Chapter 16 - Managing costs and quality. In this chapter, the following content will be discussed: Cost management, activity-based management (ABM), business process re-engineering (BPR), life cycle costing and budgeting, target costing, managing throughput, managing quality, total quality management (TQM). | Chapter 16 Managing costs and quality 16- Copyright 2009 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Management Accounting 5e by Langfield-Smith Prepared by Kim Langfield-Smith Outline Cost management Activity-based management (ABM) Business process re-engineering (BPR) Life cycle costing and budgeting Target costing Managing throughput Managing quality Total quality management (TQM) 16- Copyright 2009 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Management Accounting 5e by Langfield-Smith Prepared by Kim Langfield-Smith Cost management Contemporary management accounting systems include a range of tools and techniques that provide information for cost management Cost management Improvement of an organisation’s cost effectiveness through understanding and managing the real causes of cost Main focus is on cost reduction, but also on improving other aspects of performance such as quality and delivery 16- Copyright 2009 McGraw-Hill Australia Pty . | Chapter 16 Managing costs and quality 16- Copyright 2009 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Management Accounting 5e by Langfield-Smith Prepared by Kim Langfield-Smith Outline Cost management Activity-based management (ABM) Business process re-engineering (BPR) Life cycle costing and budgeting Target costing Managing throughput Managing quality Total quality management (TQM) 16- Copyright 2009 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Management Accounting 5e by Langfield-Smith Prepared by Kim Langfield-Smith Cost management Contemporary management accounting systems include a range of tools and techniques that provide information for cost management Cost management Improvement of an organisation’s cost effectiveness through understanding and managing the real causes of cost Main focus is on cost reduction, but also on improving other aspects of performance such as quality and delivery 16- Copyright 2009 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Management Accounting 5e by Langfield-Smith Prepared by Kim Langfield-Smith Conventional versus contemporary approaches Drivers of cost Conventional approach: managers control costs by bringing them into line with some predetermined goal Contemporary approach: reduce costs by identifying waste and eliminating it through identifying the real cost drivers Strategic perspective Conventional approach: control costs within the organisation Contemporary approach: cost management also concerned with achieving value for the customer 16- (cont.) Copyright 2009 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Management Accounting 5e by Langfield-Smith Prepared by Kim Langfield-Smith Conventional versus contemporary approaches (cont.) Process perspective Conventional approach: control costs by reporting results for responsibility centres Contemporary approach: recognise that customers’ needs are met by processes which flow across the business .
