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Seminar 1
Course Introduction
ACCT5996
Management Accounting & Business Analysis
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About me …
Associate Professor Paul AndonO: Q3094 | P: 9385 5821 | E: [email protected]
Consultation: Mondays, 4pm-6pm, during teaching weeks
ACCT5996: Management Accounting & Business Analysis
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Available from Moodle.
Your first source of information for this course.
Contains relevant information about the structure of the
course and its requirements.
Familiarise yourself – it will be assumed you are aware of itscontents.
Let’s now review some of the key elements of
the course outline.
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Introducing the course outline
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“This course examines the use of financial and non-
financial information for the purpose of analysing
business processes to achieve superior
organisational performance. The course introduces
a number of management accounting tools andquantitative techniques that can be used to analyse
how business processes consume resources, create
value for a firm and its customers, and how they
may be examined for improvement opportunities.”
(Course Outline)
What is this course about?
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Seminar preparation and structure
Readings and seminar questions
3 hours, combined lecture and tutorial
Topics outlined in Course Schedule
Assessment
3 in-class quizzes (Weeks 4, 8 and 12) –
10% each
Final examination (Exam Period) – 70%
Course structure and approach
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NEW BOOK: Langfield-Smith et al
Management Accounting: Information
for Creating and Managing Value (7th
edition)
Available from bookshop
Other readings (distributed separately)
Note: Photocopying textbooks is illegal.
You will not be allowed to attend classwith a photocopied textbook.
Course materials
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Special consideration
UNSW policy will be strictly applied
Special consideration is not automatic
Special consideration is for illness or misadventure – it is
not a ‘second bite at the cherry’.
Staff Consultation Staff contact and consultation details are on Moodle
You are welcome to consult any ACCT5996 staff member
Be proactive in seeking assistance: don’t leave it until it’s
too late Email
Correspondence only through official UNSW account
Other important issues
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Seminar 1
Basic Management
Accounting Concepts
UNSW Business School
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1. Describe management accounting, its general
objectives, and its role in an organization
2. Define basic terms and concepts associated with
cost accounting systems and cost assignment.
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Seminar objectives
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Seminar Objectives L&S Chapters and Objectives
LO1 Textbook CH1: LO1.2, LO1.3, LO1.5, LO1.7,
LO1.8
LO2 Textbook CH2: LO2.1-LO2.10
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Mapping to the required readings
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Questions to think about:
1. What does it involve?
2. What is it useful for?
3. How is it different from financial
accounting?
4. What are some helpful MA tools?
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“Keeping it Real”: What is Mgmt Acctg?
ACCT5996: Management Accounting & Business Analysis
- internal- inform manager to make a good solution
- decision making
past future
external internalregulation by standards not
F M
http://www.youtube.com/watch_popup?v=0J5O3mvkBOk
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Management accounting definition
Processes and techniques that focus on the
effective and efficient use of organisational
resources to support managers in their
tasks of enhancing both customer value
and shareholder value.
ACCT5996: Management Accounting & Business Analysis
doing more thing with the same resourceachive the outcome
HRFinancial resource
Productstechnological resourcesPhysical resources
Coca-cola management accounting:
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Planning
Formulating the future directionand resourcing of operations
Controlling
Putting mechanisms in place to
ensure that operations proceedaccording to plan and that
objectives are achieved.
Decision making
Making value-adding choices that
drive business forward
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Key management accounting priorities
ACCT5996: Management Accounting & Business Analysis
the project also required a lot of additional information that was not availablefrom routine mgmt accounting reports (budgets, performance, produce reports)
(infrequently inf)
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Seminar Exercise 1 - E1.26 Page 29
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Management v financial accounting
ACCT5996: Management Accounting & Business Analysis
3. climate may effect revenue, more cold drink and foods
4. short-term agency staff to reduce cost of insurance, ...
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Produce the information required by managers to create
value and manage resources.
Components may include
Costing systems
Budgeting systems
Performance measurement systems
Cost management systems
Traditional versus modern approaches
Responding to changes in the business environment
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Management accounting systems
MAS
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book p39
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Why do management accountants pay so much attention
to costs? Historic focus on production costs
Ready availability of cost data
Importance of cost information
Non-financial information is increasingly important inmodern management accounting systems
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Emphasis on costs
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What are they?
Resources given up to achieve a particular objective. Generally, costs areincurred to obtain future benefits.
Benefits extending beyond current period assets
Benefits confined to current period expenses
Example:
I buy 300 pens for resale at $1 each
Cost = 300 x $1 each = $300
Assume 100 pens sold COGS = $100 (expense) Inventory = $200 (asset)
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Costs
ACCT5996: Management Accounting & Business Analysis
giới hạn trong
vượt ra ngoài
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Seminar Exercise 2: E2.21 Page 58
Seminar Exercise 3: E2.22 Page 58
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Cost classifications
ACCT5996: Management Accounting & Business Analysis
Prime Costs
Conversion Costs
supervision, manufacturing based, not really involved inmanufacturing activities but affect manufacturing process
chi phí gốc
direct
indirect(both fixed &variable)
Traceability
Behaviour
both, commonly variable
fixed
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Much like people, to understand costs we also need to
appreciate how they behave.
Level of activity, and associated cost drivers
Basic distinction: variable (changes in direction proportion to change in
activity) and fixed (remains unchanged despite change in activity)
We will explore this more next week
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Classifying costs by behaviour
ACCT5996: Management Accounting & Business Analysis
100 cans of Coca-cola or 1000 cans=> sugar changes
cost of machine
1. variable and fix
http://www.businessinsider.com.au/how-not-to-behave-infographic-2015-5?r=US&IR=T
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Measuring cost objects is an important management
accounting function Items for which management wants a separate measure of costs
e.g. products, projects, departments, customers, suppliers.
Direct costs physically observable relationship between cost
and cost object. e.g. Direct labour, various raw materials
Indirect costs cannot be economically identified with or
traced to a cost object
e.g. supervision, inspection, handling, maintenance
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Classifying costs: Traceability
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2. nguồn gốc direct or indirect
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Cost object
Direct costs
Indirect
costs
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“Keeping it real”: IKEA and traceability
ACCT5996: Management Accounting & Business Analysis
handling
product design
(direct or indirect)
maintenance
security
inspection
electricity
labour
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Ideally, managers should be held responsible only for costs
they can control or significantly influence Important for motivating managers to properly improve performance
Some costs are controllable in the long term but not in the
short term
Depends on time period committed to for certain costs
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Classifying : Controllable/uncontrollable
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3.
computing equipment lease= control long-term (10yr negotiated), short term(uncontrollable rental cost)
not able to influence the pricecharged by suppliers
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The value chain
A set of linked processes or activities that begins with acquiringresources and ends with providing and supporting products and services
that customers value
Various cost classifications can be used within the upstream,
downstream and manufacturing areas
Seminar
Exercise 4:
E2.24Page 59
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Classifying costs: Value chain
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Classifying: Cost flows and financial records
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period costs = costs are deducted as expenses during the current periodwithout ever being included in the value of stock held
product costs = identified with a finished product as part of value stock become expenses COGS only when the stock is sold
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Read through the course outline.
Buy the text book ASAP.
Read through the prescribed readings.
Complete seminar questions (as provided on Moodle).
Once again – WELCOME TO ACCT5996I hope you find this an enjoyable and productive course.
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To do list (for next week)
ACCT5996: Management Accounting & Business Analysis