Management accounting system: A framework that allocates decision-making authority over company resources, provides information to support managerial decisions, and generates data for evaluating and rewarding managerial performance.
Decision making authority: The allocation of responsibility over resources within the company, such as factory equipment, employees, and raw materials, to specific managers or departments.
Performance evaluations and reward: The process of using generated information to assess managerial performance and determine appropriate rewards, ensuring assets like equipment and personnel earn a good return under managerial control.
1. In the framework of principles of management accounting, which of the following is generally established first in the process of resource management?
2. What is the primary function of the management accounting role as described in the course content?
3. How do prime costs and conversion costs differ in manufacturing business accounting?
Principles of Management Accounting
Allocate decision authority, support decisions, evaluate performance.
Management accounting role
Provide relevant info for decision-making and control.
Manufacturing costs include?
Direct materials, direct labor, manufacturing overhead.
Flow of physical goods
Tracks raw materials, WIP, finished goods movement.
Product vs Period costs
Product: manufacturing; Period: operating expenses.
Manufacturing inventories
Materials, WIP, finished goods.
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