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Akuntansi Biaya Management, the Controller, and Cost Accounting. Cost Concept and The Cost Accounting Information System. Suryadharma Sim, SE, M. Ak

01 Ekonomi dan

Bisnis

S1 Manajemen

Management, the Controller, and Cost Accounting

Management

Management is composed of three groups: (1) operating

management, consisting of supervisors; (2) middle management,

represented by department heads, division managers, and

branch managers; and (3) executive management, consisting of

the president, executive vice-presidents, and executives in

charge of marketing, purchasing, engineering, manufacturing,

finance, and accounting.

Management, the Controller, and Cost Accounting

1. Planning, the construction of a detailed operating program is the process of sensing

external opportunities and threats, determining desirable objectives, and employing

resources to accomplish these objectives.

2. Organizing is the establishment of the framework within which activities are to be

performed.

3. Control is management’s systematic effort to achieve objectives.

4. Authority, Responsibility, and Accountability

• Authority is the power to direct others to perform or not perform activities.

Authority is the key to the managerial job and the basis for responsibility.

• Responsibility, or obligation, is closely related to authority. It originates

principally in the superior-subordinate relationship in that the superior has the

authority to require specific work from others. If subordinates accept the

obligation to perform, they create their own responsibility. The superior still is

ultimately responsible for subordinate’s performance.

• Accountability is reporting results to higher authority.

Management, the Controller, and Cost Accounting

The Organization Chart

An organization chart shows an entity’s principal management

positions, helps to define authority, responsibility, and accountability,

and is essential in developing a cost accounting system capable of

reporting the responsibilities of individuals. The coordinated

development of a company’s organization with the cost and budgetary

system leads to an approach to accounting and reporting called

responsibility accounting. Most organization charts are based on the

line-staff concept.

Management, the Controller, and Cost Accounting

The Controller’s Participation in Planning and Control

The controller is the executive manager responsible for the accounting function. The

controller coordinates management’s participation in planning and controlling the

attainment of objectives, in determining the effectiveness of policies, and in creating

organizational structures and processes. The controller also is responsible for observing

methods of planning and control throughout the enterprise and for proposing improvement

in them. Using the accounting system and other systems, the controller provides

information for planning a company’s future and for controlling its activities. This

information goes far beyond the basic financial statements. Investors, government

agencies, and other external parties also receive information by which management’s

effectiveness may be judged. This information is usually communicated to external users

by means of quarterly and annual reports that include financial statements but lack the

depth of explanatory detail available to internal decision makers.

Management, the Controller, and Cost Accounting

The comparison of financial accounting, management accounting

and cost accounting

• Financial accounting focuses on reporting to external parties such as investors,

government agencies, banks, and suppliers. It measures and records business

transactions and provides financial statement that are based on generally accepted

accounting principles (GAAP). The most important way that financial accounting

information affects managers’ decisions and actions is through compensation,

which is often, in part, based on numbers in financial statements.

• Management accounting measures analyzes, and reports financial and

nonfinancial information that helps managers make decisions to fulfill the goals of

an organization. Managers use management accounting information to develop,

communicate, and implement strategy. They also use management accounting

information to coordinate product design, production, and marketing decisions and

to evaluate performance.

Management, the Controller, and Cost Accounting

• Cost Accounting provides information for management accounting and

financial accounting. Cost accounting measures, analyzes, and reports

financial and nonfinancial information relating to the costs of acquiring or

using resources in an organization. For example, calculating the cost of a

product is a cost accounting function that answers the financial

accounting’s inventory-valuation needs and management accountings’

decision-making needs (such as deciding how to price products and

choosing which products to promote).

Management, the Controller, and Cost Accounting

The Professional Ethics

Accountants have special obligations regarding ethics, given that they are responsible

for the integrity of the financial information provided to internal and external parties.

The Sarbanes-Oxley legislation in the United States, passed in 2002 in response to a

series of corporate scandals, focuses on improving internal control, corporate

governance, monitoring of managers, and disclosure practices of public corporations.

Institute of Management Accountants (IMA) Statement of ethical professional practice:

Principles

Standards

Competence

Confidentiality

Integrity

Credibility

Management, the Controller, and Cost Accounting

Summary

Management can be viewed as encompassing the processes of

planning, organizing, and control. The management team includes the

controller, who coordinates planning and control for the firm. The cost

department coordinates with other departments and plays a central

role in budgeting, cost control, pricing, reporting, and choosing among

alternatives.

Both professional certification and a code of ethics now exist for

management accountants. These and other external constraints exert

significant influence on cost accounting.

Cost Concept and The Cost Accounting Information System

The Cost Concept

Cost concepts have developed according to the needs of accountants,

economists, and engineers. Accountants have defined cost as “an exchange

price, a forgoing, a sacrifice made to secure benefit. In financial accounting, the

forgoing or sacrifice at date of acquisition is represented by a current or future

diminution in cash or other assets.”

Frequently the term cost is used synonymously with expense. However, an

expense may be defined as a measured outflow of goods or services, which is

matched with revenue to determine income, or as:

… the decrease in net assets as a result of the use of economic services in the

creation of revenues or of the imposition of taxes by governmental units. Expense

is measured by the amount of the decrease in assets or the increase in liabilities

related.

Cost Concept and The Cost Accounting Information System

The Cost Accounting Information System

Systematic, comparative cost information and analytical cost and profit data

are needed so that managers can set profit goals, establish departmental

targets for middle and operating management, evaluate the effectiveness of

plans, pinpoint specific successes or failures, identify and select strategies,

and decide on adjustments and improvements in the organization. An

integrated and coordinated information system provides the information

needed by managers and communicates it promptly in a form understandable

to the user. Opportunities can be missed because of poor communication. The

cost accounting information system must reflect the division of authority so that

individual managers can be held accountable.

Cost Concept and The Cost Accounting Information System

Classification of Cost Cost classifications are essential for meaningful summarization of cost data. The most

commonly used classifications are based on the relationship of costs to the following:

a. The product

1. Manufacturing Costs

- Direct materials

- Direct labor

- Factory overhead

- Indirect materials

- Indirect labor

2. Commercial Expenses

- Marketing expenses

- Administrative expenses

b. The volume of production

1. Variable Costs

2. Fixed Costs

3. Semi variable Costs

Cost Concept and The Cost Accounting Information System

c. The manufacturing departments, processes, cost centers, or other subdivisions

1. Producing and Service Departments

2. Common Costs and Joint Costs

d. The accounting period

1. Capital expenditures

2. Revenue expenditures

e. A decision, action, or evaluation

1. Differential cost

2. Opportunity cost

3. Sunk cost

Cost Concept and The Cost Accounting Information System

Summary

The concepts of cost object and cost traceability are fundamental to the study

of cost accounting. The different degrees of traceability and the wide variety of

important cost objects create a large number of categories into which costs are

classified.

The chart of account is the skeleton of the cost accounting information system.

The system’s output includes much of the information managers use in

planning and control. Outside the basic accounting system, but still important in

managing, are the nonfinancial performance measures now receiving

increased attention.

Terima Kasih Suryadharma Sim, SE, M. Ak