Introduction Chapter 1

IntroductionChapter 1 ME 2027 Performance and Cost Analysis ME 2605 Cost Management and Control (for IMIM) Håkan Kullvén, KTH, 2007 Hakan.kullven@indek.kth.se

Accounting is… “The process of identifying, measuring and communicating economic information to permit informed judgments and decisions by users of the information” Page 5

Management vs. Financial Accounting • Legal requirements • Focus • GAAP, Generally accepted accounting principles • Time dimension • Report frequency

We use management accounting for… • Profit reporting • Decisions • Planning • Control • Performance measurement

Changing environment • Competition • Privatization and deregulation • Changing product life cycles • Focus on customer satisfaction • Ethical discussions • Information technology impacts

Rational Decisions? • The objectives as starting points • Courses of actions next • From this, data is gathered and analyzed • The “best” action is selected and implemented • Feedback to the decision and its outcome

Next we… define what a cost is, and introduce some terms and concepts concerning costs. In this, we also look at some ways to assign costs, ways that will be further investigated later on in the course Chapters 2 and 3

Introduction Chapter 1

Introduction Chapter 1

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Introduction – Chapter 1

Chapter 1: Introduction

Chapter 1: Introduction

Chapter 1: Introduction

Chapter 1: Introduction

Chapter 1: Introduction

Chapter 1 - Introduction

Chapter 1 - Introduction

Chapter 1: Introduction

Chapter 1: Introduction

Chapter 1: Introduction

Chapter 1 Introduction

Chapter 1. Introduction

Chapter 1 Introduction

Chapter 1: Introduction

Chapter 1 Introduction

Chapter 1: Introduction

Chapter 1—Introduction

Chapter 1: Introduction

Chapter 1: Introduction

CHAPTER 1: Introduction

Chapter 1: Introduction