Introduction
Managerial accounting is an activity that provides financial and nonfinancial information to business managers and other internal decision-makers of an organization. This course examines how managerial accounting information is gathered, and how it is used by business professionals to make effective plans & decisions. Lessons such as fundamentals of managerial accounting cost accounting concepts, and managerial accounting approaches will provide you with the concepts, procedures, and analytical skills you'll need to make informed decisions in today's challenging business world.
Managerial accounting is not as widely used as other forms of accounting, nor is it as known. While companies concern themselves with financial accounting methods like audits, budgets, and financial statements, they often completely ignore the forward-thinking methods of managerial accounting.
Key points include:
- Managerial vs. financial accounting
- Cost-Volume-Profit analysis for decision making
- Make vs. buy decisions for planning
- Fixed vs. variable vs. mixed costs for control
- Capital budgeting that makes a difference
Course Objectives of Decision Making and Control
This course will help you learn how to:
- Cost terms and Concepts
- Cost Behavior: Analysis and Use
- Direct vs. Absorption Costing
- Overhead Costing for Planning and Control
- Standard Costs & Variance Analysis
- Relevant Costs for Decision Making
- Financial Statement Analysis
The Benefits of Decision Making and Control
- The improved appreciation for the accounting approach to planning
- Reduced inter-functional territorial battles
- Higher productivity during the decision-making process
- Increased skill set in all phases of accounting
- Greater ability to use managerial accounting information to control positive outcomes
Course Results of Decision Making and Control
By successfully completing this course, delegates will be able to:
- Define managerial accounting & its impact on the organization
- Make better decisions through the results calculated
- Maintain better control of all costs
- Plan more accurately using managerial accounting
- Describe policies and company components that affect managerial accounting
Course Outlines of Decision Making and Control
Day 1: Managerial Accounting: a perspective
- The role of Managerial Accounting
- Financial vs. Managerial Accounting
- Cost Accounting vs. Managerial Accounting
- The work of management
- The Organization aspects of Managerial Accounting
- Using Managerial Accounting for planning, decision-making & control
Cost Concepts, Terms & Classifications
- Diff cost s 4 diff purposes
- Cost classifications
- Cost by function
- Product vs. period costs
- FC, VC & Mixed costs
- Costs for planning, control & decision making
Day 2: Cost Behavior Patterns
- Analysis of cost behavior
- Fixed Costs-committed vs. discretionary
- Variable costs
- Semi-variable costs
- The Contribution Margin approach
- Comparing Gross Profit to The Contribution Margin
Cost-Volume-Profit & Break Even
- Cost-Volume-Profit & Break-Even defined
- Cost-Volume-Profit analysis
- Target income calculations
- The margin of safety calculations
- Sales mix analysis
- Break-Even analysis
Day 3: Standard Costs
- Responsibility accounting defined
- Responsibility centers
- Standard costs & Variance Analysis
- Fixed overhead variances
- VA for factory overhead
- Absorption vs. direct costing
Relevant Costs
- Relevant costs defined
- Decision-making approaches
- Make vs. buy decisions
- Sell vs. process decision
- Lease vs. buy decision
- Adding or dropping a line decision
Day 4: Capital Budgeting
- Capital Budgeting decisions defined
- Capital Budgeting techniques demonstrated
- Mutually exclusive projects
- Capital rationing & decision making
- Investment decisions
- Decision-making tools
Performance Evaluation
- Division evaluation
- Return On Investment (ROI)
- Profit planning
- Residual income (RI)
- Controlling results using ROI
- Controlling results using RI
Day 5: Financial Statement Analysis
- Ratio overview
- Liquidity ratios
- Activity ratios
- Leverage ratios
- Profitability ratios
- Market ratios
Statement of Cash Flows
- P&L to Cash flow analysis
- Accrual basis of accounting
- Operations section explored
- Investing section explored
- Financing section explored
- Cash Flow statement to Balance Sheet connection
