Accountancy Study Material Overview

Study Notes

Study Material aims to equip students with essential knowledge and skills in accounting.
Strict permissions required for reproduction or distribution of the material.
Published by the Elite School of Professional Accountants, revised edition August 2024.

Module 1 encompasses various chapters focused on strategic cost management, analytics, and quality management among others.
Key chapters include:
- Strategic Cost Management with Business Analytics
- Value Chain Analysis
- Total Quality Management (TQM)
- Theory of Constraints
- Kaizen Costing and Target Costing

Often overlooks long-term customer satisfaction and product quality.
Employs rigid cost-cutting strategies, failing to adapt to market changes.
Lacks emphasis on innovation, potentially missing operational efficiency opportunities.

Strategic cost management aligns costs with business strategy enhancing decision-making.
Traditional methods rely on past performance and focus purely on cost reduction.
Strategic approaches focus on value creation, integrating costs with overall business strategy.
Predictive analytics plays a crucial role in strategic decision-making compared to historical data used in traditional settings.

Four key components:
- Prevention Costs: Expenses for training and preventive measures.
- Appraisal Costs: Costs for product evaluation, such as inspections.
- Internal Failure Costs: Expenses for defects found before reaching customers (e.g., scrap).
- External Failure Costs: Costs from defects discovered post-delivery, including warranty claims.
Total Cost of Quality = Prevention + Appraisal + Internal Failure + External Failure.

Originates from Japanese philosophy indicating 'continuous improvement.'
Focuses on incremental changes for ongoing process enhancement.
Case Study: Toyota Motors utilizes Kaizen costing to enhance efficiency and maintain quality.
- Integrates customer feedback into product designs.
- Refines production processes to meet high-quality benchmarks.
- Optimizes assembly lines to reduce waste.

Perfect Competition: Many sellers, identical products; prices determined by supply and demand; sellers are price takers.
Monopoly: Single company dominates with the ability to set prices; example includes Apple's strategy to leverage its brand ecosystem.
Monopolistic Competition: Multiple sellers with differentiated products; pricing influenced by features and brand reputation, as seen with paint brands like Asian Paints and Nerolac.