Cost Accounting – 12^th Edition

Ch 1 Terms

Attention directing- role of management accounting that helps managers focus on opportunities and problems.

Budget- quantitative expression of a proposed plan of action by management for a specified period and is an aid to coordinating what needs to be done to implement that plan

Certified in Financial Management (CFM)- certifies that the holder has met the admission criteria and demonstrated the competency of technical knowledge in financial management required by the Institute of Management Accountants

Certified Management Accountant (CMA)- certifies that the holder has met the admission criteria and demonstrated the competency of technical knowledge in management accounting required by the Institute of Management Accountants

Chief financial officer (CFO)- executive responsible for overseeing the financial operations of an organization

Control- taking action that implement the planning decisions, and deciding how to evaluate performance and what feedback to provide that will help future decision making

Controller- the financial executive primarily responsible for management accounting and financial accounting

Cost accounting- measures and reports financial and non-financial information relating to the cost of acquiring or consuming resources in an organization. It provides information for both management accounting and financial accounting

Cost-benefit approach- approach to decision-making and resource allocation based on a comparison of the expected benefits from attaining company goals and the expected costs

Cost management- the approaches and activities of managers in short-run and long-run planning and control decisions that increase value for customers and lower cost of products and services.

Customer service- providing after-sale support to customers

Design of products, services, or processes- the detailed planning and engineering of product, services, or processes

Distribution- delivering products or services to customers

Feedback- involves managers examining past performance and systematically exploring alternative ways to make better-informed decisions in the future.

Finance director- (see chief financial officer)

Financial accounting- measures and records business transactions and provides financial statements that are based on generally accepted accounting principles. It focuses on reporting to external parties.

Institute of Management Accountants (IMA)- a profession accounting organization. It is the largest association of management accountants in the U.S.

Line management- managers who are directly responsible for attaining the goals of the organization

Management accounting- measures and reports financial and non-financial information that helps managers make decisions to fulfill the goals of an organization. It focuses on internal reporting

Marketing- promoting and selling products or services to customers or prospective customers

Planning- selecting organization goals, predicting results under various alternative ways of achieving those goals, deciding how to attain the desired goals and communicating the goals and how to attain them to the entire organization

Problem solving- comparative analysis for decision making role of a management accountant

Production- acquiring, coordinating, and assembling resources to produce a product or deliver a service.

Research and development- generating and experimenting with ideas related to new products, services, or processes.

Scorekeeping- role of a management accountant focusing on accumulating data and reporting results to all levels of management describing how the organization is doing.

Staff management- staff who provide advice and assistance to line management

Strategic cost management- describes cost management that specifically focuses on strategic issues

Strategy- specifies how an organization matches its own capabilities with the opportunities in the marketplace to accomplish its objectives

Supply chain- describes the flow of goods, services, and information from the initial sources of materials and services to the delivery of products to consumers, regardless of whether those activities occur in the same organization or in other organizations.

Value chain- the sequence of business functions in which customer usefulness is added to products or services of a company