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179 Cards in this Set
- Front
- Back
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Management Accounting
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contains all the functions necessary for effective cost and revenue controlling.
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Management Accounting covers
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all aspects of management controlling and includes many tools for compiling information for company management
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Financial Accounting
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Financial reports used for external reporting purposes such as balance sheet and profit and loss statement. Similar to the various legal requirements set by the relevant financial authorities , these external reporting requirements are usually prescribed through general accounting standards, such as Generally accepted accounting principles (GAAP) or IAS) international accounting standard
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Overhead Cost Controlling
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CO-OM
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overhead
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costs not directly related to producing goods or services. track through overhead cost controlling CO-OM
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Product Cost Accounting
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analyzing value added processes
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Profitability Analysis
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CO-PA
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Postings to an expense account in FI can cause cost postings in
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CO-OM
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FI can post revenues directly to
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CO-PA
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Cost Flows also occur between FI and
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CO-PC , which is where raw material costs incurred in the production process are entered.
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CO-PA
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Profitability Analysis
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CO-OM
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Overhead cost controlling
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There is flow back into __________________ if production costs have been activated as a Finished product or WIP ( work in progress)
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Financial Accounting
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Profit Center Accounting
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How efficient are my enterprise areas ( profit centers)
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Overhead cost controlling
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How can we reduce our overhead costs?
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Product Cost Accounting
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How high are the costs!!
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Profitability Analysis
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How profitabile are individual market segments
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Main components of Mangerial Accounting used for tasks and types of analysis
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Analyze sucess of individual profit centers
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Cost Element Accounting
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classifies the costs and revenues posted to mangement accounting. It also enable you to reconcile costs between Managemnet accounting and Financial accoutning
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Overhead cost controlling
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examines the origin of costs in functional areas
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Product cost accounting
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is used for costing and evaluating the costs of goods manufactured for a product and the costs associated with providing a service or when carrying out a project ( plan and actual). This component provides tools for a comprehensive analysis of the value adding processes in an enterprise
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Activity based costing (ABC)
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provides you with more ways of allocating costs
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Which component provides tools for a comprehensive analysis of the value adding processes in an enterprise
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Product cost accounting
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Profitability analysis
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analyzing the effects of enterprise activities on the external market. It enables you to determine how successful the enterprise is in different market segments ( product divisions for example) and how profitability has evolved over a period of time.
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Profit center accoutning
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analyzes the success of the profit centers in the enterprise. it can be used to represent the internal market in the enterprise, particularly if multiple valuation approached and transfer prices are used
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Management Accounting Organizational Units
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Operating Concern COPA
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Controlling Area
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Managing Costs within
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Currencies
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Controlling Area
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Cost Element Acccounting
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Primary cost elements (linked to FI expense accounts)- One sided posting ( Debit) from the G/L account
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Cost Element Accounting
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classifies costs and revenues
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Overhead Cost Controlling
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Orgin of Costs
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Overhead Cost Controlling
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Cost Centers
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Internal Allocation of costs
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Tracing Factor
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Tracing Factor
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Statistical Key Figure
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Statistical Key Figure
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Fixed
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Statistical Key Figure Type 1: Fixed
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Same carried over from the period in which it is posted to all subsequent periods of the same fiscal year. Number of employees, Sq footage
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Statistical Key Figure Type 2: Total
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Needs to be entered for each individual period. For values that tend to change each period like kilowatt hours of electricity consuption
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Product Cost Accounting
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Analyzing value adding processes
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Posting Logic
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Credit to Sender
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Types
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Allocation
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Direct Activity Allocation
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Rate ( manual or automatic)
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Product Cost Accounting
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Product Cost Planning
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Product Cost Planning
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Quantity Structure
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If a non-stock item is purchased an expense is posted to the GL. This expense is also posted as costs to a ______
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cost center;
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_________ is the primary source of data for management accounting
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FI
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Cost Object
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Holds costs
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What are the organizational units specific to controlling?
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- Operating concern: Represents the structure of external market segments for the enterprise. You can assign several controlling areas to each operating concern so you can analyze them together.
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What currencies can be defined in controlling?
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-Controlling area currency
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Define primary and secondary cost elements.
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Primary – Link FI to CO; expense accounts; Expense accounts to which costs are posted for cost accounting purposes must also be created ads cost elements n managerial accounting. This ensures that all postings to this type of account always arrive in CO at the same time.
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What is the connection between FI and CO
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Expense accounts and Revenue accounts (Inventory Changes)
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What types of FI transactions cause postings to CO?
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Postings to a expense account in FI causes cost postings in CO-OM ( overhead cost controlling)
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Describe how costs are posted from FI to CO.
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When a primary cost is initially posted into CO it is treated as a one sided journal entry
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What is a statistical posting?
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True posting goes somewhere else there is a statistical posting. Can you transfer a statistical posting no just for reporting purposes cannot go any where else.
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What does CO-PA analyze?
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External profitability
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What does EC-PCA analyze?
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Internal profitable, contributions of different to your profitability
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What is a profit center?
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Internal division of company treated like a company with in the company produces own P And L and B Sheet. Internal 14. What is the standard hierarchy?. If different product lines could be different profit centers
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What is a cost center
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The Cost center is a delimited location where costs occur. Org unit in the controlling area that represents where costs occur
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What is the standard hierarchy?
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It represents all cost centers per controlling area. Controlling area must have 1 standard hierarchy and cannot have more than 1. Cost centers are on the bottom of the hierarchy .
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What is the relationship between the standard hierarchy and controlling area?
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Every controlling area has one standard hierarchy.
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Standard Hierarchy represents
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all cost centers per controlling area
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G/L and Cost Elements
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The chart of accounts is created in FI. All expense accounts are grouped in one class( Class 4) and all revenue accounts ( class 8)
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Secondary Cost elements
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are defined only for CO and are used for internal CO allocations ( such as assessments or settlements). Secondary cost elements do not have any corresponding G/L accounts in FI
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Controlling Area
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must have 1 standard hierarchy but can not have more than 1
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Activity Types
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classifies the activivities that are to be performed within a company by one or serveral cost centers. (Within each cost center determine the rate)
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If a cost center provides activities for other cost centers, orders, processes and so on, then this means that its resources are being used. The costs of the these resources need to be allocated to the receivers of the activity
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Activity types serve as tracing factors for this cost allocatoin
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In internal activity allocation, the quantity of the activity such as the hours is entered into the system
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manually or automatically
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Every Activity type is assigned to a
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secondary cost element because of the allocation of costs
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Reciever
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debit
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Sender
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Credit
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Receiver can be
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anything that receives costs
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Internal activity is allocated using
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secondary cost elements
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You can restrict use of Activity types to certain cost centers by entering the allowed cost centers categories in
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the activity type master reocord
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What methods are available for cost center planning?
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Inputs- manual ,Automatically using formula planning ( create models),
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You can also pull statistical key figures from the
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Logistics Information System.
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Master Data Groups
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Other reporting than Standard Hierarchy. Master Data is @ bottom level
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\What are the steps in the integrated planning process?
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Strategic-Sales Planning – Production Planning – Cost Center planning/ Business process - Material Cost Estimate – Profit Planning - Planned requirements
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Cost Center Planning
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can be done manually or with help of automatic procedures like formula planning.
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What is the aim of cost center planning?
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to calculate planning costs to define deviations later and to prepare the allocation to cost bearers.
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In the Sales Info System
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the company can plan sales quantities at product or product group level for the following year.
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Sales quantity planning can be accomplished in
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Profitability Analysis
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SOP
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sales and operations planning
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Describe direct activity allocation.
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Activity type- an activity type a cost center provides at a certain rate- labor
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Posting costs and revenues in CO
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can result in true( Real) and statistical postings. You can settle true postings with other management accounting objects. Satistical postings are for info purposes only
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True Objects
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Can act as sending or receiving objects during cost allocation.
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Costs centers, real internal orders, real projects, networks, make to order production orders, cost objexts and profitability segments
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examples of true objects
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Statistical Objects
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cannot allocate costs to other objects
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Statistical order, statistical projects, and profit centers
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Statistical posting
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when a primary cost is initially posted in CO
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it is treated as a one-sided journal entry
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Debit to expense
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Debit to primary cost element
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FI and CO doc
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each contain own unique document number.
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Goods issue transactions posted in the material Management Component can be assigned
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to a cost center.
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Movement type
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identification key which has important control functions in Inventory Management, such as updating stock and consumption accounts
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When you enter a goods issue in the system you must
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enter a movement type to differentiate between the various categories of goods movements
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Goods Issue
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creates an FI transaction that debits a material consumption expense account and credits a material stock ( inventory ) account
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Goods issue
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debit consumption
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Activity types can be restricted to certain types of cost centers
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True – you need to specify which cost centers provide which activity types at what price.
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Direct activity allocation
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deals with the measurement ,posting and allocation of an organziational activity.
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For Direct activity allocation you need to create
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the corresponding ( measurable ) tracing factors in the SAP system. Known as activity types in Cost Center Accounting
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To directly allocate activity
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create an activity type
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planning activity output
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which cost centers are to provide which activity types
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During activity allocation
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Sender cost center is credit
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During activity allocation
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debiting and crediting are executed using secondary cost elements. Debiting and Crediting are the activity provided, multiplied by the activity price
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The cost element used for direct allocation of internal activity is derived directly from
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master data for the activity type .
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Direct activity allocation is recorded by
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line items on the sender and reciever sides.
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Periodic allocation techniques
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Periodic Re posting
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Assesment
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is designed for the allocation of primary and secondary costs from a sender cost center to a receiver controlling objects.
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Only ______ may serve as senders in an assessment allocation
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cost center or busienss process
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If you want to be able to accumulate costs for new responsibility area
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you will create a new cost center
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Periodic allocations use which type of cost element
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Allocations happen within 2nd elements
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What is used to determine how costs are allocated?
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Tracing Factors – such as statistical factor or activity type
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Describe the two types of statistical key figures.
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Statistical Key figures define some measurable quainty value application to cost centers, profit centers, internal orders, or processes.
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Internal orders
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can settle costs to cost centers, to process in Activity- Based Costing
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Types of internal orders
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Overhead
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Over head orders
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Particular purpose, such as a trade show or tracking costs for maintenance and repair work
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Investment orders
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cost incurred in the production of a fixed asset, such as building storage facility
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Accrual orders
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Used to offset postings of accrued costs (costs calculated in CO) to cost centers
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Orders with revenue
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used to replace the cost accounting parts of SD customer orders if SD is not being used so that both costs and revenues are being tracked; or to monitor revenues no affecting the organizations business core such as miscellaneous revenues.
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Profit Center Accounting
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internal profitability
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Costs are normally planned for orders
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that have a long life cycle. Orders with a short life cycle such as unexpeced repairs are not planned
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Internal orders
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only thing in CO that can post directly to FI account
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Internal Order
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is a temporary bucket used to track costs
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All orders are for
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temp purposes and have to be settled elsewhere
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Can you post to an internal order from FI? Explain the process.
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Post to an expense account and supply cost object which is the order number-
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Can you post to a general ledger account from an internal order? Give an example.
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Yes- one of the only things that can investment orders for building to asset account
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What happens to costs accrued on an order
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Orders are temporary buckets, when you are done with an order all orders must be settled. Determines how settled by settlement rule.
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Commitments
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identifies costs which will incurred in the future for materials and services requested or order. By recording commitiments as well as actual costs you can campare the funds you have allocated to your planned or budgeted costs to determine funds availitbility
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Commitments
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PO or Preq. to pay in the future
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You must activate commitment management in
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Management Accounting for each controlling area.
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A settlement rule
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MUST be defined for each order
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Internal order have to
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manually create settlement rule
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Profit Center Accounting
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EC-PCA
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Product Cost Accounting
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CO-PC
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Profit Center planning is
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an integral part of overall business planning. it is part of short term planning and covers 1 yr
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What are the steps in the product costing? What is the purpose of each?
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Product cost planning – standard cost estimate. Determine what a product will cost-
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Profitability Analysis (CO-PA)
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used to analyze the profitiabilty segments in your external market. These segments can be defined by product, customer, geographical area or other charateristics and by your internal orgnaizational units for example cocd or business area
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COPA - contribution of individual market segment
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Who are my largest customers and who has the strongest growth?
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COPA- contribution margin target of individual sales unit
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Has your sales unit reached it contribution margin target
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COPA - success of marketing activities
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How successful what the last marketing campaign
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COPA- revenue and cost structure
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What effect does a price determination strategy have on a customer group
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Profitability segment is made up of
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Characteristic values - non-numeric like Region
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Product cost accounting CO-PC consists of the components
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Product Cost Planning
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Product Cost Planning
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used to estimate the costs to produce goods or services
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Cost Object Controlling
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collects costs incurred during production of a product or service using cost objects such as production orders
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Cost object controlling
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the costs incurred during production are collected on cost objects such as prodution orders
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Types of cost objects
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sales orders, production orders, process orders, and production cost collectors
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Product Cost Planning Valueation
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inventory valued at standard price
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Product Cost plannning- Cost object controlling
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production process plan cost production order
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EC-PCA =
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Profit Center Accounting
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CO
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Management Accounting
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FI =
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Financial Accounting
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CO-PA
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Profitability Analysis
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CO-OM
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Overhead Cost Controlling
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HCM
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Human Capital Management
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CO-PC
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Product Cost Accounting
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What are the steps in the product costing?
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Product Cost Planning, Cost Object Controlling , Actual Costing/Material ledger
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What objects are used in CO-PC to determine a standard cost estimate?
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? Quantity Structure and Value Structure pg 879
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Marking and Releasing a standard cost estimate updates the standard price for the material master record. This results in
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inventory being re-evaluated
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Price update
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Analysis of costing results- Mark Standard cost estimate ( MM price put at future value) and Release standard cost estimate (MM price at current value) in material master and inventory is revalued .
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Prerequisities that must be met before a standard cost estimate
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- Stand cost estimate must be free of errors( status KA, costed without errors)
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When you release the standard cost estimate , future prices are updated as the
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current standard price
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You can release a stand cost only
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once per period.
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Price Control
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Indicator that controls which price is used to valuate teh inventory of material
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Standard Price
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-Inventory Valuation
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33. What happens to inventory when the standard price is updated?
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Inventory is revaluation effecting FI documents
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34. Which are of management accounting is concerned with analyzing value adding processes?
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Product cost accounting
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Statistical orders
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Can NOT settle to other cost objects
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Commitment management
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is a part of controlling
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2 organizational units defined in controlling
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Operating Concern
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What is the difference between marking a standard cost estimate and releasing a standard cost estimate
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Marking enables the results of the standard cost estimate to be updated asc the Future Standard Price in the Material Master
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Main Components of Management Accounting : (COPPP)
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- Cost Element Accounting : Enables you to reconcile costs between CO and FI
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Periodic reporting and distributions
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used the original cost elements
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while assessments
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secondary cost elements
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What are the four typical uses for internal orders?
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Overhead Orders used to monitor costs incurred for particular purpose such as conducting trade fairs or tracking maintenance or repair work
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Goal of Profit Center Accounting
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To measure the profitability of areas of responsibility within the organizations.
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What modules are the sources of expense and revenue postings in CO
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FI, SD, MM, HCM,
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Goals of profitability Analysis
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determine the profitability of market segments
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Cost Center accounting
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anwers the question of where costs occur
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Activity Based Costing
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answers the question of why ( for what purpose) cost occur
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What are the requirements for assigning multiple company codes to a controlling area ?
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The CoCd must have the same operating chart of accounts and the same fiscal year variant .
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