Page 8 - Finance for Non-Financial Managers

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Contents
8. Cost Accounting: A Really Short Course in
Manufacturing Productivity
The Purpose of Cost Accounting—Strictly for Insiders 121
122
Fixed and Variable Expenses in the Factory 128
Controllable and Uncontrollable Expenses 130
Standard Costs—Little Things Mean a Lot 132
Manufacturing Cost Variances—Analysis for Action 134
Manager’s Checklist for Chapter 8 136
9. Business Planning: Creating the Future
You Want, Step by Step 138
Why Take Time to Plan? 138
Strategic Planning vs. Operational Planning 141
Vision and Mission—The Starting Point 143
Strategy—Setting Direction 145
Long-Term Goals—The Path to the Mission 145
Short-Term Goals and Milestones—The Operating Plan 147
Manager’s Checklist for Chapter 9 153

10. The Annual Budget: Financing Your Plans 155
Tools for Telling the Future: Budgets, Forecasts,
Projections, and Tea Leaves 156
How to Budget for Revenues—The “Unpredictable”
Starting Point 157
Budgeting Costs—Understanding Relationships
That Affect Costs 160
The Budgeting Process—Trial and Error 162
Flexible Budgets—Whatever Happens, We’ve Got
a Budget for It 166
Variance Reporting and Taking Action 169
Manager’s Checklist for Chapter 10 171

11. Financing the Business: Understanding the Debt
vs. Equity Options 173
How a Business Gets Financed—In the Beginning
and Over Time 173
Short-Term Debt—Balancing Working Capital Needs 175
Long-Term Debt—Semi-Permanent Capital or
Asset Acquisition Financing 181
Convertible Debt—The Transition from Debt to Equity 185
Capital Stock—Types and Uses 186
Manager’s Checklist for Chapter 11 191