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BUS 122A (Section 04)

Managerial Accounting & Control Systems. BUS 122A (Section 04). Class Days/Time: MW 15:00 – 16:15 Prerequisites: BUS 20 with a minimum grade of "C" Instructor: Dr. Yao Tian Office Hours: Mon./Wed. 13:45 – 14:45, Tue. 9:00 – 11:00 Office Location: BUS 953 Telephone:(408) 924-3482

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BUS 122A (Section 04)

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  1. Managerial Accounting & Control Systems BUS 122A (Section 04) • Class Days/Time: MW 15:00 – 16:15 • Prerequisites: BUS 20 with a minimum grade of "C" • Instructor: Dr. Yao Tian • Office Hours: Mon./Wed. 13:45 – 14:45, Tue. 9:00 – 11:00 • Office Location: BUS 953 • Telephone:(408) 924-3482 • Email: yao.tian@sjsu.edu

  2. Agenda • Welcome to BUS 122A • Course Syllabus • Introduction to Managerial Accounting • What is it? • How is it different from Financial Accounting?

  3. Areas of Accounting Accounting Financial Accounting Managerial Accounting External users: investors Internal users: managers Decision making, planning, control Auditing, investing

  4. Financial vs. Managerial Accounting

  5. A.J. is the owner-manager of the Boomtown Bistro, a fine-dining establishment located in San Jose. He opened the restaurant in January 2009. It serves dinner 7 days a week, and lunch Monday through Friday. Two recent developments concern him: Increased competition for customers, especially during lunch time. Increased staff turnover and difficulty in hiring enough staff. The income statement and balance sheet for 2011 are provided on the next two slides. Case Study: Boomtown Bistro

  6. Example: Boomtown Bistro Income Statement

  7. Boomtown Bistro Balance Sheet

  8. The intensified competition for customers and difficulty in finding staff are worst during lunch hours. Therefore, A.J. is thinking of no longer serving lunch. He would only open for dinner, when competition is relatively less intense and staffing is not quite as difficult. A.J. also has been offered the opportunity to relocate his restaurant to a more attractive location on Jasper Avenue, where he would lease space in a new building (ready for use) and probably attract more customers. Therefore, A.J. has two decisions to make, as summarized on the next slide. Case Study: Boomtown Bistro

  9. Case Study: Boomtown Bistro Two decisions, each with two choices (2 x 2 matrix):

  10. How should A.J. go about making these decisions? Specifically: On what basis should he make these decisions? (What criteria should he use?) What information should he collect? What analysis should he prepare? Case Study: Boomtown Bistro

  11. Managerial Accounting Managerial accounting is a field of accounting that provides economic and financial information for managers and other internal users. Managerial accounting applies to all types of businesses. • Corporations • Proprietorships • Partnerships • Not-for-profit

  12. Managerial Accounting Basics Management Functions Planning Directing Controlling • Maximize short-term profit and market share. • Commit to environmental protection and social programs. • Add value to the business. • Coordinate diverse activities and human resources. • Implement planned objectives. • Provide incentives to motivate employees • Hire and train employees. • Produce smooth-running operation. • Keeping activities on track. • Determine whether goals are met. • Decide changes needed to get back on track. • May use an informal or formal system of evaluations.

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