulations;systems and infaccepted accounting principles and mation determined by managovernment authorities
gement to meet strategic orType of
Financial measurements only
Financial plus operational and
Information
physical measurement on processes,tech.,suppliers,customers
Nature of
Objective,auditable,reliable,
More subjective and judgementInformantion consistent, precise
tal;valid,relevant,accurate
Scope
Highly aggregate,report on
Disaggregate;ifrom local decientire organization
sion
3 A Brief History of Management Accounting
1)The age of cost accounting system
2)Large-scale integrated companies change the
focus from cost accounting to management
accounting
3)The age from Japanese firms to enter into USA
with Japanese management systems;QFD
must be managed simultaneously.
4. Diversity of Management Accounting Information
Financial InformationUnderlying activates drive financial
resultsKey activities of any organization’s business-level strategy
to identify it is target customers and delivering what those target
customers want
1)price:the relative price the customer pays,given the product’s
features and competitors’ product features
2)Quality:the degree of conformance between what the customer is
promised and what the customer receives.
3)Functionality and features:the performance of the product relevant
to the customer.
4)Service: all the other elements of the product relevant to the
customer.
5. Nonfinancial Information and the value Proposition at CBD
The value propostion at CBD is flexibility,quality
and service
However,traditonal system did not provide the
true measure of realizing value proposition.
6. Delivering the Value Proposition
On investigation, Diane traces the quality complaints to two causes. Design
cause, and CBD use the problem materials not to protect the cabinets
from water entering
FinallyCBD needs to develop customer information and process information
so that it can monitor how well it is delivering its value proposition
(customer perspective) and the potential for failures(the process
perspective) .
7.Management Accounting and Control in service organizations
8 .Behavioral Implications of Management Accounting
Information
Management accountants must understand and anticipate the reactions of individuals to
information and measurements
9.Ethics and Management Accountant
Summary
1)focus on aggregate
2)Meeting customer’s requirements
3)Identify process improvements
4)Identify the potential of the organization’s members to improve process
performance
5)Enable the organizations to monitor and detect inappropriate organizational
behavior