Accounting 6350'015T Week 4

1
Accounting 6350.015T -- Week 4

• Gary Spraakman
• Assignment 2 Due
• Lecture Standard Costs and Variances, Chapter
  16
• Course package reading
• Case
• Class discussion

2
Chapter 16

• Standard Costing, Variance Analysis, and Kaizen
  Costing
• -- See slides

3
Course Package Reading, SPC

• Management Control Systems How SPC Enhances
  Budgeting and Standard Costing.
• Typically management accounting uses standards
  and budgets for control
• SPC is an alternative
• Focus on the system, whose performance can be
  expressed as a mean and variance
• The distribution is based on the
  system/technology
• The role of the individual is separate from the
  system
• Accountants need to understand the system in
  establishing standards and budgets

4
SPC, continued

• A variance provides an opportunity to understand
  the causes
• The elimination of the unfavourable variance
  increases the mean. Replication of the positive
  variance increases the mean
• Management is responsible for improving the
  performance of the system

5
ERP Systems

• See slide, Pre-ERP Systems
• See slide, ERP Systems

6
Strategy

• SourcegtEnhancegtAggregategtDisseminateltInteract

7
ERP Modules

• Financial accounting
• Controlling
• Asset management
• Treasury
• Investment management

8
ERP Standards and Budgets

• Activity, an instruction to perform a task within
  a network in a set period of time.
• Physical and financial formulae -gt standards
• Standard refer to product or service units
• Budgets refer to organizational units which
  produce products or services

9
ERP Beyond Budgeting

• A movement by a group of corporations that with
  ERP systems assists corporations to move beyond
  annual cycles and fixed budgets and toward
  continuous, inclusive planning and more flexible
  decision making.

10
Case Coffee Maker Supreme

• What is the required
• Suggested format
• Introduction
• Issue
• Analyses
• Recommendation
• Conclusion

11
Root issues

• Product quality has decreased
• Inspections reduced
• Defective products shipped

12
Analyses

• Inspections reduced
• Defective products shipped or damaged
• Products returned
• Financial variances
• Non-financial variances
• Cost of quality report
• New features appreciated

13
Recommendations

• Inspect 100
• Determine sources of defects
• Resolve quality problems
• Focus on the system

14
Class Discussion

• HMSS 16.17, 16.36. 16.40