| After completing this chapter, you should be able to: | | 1 | Define managerial accounting and describe its role in the management process. | | 2 | Explain four fundamental management processes that help organizations attain their goals. | | 3 | List and describe five objectives of managerial accounting activity. | | 4 | Explain the major differences between managerial and financial accounting. | | 5 | Explain where managerial accountants are located in an organization, in terms of formal organization, deployment in cross-functional teams, and physical location. | | 6 | Describe the roles of an organization’s chief financial officer (CFO) or controller, treasurer, and internal auditor. | | 7 | Briefly describe some of the major contemporary themes in managerial accounting. | | 8 | Understand and explain the concepts of strategic cost management and the value chain. | | 9 | Understand the ethical responsibilities of a managerial accountant. | | 10 | Discuss the professional organizations, certification process, and ethical standards in the field of managerial accounting. |
Learning Objectives highlight the key topics to be covered in the chapter. They are repeated in the margin of the text where they are discussed. Also, each end-of-chapter assignment lists its learning objectives in the margin. |
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THIS CHAPTER’S FOCUS COMPANY
is The Walt Disney Company. This entertainment services company is a giant in the industry with theme parks, feature film studios, animation studios, television broadcasting, hotels and resorts, and retail stores. Using The Walt Disney Company as an illustration, we will introduce the field of managerial accounting. We will explore how managerial accountants work in partnership with managers to add value to the organization. The major themes of managerial accounting also are introduced, and we will return to them throughout the book. Each chapter is built around a focus company, in which the chapter’s key points are illustrated. This chapter’s focus is on The Walt Disney Company. The focus companies in subsequent chapters are not real companies, but they are realistic scenarios built on actual company practices. Whenever the focus company is discussed in the chapter, the company logo appears in the margin. Walt Disney Company |  <![CDATA[<a onClick="window.open('/olcweb/cgi/pluginpop.cgi?it=jpg::::/sites/dl/free/0073022853/hiL22853_0101.jpg','popWin', 'width=NaN,height=NaN,resizable,scrollbars');" href="#"><img valign="absmiddle" height="16" width="16" border="0" src="/olcweb/styles/shared/linkicons/image.gif"> (K)</a>]]>
© TED ALJIBE/AFP/Getty Images.
|  <![CDATA[<a onClick="window.open('/olcweb/cgi/pluginpop.cgi?it=jpg::::/sites/dl/free/0073022853/hiL22853_0102.jpg','popWin', 'width=NaN,height=NaN,resizable,scrollbars');" href="#"><img valign="absmiddle" height="16" width="16" border="0" src="/olcweb/styles/shared/linkicons/image.gif"> (K)</a>]]>
© The McGraw-Hill Companies, Inc./Andrew Resek, photographer/DIL.
| IN CONTRAST
to the entertainment services setting of The Walt Disney Company, we will turn our attention to Gap, Inc. This major clothing retailer has over 3,000 stores around the world, which sell Gap, Banana Republic, Old Navy, and Forth & Towne apparel. We will explore Gap’s value chain, which is the set of linked, value-creating activities, ranging from securing basic raw materials and energy to the ultimate delivery of products and services. As a retailer, Gap focuses on apparel design, marketing, and sales. All manufacturing of its clothing lines is contracted out to garment manufacturers throughout the world.
Each chapter also includes a contrast company. In most cases, the contrast company will present a key chapter topic in an industry that is different from that of the focus company. In this chapter, the focus company (Walt Disney) is an entertainment services company, whereas the contrast company (The Gap) is a fashion retailer. |
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Many different kinds of organizations affect our daily lives. Manufacturers, retailers, service industry firms, agribusiness companies, nonprofit organizations, and government agencies provide us with a vast array of goods and services. All of these organizations have two things in common. First, every organization has a set of goals or objectives. An airline, such as British Airways or Southwest Airlines, might specify profitability and customer service as its goals. The New York Police Department’s goals would include public safety and security coupled with cost minimization. Second, in pursuing an organization’s goals, managers need information. The information needs of management range across financial, production, marketing, legal, and environmental issues. Generally, the larger the organization is, the greater is management’s need for information.  <![CDATA[<a onClick="window.open('/olcweb/cgi/pluginpop.cgi?it=gif::::/sites/dl/free/0073022853/lo1.gif','popWin', 'width=NaN,height=NaN,resizable,scrollbars');" href="#"><img valign="absmiddle" height="16" width="16" border="0" src="/olcweb/styles/shared/linkicons/image.gif"> (K)</a>]]>
Define managerial accounting and describe its role in the management process. |
Managerial accountingThe process of identifying, measuring, analyzing, interpreting, and communicating information in pursuit of an organization’s goals. is the process of identifying, measuring, analyzing, interpreting, and communicating information in pursuit of an organization’s goals. Managerial accounting is an integral part of the management process, and managerial accountants are important strategic partners in an organization’s management team. In this chapter, we will explore the role of managerial accounting within the overall management process. In the remaining chapters, we will expand our study by exploring the many concepts and tools used in managerial accounting.
Exercise 1-27 Case 1-33 |
