Podcast
Questions and Answers
What is the primary purpose of strategic cost management?
What is the primary purpose of strategic cost management?
- To maximize short-term profits
- To provide financial information to external stakeholders
- To develop a sustainable competitive position (correct)
- To reduce costs in the organization
Which of the following is NOT a key element of management accounting?
Which of the following is NOT a key element of management accounting?
- Communication of information to management
- Measurement of economic data
- Preparation of tax returns (correct)
- Identification of financial information
What is the primary focus of cost management information?
What is the primary focus of cost management information?
- Facilitating strategic management decisions (correct)
- Maximizing short-term profitability
- Complying with external reporting requirements
- Minimizing costs throughout the organization
Which of the following is NOT a key characteristic of strategic management?
Which of the following is NOT a key characteristic of strategic management?
Which of the following is the primary role of management accounting?
Which of the following is the primary role of management accounting?
Which of the following is NOT a key component of cost management information?
Which of the following is NOT a key component of cost management information?
What is the primary focus of this module?
What is the primary focus of this module?
Which of the following is NOT one of the objectives listed for this module?
Which of the following is NOT one of the objectives listed for this module?
According to the overview, what is a critical factor in effective business management?
According to the overview, what is a critical factor in effective business management?
Which of the following statements is TRUE according to the text?
Which of the following statements is TRUE according to the text?
What is the role of the cost management accountant, as implied in the text?
What is the role of the cost management accountant, as implied in the text?
Which of the following topics is NOT covered in this module?
Which of the following topics is NOT covered in this module?
What is the focus of strategic cost management?
What is the focus of strategic cost management?
Which of the following is NOT a financial performance measure used to assess a firm's strategic success?
Which of the following is NOT a financial performance measure used to assess a firm's strategic success?
Which of the following is a non-financial measure of a firm's operational success?
Which of the following is a non-financial measure of a firm's operational success?
What is the purpose of the balanced scorecard technique?
What is the purpose of the balanced scorecard technique?
How does the new business environment impact firms?
How does the new business environment impact firms?
What is the focus on in the new business environment?
What is the focus on in the new business environment?
Study Notes
Introduction to Strategic Cost Management
- Cost management information is a critical factor in the effective management of a firm in today's business environment.
- Business managers must think and act competitively, and this requires strategy.
- The role of cost management accountants is to support successful business endeavors.
Objectives of Strategic Cost Management
- Describe the nature and development of cost management information.
- Identify various users of cost management information.
- Explain how cost management information is used in management functions.
- Describe the professional environment of cost management.
- Discuss recent changes in the contemporary business environment.
- Understand and describe contemporary cost management techniques.
Overview of Cost Management and Strategy
- Strategy involves a set of policies, procedures, and approaches to achieve long-term success.
- Strategic management involves developing a sustainable competitive position.
- Strategic cost management involves developing cost management information to facilitate strategic management.
Cost Management Information
- Cost management information includes both financial and non-financial information.
- Financial information includes data on costs and revenues.
- Non-financial information includes data on productivity, quality, and other key success factors.
Management Accounting
- Management accounting involves applying techniques and concepts to economic data to assist management in planning and decision-making.
- It includes identifying, measuring, accumulating, analyzing, preparing, interpreting, and communicating financial information.
Changes in the Business Environment
- The new business environment requires firms to be flexible and adaptable.
- There is a focus on social and ethical responsibility.
- Firms need to place greater responsibility in the hands of a more highly skilled workforce.
Developing a Competitive Strategy
- Strategic cost management focuses on supporting strategic goals.
- The strategic cost management system develops strategic information, including financial and non-financial information.
- Financial performance measures include growth in sales and earnings, cash flows, and stock price.
- Non-financial measures of operation include market share, product quality, customer satisfaction, and growth opportunities.
- These measures are incorporated in the balanced scorecard technique.
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Description
Test your knowledge on strategic cost management with this quiz. Topics covered include introduction to strategic cost, cost reference, and cost accounting.
