Management Accounting

1. Management Accounting 2010 Second semester Takayuki Asada

2. 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.

3. 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

4. 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

5. 10) January5th ,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

6. 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)

7. 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.

8. 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.

9. 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

10. 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.

11. 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

12. Exhibit 1-3 Financial and management accounting basic features Financial accounting Management accounting Audiences External:stockholders, Internal: Workers,manager,exec. creditors,tax autohrities Purpose Report on past performance Inform internal decisions made by to external parties; provide a employees and managers;feed- contracting basis back and control on operating Timeliness Delayed;historical Current;future oriented Restrictions Regulated;rules driven by generally No regulations;systems and inf- accepted accounting principles and mation determined by mana- government authorities gement to meet strategic or- Type of Financial measurements only Financial plus operational and Information physical measurement on pro- cesses,tech.,suppliers,custo- mers Nature of Objective,auditable,reliable, More subjective and judgement- Informantion consistent, precise tal;valid,relevant,accurate Scope Highly aggregate,report on Disaggregate;ifrom local deci- entire organization sion 2 Differences between management accounting and financial accounting

13. 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.

14. 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.

15. 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 (customerperspective) and the potential for failures(the process perspective) . 7.Management Accounting and Control in service organizations

16. 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