intro to cac

• accounting information system consists of interrelated manual and computer parts and uses processes such as collecting, recording, and managing data to transform into inputs provided to users
• accounting information systems subsystem: financial accounting information system and management accounting information system
• financial accounting information system is concerned with producing outputs for external users; uses economic events as inputs
• cost management information system is concerned with producing outputs for internal users using inputs to satisfy management objectives
• cost management information system three broad objectives are costing out services, products and other objects of interest to management, planning and control and decision making
• costing out services depends on the nature of the object being costed and the reason management wants to know the cost
• planning and control: what should be done, why it should be done, how it should be done and how well it is being done
• companies increasingly utilize a proactive cost management perspective to improve resource allocation and investment decision across the company
• cost management has a broader focus and is concerned with drive factors such as cycle time, quality and process productivity
• cost management information system subsystems are cost accounting information and operational control information system
• objective of cost management information systems are the first and second objectives(costing and control) and the output is the third objective(decision-making)
• cost accounting information system is designed to assign cost to individual products and services and other objects as specified by management
• for external reporting, cost accounting system must assign cost in order to value inventory and determine cost of sales
• using financial accounting principles to define product cost may lead to under or overstatement of individual product cost
• operational control information system is designed to provide accurate and timely feedback concerning the performance of managers
• operational control information system focuses on identifying opportunities for improvement and helping ways to improve
• global competitive environment has increased the demand not only for more cost information but also for more accurate cost information
• cost information plays a vital role in reducing costs, improving productivity and assessing product-line profitability
• service industry represents a significant and growing portion of the economy
• gig economy refers to short-term contracts to provide a service, represents one of the most impactful newer service sectors
• significant growth in the service industry has made managers in the industry more conscious of the need to have accurate cost information for planning, controlling and continuous improvement and decision making
• changes in the service sector add to the demand for innovative and relevant cost management information
• enterprise resource planning software has the objective of providing an integrated system capability--a system that can run all the operations of a company and provide access to real-time data from the various functional areas of a company that span the entire value chain
• activity based costing software is classified as online analytic software and facilities improved decision making around areas such as cost estimation, product pricing, planning and budgeting
• theory of constraint and just in time allowed firms to increase quality, reduce inventories, eliminate waste and reduce cost
• theory of constraints is a method used to continuously improve manufacturing and nonmanufacturing activities
• theory of constraint is a thinking process that begins by recognizing all resources ae finite
• jit manufacturing strives to produce a product only when it is needed and only in the quantities demanded by customers
• jit is a critical part of a more comprehensive approach referred to as lean manaufacturing
• lean manufacturing is the persistent pursuit and elimination of waste that simultaneously embodies respect for people
• waste is anything that does not add value to the end user
• customer orientation: firms concentrate on the delivery of value to the customer with the objective of establishing a competitive advantage
• value chain is a set of activities required to design, develop, produce, market and deliver products and services to customers
• target costing encourages managers to assess the overall cost impact of product designs over the product's life cycle an d simultaneously provides incentives to make design changes to reduce cost
• activity based management identifies activities produced at each stage of the development process and assesses their cost
• accounting departments that are customer driven assess the value of the reports to be sure that they communicate significant information in a timely and readable fashion
• continuous improvement and elimination of waste are the foundation principles that govern a state of manufacturing excellence
• manufacturing excellence is the key to survival in today;s world-class competitive environment
• total quality management--managers strive to create an environment that will enable organizations to produce detect-free products and services
• forecasting is using analytical tools and data mining techniques to discover key and relevant trends, both historical and predictive in nature