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The accounting information system within an organization has two major subsystems : The financial accounting information system and the Cost management accounting information system
The individual product level, distorted products level, distorted product costs can cause managers to make significant decision errors. The Operational Control information system is a cost management subsystem designed to provide accurate and timely feedback concerning the performance of managers and others relative to their planning and control of activities.Operational control is a concerned with what activities should be perfomed and assessing how well they are perfomed. It focuses on identifying opportunities for improvement and helping to find ways to improve. Product cist information plays a role in this process, but by itself, is not sufficient.
Manufacturing management approaches such as the theory of constraints and just-in-time have allowed firms to increase quality, reduce inventories, eliminate waste, and reduce costs o Theory of constraints The theory of constraints is a method used to continuously improve manufacturing activities and nonmanufacturing activities. o Just-in-time Manufacturing Just-in-time manufacturing is a demand-pull system that strives to produce a product only when it is needed and only in the quantities demanded by customers. o Computer-integrated manufacturing Computer-integrated manufacturing is the automation of the manufacturing environment. Customer Orientation Firms are competing not only in terms of technology and manufacturing, but in the speed of delivery and response to deliver value to the customer. Companies must also satisfy the needs of internal customers, such as staff functions exist to support line functions. New Product Development Management recognizes that a high proportion of production costs are committed during the development and design stage of a new product. The requirement to control cost encourages the use of target costing and activity-based management. Total Quality Management Continuous improvement and elimination of waste are the two foundation principles that govern a state of manufacturing excellence. Manufacturing excellence is the key to survival in the todays worldclass competitive environment. Time as a Competitive Element
Time is the crucial element in all phases of the value chain. Decreasing non-value-added time appears to go hand-in-hand with increasing quality. Efficiency While quality and time are important, improving these dimensions without corresponding improvements in financial performance may be futile, if not fatal.
The cost and management accountant is responsible for generating financial information required by the firm for internal and external reporting. o Planning o Controlling o Continuous Improvement o Decision Making
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