5 IN CONTRAST TO FINANCIAL ACCOUNTING, MANA-COME FROM COST REDUCTION...

1-5

In contrast to financial accounting, mana-

come from cost reductions, but the primary bene-

gerial accounting: (1) focuses on the needs of the

fit is often an increase in capacity. At non-con-

manager; (2) places more emphasis on the future;

straints, increases in capacity just add to the al-

(3) emphasizes relevance and flexibility, rather

than precision; (4) emphasizes the segments of an

ready-existing excess capacity. Therefore, im-

provement efforts should ordinarily focus on the

organization; (5) is not governed by GAAP; and

constraint.

(6) is not mandatory.