ACTG 321ACTG 321Agenda for Lecture 1Agenda for Lecture 1

•Course administration

• Introduction to cost accounting

•Turn in index card

•Break

•Entrance Survey

ACTG 321ACTG 321AdministrationAdministration

• Syllabus

• Course Requirements

• Course Materials and Resources

• How to Succeed

ACTG 321ACTG 321Course RequirementsCourse Requirements

Three Exams &

a Quiz57%

I n-Class Activities

13%

Final Exam30%

Grades will be posted to Blackboard

ACTG 321ACTG 321Course MaterialsCourse Materials

• Management Accounting Concepts and Techniques, by Dennis Caplan. Available from the bookstore and at www.IntroToCost.info.

• Optional materials: Cost Accounting: A Managerial Emphasis, by Horngren, Datar and Foster. Any recent edition (such as the 11th edition, copyright 2003)

Links Between Management Links Between Management Accounting and Other DisciplinesAccounting and Other Disciplines

Management Accounting

Financial Accounting

Operations Management

Strategy Finance

Marketing

M.I.S.

ACTG 321ACTG 321Agenda for Lecture 1Agenda for Lecture 1

•Course administration

• Introduction to cost accounting

•Turn in index card

•Break

•Entrance Survey

Lecture 1Lecture 1IntroductionIntroduction

• The allocation of scarce resources

• Management accounting defined

• Management accounting and financial accounting compared

• What happens when management accounting systems fail

Lecture 1Lecture 1IntroductionIntroduction

• The allocation of scarce resources

• Management accounting defined

• Management accounting and financial accounting compared

• What happens when management accounting systems fail

Question: What is the fundamental economic problem that we all face?

Answer:

The allocation of scarce resources

Accounting and Allocation of

Scarce Resources

FinancialAccounting

Accounting and Allocation of

Scarce Resources

FinancialAccounting

ManagementAccounting

Lecture 1Lecture 1IntroductionIntroduction

• The allocation of scarce resources

• Management accounting defined

• Management accounting and financial accounting compared

• What happens when management accounting systems fail

Definition of Management Accounting

Management accounting is the process of

identifying, measuring, and reporting

information about the economic events of

organizations for use by management

in planning, evaluation, and control.

Definition of Management Accounting

Management accounting is the process of

identifying, measuring, and reporting

information about the economic events of

organizations for use by management

in planning, evaluation, and control.

Definition of Management Accounting

Management accounting is the process of

identifying, measuring, and reporting

information about the economic events oforganizations for use by management

in planning, evaluation, and control.

Definition of Management Accounting

Management accounting is the process of

identifying, measuring, and reporting

information about the economic events of

organizations for use by management

in planning, evaluation, and control.

Definition of Management Accounting

Management accounting is the process of

identifying, measuring, and reporting

information about the economic events of

organizations for use by management

in planning, evaluation, and control.

Definition of Management Accounting

Management accounting is the process of

identifying, measuring, and reporting

information about the economic events of

organizations for use by management

in planning, evaluation, and control.

Lecture 1Lecture 1IntroductionIntroduction

• The allocation of scarce resources

• Management accounting defined

• Management accounting and financial accounting compared

• What happens when management accounting systems fail

Financial and Management Accounting, Compared

EXTERNAL USERS

INTERNAL USERS

MANAGEMENTACCOUNTING

FINANCIAL ACCOUNTING

Financial and Management Accounting, Compared

• Required

• Follows GAAP

• Usually Historical

• Highly condensed

• General use

• Optional

• No rules

• Forward-looking

• Can be detailed

• Tailored to specific needs

Financial Managerial

Financial and Management Accounting, Compared

EXTERNAL USERS

INTERNAL USERS

MANAGEMENTACCOUNTING

COST ACCOUNTING

FINANCIAL ACCOUNTING

Lecture 1Lecture 1IntroductionIntroduction

• The allocation of scarce resources

• Management accounting defined

• Management accounting and financial accounting compared

• What happens when management accounting systems fail

Headlines You ProbablyWon’t See

• “General Motor’s stock rose 3/8s of a point today on news that GM is installing a new cost accounting system”

NEW YORK TIMESOCTOBER 28, 1997

Oxford Health Plans said yesterday that it had been losing money because it fell behind in sending bills to customers and underestimated how much it owed doctors and hospitals. Shares fell 62%.

Stephen Wiggins, chairman of Oxford, said the company had belatedly discovered that many customers were not paying premiums, often because the company was late in sending bills.

Oxford acknowledged that it had fallen behind in payments to hospitals and doctors as it struggled with a new computer system.

With incomplete information in its computers, it had to advance money to doctors and hospitals without verifying that they were obeying Oxford's rules.

Mr. Wiggins said Oxford would add about 0.5% to spending on administration next year in an effort to insure there are no similar problems. “The important thing," he added, "is we're the same company we were on Friday, except our market value has dropped by half.”

ACTG 321ACTG 321Agenda for Lecture 1Agenda for Lecture 1

•Course administration

• Introduction to cost accounting

•Turn in index card

•Break

•Entrance Survey

Index Card• Your name• Nickname, if applicable (what you

want me to call you)• Your “hometown”• A current or past job that you have

found rewarding.• What you plan to do after you

graduate (5 or 6 words max.)

ACTG 321ACTG 321Agenda for Lecture 1Agenda for Lecture 1

•Course administration

• Introduction to cost accounting

•Turn in index card

•Break

•Entrance Survey

ACTG 321ACTG 321Agenda for Lecture 1Agenda for Lecture 1

•Course administration

• Introduction to cost accounting

•Turn in index card

•Break

•Entrance Survey