Class 01 -- Introduction to Managerial Accounting Course

7/21/2019 Class 01 -- Introduction to Managerial Accounting Course

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Managerial

ACCOUNTING:Information for Business Decisions

Derrald Stice



Today’s Agenda• The Need for Financial Accounting: Hayley’s

Mooncake Co!any

• The Case of "al#Mart’s $ales: %etailedManagerial Accounting Inforation

•

A Co!arison of Financial and ManagerialAccounting

• $i!le &reake'en Analysis: A Ukrainianrestaurant

• Ho( %oes this Class "ork)

– $!eci*cally+ do I ha'e to coe to class)• The My,ducator -earning Tool

• What do I have to do before our next classmeeting?



The Need for Accounting

Hayley’s Mooncake

Co!any• Hayley has a drea . she (antsto start and o!erate her o(nooncake /usiness0

• Ho( uch oney does she needto ake this ha!!en)

– $100 million

• $o+ fro (here can sheget the 1233 illion)



Hayley’s Mooncake Co!any

1233 Million Fro "here)

• 4ersonal sa'ings

• Faily and friends

5555555555555555555555555555555555555

• -oan fro a /ank

•4ri'ate in'estors

•Go !u/lic66




Going 4u/lic66

Ho( can Hayley

con'ince strangersto in'est

1233 illion

in her ooncakeco!any)




Going 4u/lic66

•"ithout 7,-IA&-,

FINANCIA-$TAT,M,NT$+

she can’t0




Financial $tateents

• "hat do these strangers (ant tokno( a/out Hayley’s *nances)

• Note: t this !oint" it #ould be a%le%&s 'nancial ()N * remember" sheis +ust tr%ing to start her moonca,e com!an%-

• -ist of resources ando/ligations

• Ho( uch oney doesthe /usiness ake)



Financial

Accounting• &alance $heet –-ist of resources ando/ligations

• Incoe $tateent –Ho( uch oney doesthe /usiness ake)



Manageent 8 Financial Accounting

The Case of Wal-Mart

• Wal-Mart’s net sales for the scal year ended January 31, 2015 were $485!2 "#ll#on h#s #s a*nancial accounting nu/er he nu%"er #sthe su% of all sales #n all stores #n allde&art%ents for all of the days #n the scal yearended January 31, 2014

•

'ow, #%a(#ne that you are the ch#ef e)ecut#*eo+cer ./ of Wal-Mart #st 23 additionalthings a"out th#s $485 "#ll#on nu%"er that youwould l#e to now



Internal %ecision Making

"al#Mart’s $ales

%a(#ne that you run Wal-Mart#st 23 additional things a"out

th#s $485 "#ll#on sales nu%"erthat you would l#e to now20900;0<0

=0>0?0@0230



Internal %ecision Making

"al#Mart’s $ales

• .)a%&les – &y store+ /y country+ /y region

– &y de!artent clothing+ en’s clothing+ etc0B

– &y s!eci*c ite

– &y !hysical location in the store

– &y season cliate

– &y day of the (eek

– &y tie of day

– &y national local ad ca!aign – &y !ayent ethod

– &y deogra!hics of /uyer



The T(o 4riary Areas of Accounting

Financial 8 Managerial

• Mana(er#al ccount#n( #s the (ather#n(and analys#s of #nfor%at#on for the &ur&oseof internal decision aking – %,TAI-,% data

– Intended for !eo!le IN$I%, the /usiness (ho are aking %AI-D decisions0

• 6#nanc#al ccount#n( #s the (ather#n(,re&ort#n(, and analys#s of #nfor%at#on&r#%ar#ly for the "enet of eEternal users such as #n*estors and cred#tors – $UMMA7D data

– Intended for !eo!le OUT$I%, the /usiness (ho are aking OCCA$IONA-decisions0



Financial Accounting

Ho( Are Financial Accounting%ata Used)

• Credit analysis

• &ank loan contracts

•

7egulatory o'ersight• aluation of in'estentsassets



Managerial Accounting

Ho( Are Managerial Accounting%ata Used)

• 4roduct costs

• &reake'en analysis

•

&udgeting• 4erforance e'aluation

• Outsource !roduction)

• Add a !roduct line)• &uy a ne( /uilding)



Decision Making

Using Management Accounting Data



%&ortant 7uest#on

• "hat is your -,A$Tfa'orite !lace to eat on

ca!us)))• "hich !lace akes the-,A$T aount of oneyand should /e closed)))



Costs and Internal %ecision Making

Ukrainian 7estaurant)

Dou (ant to o!en arestaurant ser'ing

Ukrainian food at -G> – !lo'

– !eleni

–

/lack Ukrainian /readCan a Ukrainian restaurantake oney)




Ukrainian 7estaurant)Monthly rent includes eui!ent 8 furnitureB 12<+333

Monthly anager’s salary 193+333

Monthly insurance+ utilities+ etc0 1;+333

$er'er and cook costs 1? !er ealFood aterial costs 123 !er eal

$elling !rice 13 !er eal

• Dou !lan to /e o!en 9< days each onth0

• A arket sur'ey indicates that 23+333 !eo!le in yourarea are interested in eating Ukrainian food an a'erageof once e'ery siE onths0




Ukrainian 7estaurant)&efore doing soe calculations (ith thesenu/ers+ consider the follo(ing uestion0

Ho( often do entre!reneurs gather datalike these &,FO7, starting their /usiness)

Ans(er: Not oftenenough0




Ukrainian 7estaurant)20The !rice of each eal is 130 After !aying for

the sta cost and cost of the food+ ho( uch ofthis 13 (ill you get to kee!)

90"hat are the total costs you ha'e to !ay each

onth+ (hether you ha'e any custoers or not)0Ho( any custoers ust you ha'e each onth

to !ay for your J*Eed costs)K

;0According to your arket sur'ey+ (hat is your

MALIMUM nu/er of custoers !er onth)<0 $hould you o!en the restaurant)




Ukrainian 7estaurant)20The !rice of each eal is 130 After !aying

for the sta cost and cost of the food+ ho(uch of this 13 (ill you get to kee!)

Meal 4rice 13

$ta costs ?B

Food costs 23B

7eainder 129




Ukrainian 7estaurant)90"hat are the total costs you ha'e to !ay

each onth+ (hether you ha'e anycustoers or not)

-G> 7ent 12<+333

Manager’s salary 93+333

Insurance+ utilities+ etc0 ;+333

Total 1@+333




Ukrainian 7estaurant)0 Ho( any custoers ust you ha'e each

onth to !ay for your J*Eed costsK)

JFiEedK costs !er onth 1@+333

Contri/ution argin

!er eal 129

&reake'en custoers

!er onth +9<3




Ukrainian 7estaurant);0 According to your arket sur'ey+ (hat is

your MALIMUM nu/er of custoers !eronth)

23+333 interested eaters

E 9 'isits !er year

5 93+333 Ukrainian food eaters !er year

29 onths !er year52+==> MALIMUM eaters !er MONTH




Ukrainian 7estaurant)<0 $hould you o!en the restaurant)

&reake'en !er onth 5 +9<3custoers

Market sie !er onth 5 2+==>custoers

O!en the restaurant)




Ukrainian 7estaurant)

<0 $hould you o!en the restaurant)

Are there any things in thenu/ers that (e can change)

– 4rice of eal)

– Managers’ salary)

%o (e eE!ect arket conditions to

change o'er tie) – Gro(th in the arket as !eo!le hear

a/out our Ukrainian food)



Ho( does this class

(ork)• Attendance – ,'ery Thursday+ MAN%ATO7D

• in this roo

•

at this tie – In the $ylla/us+ class !eriods are

la/eled:• 7,UI7,%

• O4TIONA- e'ery Tuesday+ =! in -TPB

• Materials – My,ducator Q Access it online0



Ho( does this class

(ork)• uies – of the – Ra'ors: 4re#class aB+ !ost#class /B+

My,ducator O!tional %ay ui – A-- uies are taken (ithin the

My,ducator online learning tool – A-- UISS,$ A7, FO7 DOU7 47ACTIC,

ON-D•

Q No grade + /ut soe !artici!ation !oints0• ,Eas

– 9 idters and a co!rehensi'e *nal



7u#: o*era(e ;eta#ls /&t#onal ;ay .)a%&le

• ui 9 co'ers aterial fro Class 39+ an O4TIONA- class day0

• $tudy the follo(ing odules in My,ducator To!ic 9 Cost Flo(s and&usiness OrganiationsB

• 21 he 6low of <roducts and osts #n Manufactur#n( 6#r%s

• 22 ccount#n( for /*erhead

•

23 he ost of =oods Manufactured >chedule• Co!lete the follo(ing 4ractice 4ro/les in My,ducator To!ic 9

Cost Flo(s and &usiness OrganiationsB0

• .)erc#se 22 6low of Manufactur#n( osts

• .)erc#se 23 ss#(n#n( Manufactur#n( osts to Jo"s

• .)erc#se 24 naly:#n( Manufactur#n( osts

•

.)erc#se 2? &&ly#n( Manufactur#n( /*erhead• .)erc#se 31 ss#(n#n( Manufactur#n( /*erhead to Jo"s

• .)erc#se 32 otal Manufactur#n( osts and ost of =oods Manufactured

• .)erc#se 33 otal Manufactur#n( osts, ost of =oods Manufactured, andost of =oods >old



7u#: o*era(e ;eta#ls @eAu#red ;ay .)a%&le

a 47,#classui for Class3

ui a co'ers aterial that should /e co!leted in !re!aration forClass 39+ an IN#C-A$$ day0•$tudy the follo(ing odule in My,ducator To!ic 2 ManageentAccounting and Cost Conce!tsB0•20 Managerial Accounting Terinology•$tudy the follo(ing 4ractice 4ro/les and solutionsB in My,ducatorTo!ic 2 Manageent Accounting and Cost Conce!tsB0•4ractice ,Eercise ? FiEed Costs and aria/le CostsB•4ractice ,Eercise @ 4roduct and 4eriod CostsB•

4ractice ,Eercise 23 Ty!es of 4roduct CostsB•4ractice ,Eercise 29 %irect and Indirect CostsB•4ractice ,Eercise 2 %ierential Costs and $unk CostsB•4ractice ,Eercise 2; Out#of#4ocket Costs and O!!ortunity CostsB•,Eercise 9< C##4 AnalysisB•,Eercise 9> 4roduct CostingB

/ 4O$T#classui for Class39

• &ased on in#class acti'ities



Ho( does this class

(ork)• Teaching Assistant TAB hel! – Hel! 'ia eail

– One#on#one hel! . for free666

• My Oce Hours – &y a!!ointent -$ =3<2B





My,ducator Online -earning

Tool• TeEt+ 'ideo+ suary 4o(er4ointslides+ !ractice !ro/les

• 7egister ON-IN, using theinstructions in the $ylla/us666

M i l A ti




Ho( to do terri/le in

this course

FA-- &,HIN%666>tart#n( hursday, there #s a Au#: or e)a%due alost e'ery other day

Dou should !lan on 20< to 903 hours 4,7%AD0VThe House of Cards a!!roach is not

recoended0B



Today’s Agenda• The Need for Financial Accounting: Hayley’s

Mooncake Co!any

• The Case of "al#Mart’s $ales: %etailedManagerial Accounting Inforation

•

A Co!arison of Financial and ManagerialAccounting

• $i!le &reake'en Analysis: A Ukrainianrestaurant

• Ho( %oes this Class "ork)

– $!eci*cally+ do I ha'e to coe to class)• The My,ducator -earning Tool

• What do I have to do before our next classmeeting?

A i t f N t



Assignent for NeEt

Tie20 7ead the $ylla/us0

90 7egister for the My,ducator learningtool and get it to (ork0

0 %o the !re!aration for ui 9a seeui Co'erage %etailsB0

;0 TA, ui 9a in My,ducator /y 22:33!00 on Thursday0 V4ractice uiB

<0 Coe /ack neEt tie for in#class grou!acti'ities introducing the i!ortantto!ics in anagerial accounting0

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Class 01 -- Introduction to Managerial Accounting Course

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