Managerial Accounting An Introduction to Concepts, Methods and Uses,9780324185638

Managerial Accounting An Introduction to Concepts, Methods and Uses

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ISBN13: 9780324185638
ISBN10: 0324185634
Format: Hardcover
Pub. Date: 2003-06-11
Publisher(s): South-Western College Pub
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Summary

This classic text for MBA programs offers balanced coverage of concepts, methods, and uses of managerial accounting with an increasingly strong emphasis on management decision-making. This approach helps to focus on concepts and managerial uses of financial information rather than techniques of cost accounting. The current edition emphasizes international issues, strategic effect of decisions, ethics, and the inclusion of new management accounting trends. Also emphasized are process improvement, integration of financial reporting issues for management decision-making, and application of managerial accounting tools to the emerging service sector, government, and nonprofits in examples and problem material.

Table of Contents

Preface v
PART ONE OVERVIEW AND BASIC CONCEPTS
1(126)
Fundamental Concepts
2(34)
User Orientation
3(1)
Managerial Application: Why Managers Need Cost Information
4(1)
Comparing Financial and Managerial Accounting
4(1)
Problem 1.1 for Self-Study
4(1)
Implementing Strategies
5(1)
Misuses of Accounting Information
5(1)
Key Financial Players in the Organization
6(2)
Professional Environment
8(3)
Managerial Application: J & J's Credo
11(1)
Understanding Basic Cost Concepts
11(3)
Contrasting Income Statements for Managerial Use to Those for External Reporting
14(2)
Problem 1.2 for Self-Study
16(1)
Managing Costs
16(2)
Combining the Value Chain and Strategic Cost Analysis
18(3)
Managerial Accounting in Modern Production Environments
21(2)
Problem 1.3 for Self-Study
23(1)
Costs and Benefits of Accounting
24(1)
The Makeup of the Book
24(1)
Summary
25(1)
Key Terms and Concepts
26(1)
Solutions to Self-Study Problems
26(1)
Appendix 1.1: Standards of Ethical Conduct for Management Accountants
27(2)
Questions, Exercises, Problems, and Cases
29(5)
Suggested Solutions to Even-Numbered Exercises
34(2)
Measuring Product Costs
36(48)
Product Costs in Manufacturing Companies
37(1)
Recording Costs by Department and Assigning Costs to Products
38(1)
Fundamental Accounting Model of Cost Flows
39(2)
Problem 2.1 for Self-Study
41(1)
Managerial Application: Using the Basic Cost Flow Equation to Detect Fraud
41(1)
Cost Measure: Actual or Normal Costing
42(2)
Terminology Note
44(1)
Problem 2.2 for Self-Study
44(1)
Choosing the Right Cost System
44(2)
Job and Process Costing Systems
46(1)
Problem 2.3 for Self-Study
47(1)
Service Organizations: Quality and Service Issues
48(3)
Problem 2.4 for Self-Study
51(1)
Customer Profitability Analysis
51(1)
Ethical Issues in Job Costing
52(1)
Just-in-Time (JIT) Methods
53(3)
Problem 2.5 for Self-Study
56(1)
Do Integrated Accounting Systems Satisfy Managerial Needs?
56(1)
Summary
57(1)
Key Terms and Concepts
58(1)
Appendix 2.1: Computing Costs of Equivalent Production
59(4)
Solutions to Self-Study Problems
63(2)
Questions, Exercises, Problems, and Cases
65(14)
Suggested Solutions to Even-Numbered Exercises
79(5)
Activity-Based Management
84(43)
Strategic Use of Activity-Based Management
86(1)
Activity Analysis
86(2)
Traditional Methods versus Activity-Based Costing
88(2)
Activity-Based Costing
90(1)
Activity-Based Costing Methods
90(3)
Activity-Based Costing Illustrated
93(3)
Problem 3.1 for Self-Study
96(1)
Activity-Based Management and Costing in Marketing
96(2)
Problem 3.2 for Self-Study
98(6)
Managerial Application: Identifying Unused Capacity in the Recovery Room
100(4)
Managerial Application: Impact of ABC on Shareholder Value
104(1)
Summary
104(1)
Key Terms and Concepts
105(1)
Solutions to Self-Study Problems
105(1)
Questions, Exercises, Problems, and Cases
106(17)
Suggested Solutions to Even-Numbered Exercises
123(4)
PART TWO MANAGERIAL DECISION MAKING
127(224)
Strategic Management of Costs, Quality, and Time
128(28)
Why Is Quality Important?
129(1)
Traditional versus Quality-Based View
130(1)
Quality According to the Customer
130(2)
Quality Control
132(1)
Costs of Failing to Control and Improve Quality
133(1)
Trading Off Quality Control and Failure Costs
133(2)
Problem 4.1 for Self-Study
135(1)
Measuring the Cost of Quality in a Nonmanufacturing Setting
136(1)
Does Quality Really Have a Cost?
136(1)
Managerial Application: Firestone Blows It
137(1)
Identifying Quality Problems
137(2)
Just-in-Time and Total Quality Management
139(1)
The Importance of Time in a Competitive Environment
140(2)
Using Activity-Based Management to Improve Customer Response Time
142(1)
Using the Balanced Scorecard to Measure Performance
142(2)
Managerial Application: Reducing Delivery Time to Gain a Competitive Advantage
143(1)
Traditional Managerial Accounting Systems Can Limit the Impact of Total Quality Management
144(1)
Summary
145(1)
Key Terms and Concepts
146(1)
Solution to Self-Study Problem
146(1)
Questions, Exercises, and Problems
147(6)
Suggested Solutions to Even-Numbered Exercises
153(3)
Cost Drivers and Cost Behavior
156(50)
The Nature of Fixed and Variable Costs
158(4)
Types of Fixed Costs
162(1)
Other Cost Behavior Patterns
162(3)
Problem 5.1 for Self-Study
165(3)
Problem 5.2 for Self-Study
168(1)
Cost Estimation Methods
168(1)
Estimating Costs Using Historical Data
168(8)
Problem 5.3 for Self-Study
176(2)
Data Problems
178(1)
Ethical Issues in Data Analysis
178(1)
Managerial Application: United Airlines Uses Regression to Estimate Cost Behavior
179(1)
Strengths and Weaknesses of Cost Estimation Methods
179(2)
Problem 5.4 for Self-Study
181(1)
Summary
182(1)
Key Terms and Concepts
183(1)
Solutions to Self-Study Problems
183(3)
Appendix 5.1: Deriving Learning Curves
186(1)
Appendix 5.2: Interpreting Regression Analysis Output
187(2)
Questions, Exercises, and Problems
189(14)
Suggested Solutions to Even-Numbered Exercises
203(3)
Financial Modeling for Short-Term Decision Making
206(44)
What Is Financial Modeling?
207(1)
The Cost-Volume-Profit Model
208(1)
Terminology Note
208(5)
Applications of Financial Modeling
213(1)
Problem 6.1 for Self-Study
214(2)
Problem 6.2 for Self-Study
216(2)
Using Sales Dollars as a Measure of Volume
218(1)
Income Taxes
219(1)
Managerial Application: Calculating Break-Even Points for a Brewpub
220(1)
Multiple Product Financial Modeling
220(4)
Problem 6.3 for Self-Study
224(1)
Simplifications and Assumptions
225(1)
Financial Modeling and ABC's Multiple-Cost Drivers
226(3)
Summary
229(1)
Key Terms and Concepts
230(1)
Solutions to Self-Study Problems
230(2)
Questions, Exercises, Problems, and Cases
232(13)
Suggested Solutions to Even-Numbered Exercises
245(5)
Differential Cost Analysis for Marketing Decisions
250(26)
The Differential Principle
251(3)
Major Influences on Pricing
254(1)
Short-Run versus Long-Run Pricing Decisions
255(1)
Differential Approach to Pricing
256(1)
Problem 7.1 for Self-Study
256(1)
Long-Run Pricing Decisions
257(1)
Managerial Application: Pricing Practices in Various Countries
258(1)
Using Target Prices to Set Target Costs
258(2)
Managerial Application: A Target Costing Challenge in Forest Products
259(1)
Legal Issues Relating Costs to Prices
260(1)
Customer Profitability and Differential Analysis
260(2)
Problem 7.2 for Self-Study
262(1)
Summary
263(1)
Key Terms and Concepts
263(1)
Solutions to Self-Study Problems
264(1)
Questions, Exercises, and Problems
264(10)
Suggested Solutions to Even-Numbered Exercises
274(2)
Differential Cost Analysis for Production Decisions
276(40)
Product Choice Decisions
277(3)
Theory of Constraints and Throughput Contribution Analysis
280(2)
Make-or-Buy Decisions
282(1)
Problem 8.1 for Self-Study
283(1)
Joint Products: Sell or Process Further
283(2)
Problem 8.2 for Self-Study
285(1)
Adding and Dropping Parts of Operations
285(1)
Problem 8.3 for Self-Study
286(1)
Inventory Management Decisions
287(2)
Innovations in Inventory Management and Flexible Manufacturing
289(1)
Problem 8.4 for Self-Study
290(1)
Summary
290(1)
Key Terms and Concepts
291(1)
Solutions to Self-Study Problems
292(1)
Appendix 8.1: Linear Programming
293(6)
Appendix 8.2: Economic Order Quantity Model
299(1)
Questions, Exercises, Problems, and Cases
300(13)
Suggested Solutions to Even-Numbered Exercises
313(3)
Capital Expenditure Decisions
316(35)
Capital Budgeting: Investment and Financing Decisions
318(1)
Strategic Considerations
318(1)
Managerial Application: Environmental Investments
319(1)
Discounted Cash Flow
319(3)
A Basic Example of Discounted Cash Flow Analysis
322(1)
Expanded Example of Discounted Cash Flow Analysis
323(1)
Problem 9.1 for Self-Study
324(1)
Sensitivity of Net Present Value to Estimates
325(3)
Internal Rate of Return
328(1)
Net Present Value and Internal Rate of Return: A Comparison
328(1)
Problem 9.2 for Self-Study
329(1)
Justification of Investments in Advanced Production Systems
329(2)
Managerial Application: Investing in Improved Technology
329(2)
Problem 9.3 for Self-Study
331(1)
Identifying Good Investments
332(1)
Audits and Capital Budgeting
333(1)
Behavioral Issues
333(1)
Summary
334(1)
Key Terms and Concepts
335(1)
Solutions to Self-Study Problems
336(3)
Questions, Exercises, Problems, and Cases
339(8)
Suggested Solutions to Even-Numbered Exercises
347(4)
PART THREE MOTIVATING MANAGERS TO MAKE GOOD DECISIONS
351(239)
Profit Planning and Budgeting
352(52)
Stragetic Planning
353(1)
The Organizational Plan
354(1)
The Human Element in Budgeting
355(3)
Managerial Application: Honesty in Managerial Reporting
357(1)
Tools for Planning and Performance Evaluation
358(2)
The Process of Developing the Master Budget
360(1)
Managerial Application: Developing Master Budgets Throughout the World
360(1)
Where to Start? With Your Customers (Forecasting Sales)
360(2)
Victoria's Gourmet Coffee: A Comprehensive Illustration
362(7)
Managerial Application: Using the Internet for Budgeting
369(1)
Incentives for Accurate Forecasts
369(1)
Comparison of the Flexible and Master Budgets
369(3)
Problem 10.1 for Self-Study
372(1)
Budgeting in Nonprofit Organizations
372(1)
Ethical Issues in Budgeting
372(1)
Establishing an Operating Budget in the Real World
373(3)
Summary
376(1)
Key Terms and Concepts
377(1)
Solution to Self-Study Problem
377(1)
Appendix 10.1: Comprehensive Master Budget---Victoria's Gourmet Coffee
378(6)
Appendix 10.2: Incentive Model for Accurate Reporting
384(2)
Questions, Exercises, Problems, and Cases
386(13)
Suggested Solutions to Even-Numbered Exercises
399(5)
Profit Center Performance Evaluation
404(34)
Variance Analysis
405(3)
Problem 11.1 for Self-Study
408(1)
Responsibility for Variances
409(2)
Overview of Variances
411(1)
Profit Variance Analysis for Service and Merchandise Organizations
411(1)
Problem 11.2 for Self-Study
412(1)
Beyond the Numbers
412(2)
Performance Evaluation: The Process
414(2)
Performance Measurement: The Measures
416(3)
Managerial Application: Does Effective Total Quality Management Require Nontraditional Performance Measures?
418(1)
Employee Involvement
419(1)
Summary
420(1)
Key Terms and Concepts
421(1)
Solutions to Self-Study Problems
422(1)
Questions, Exercises, Problems, and Cases
423(12)
Suggested Solutions to Even-Numbered Exercises
435(3)
Cost Center Performance Evaluation
438(44)
Production Cost Variance Analysis
439(2)
Responsibility for Production Variances
441(2)
Reasons for Materials, Labor, and Variable Manufacturing Overhead Variances
443(1)
Managerial Application: An Antidote to Biased Standards: How Workers Develop Their Own Standards at NUMMI
444(1)
Problem 12.1 for Self-Study
444(1)
Fixed Manufacturing Cost Variances
445(2)
Variable Overhead in Service Organizations
447(1)
Problem 12.2 for Self-Study
448(1)
Preparing and Analyzing Additional Production Cost Variances
448(1)
Problem 12.3 for Self-Study
448(2)
Problem 12.4 for Self-Study
450(7)
Problem 12.5 for Self-Study
457(1)
Activity-Based Standard Costing
457(1)
Variance Analysis in High-Technology Companies
458(1)
Quality Control and Variance Investigation
459(2)
Quality Management and the Baldrige Award
461(1)
Problem 12.6 for Self-Study
462(1)
Summary
462(1)
Key Terms and Concepts
463(1)
Appendix 12.1: Mix Variances
464(1)
Problem 12.7 for Self-Study
465(1)
Solutions to Self-Study Problems
466(2)
Questions, Exercises, Problems, and Cases
468(9)
Suggested Solutions to Even-Numbered Exercises
477(5)
Investment Center Performance Evaluation
482(42)
Divisional Organization and Performance
483(2)
Return on Investment as the Performance Measure
485(1)
Transfer Pricing: Measuring Divisional Revenue and Costs for Transactions inside the Organization
486(2)
Alternative Ways to Set Transfer Prices
488(4)
Problem 13.1 for Self-Study
492(1)
Global Transfer Pricing Practices
493(1)
Multinational and Multistate Transfer Pricing
493(2)
Managerial Application: Just-In-Time Production in Japan and the Internal Revenue Service in the United States
494(1)
Problem 13.2 for Self-Study
495(1)
Measuring Division Operating Costs
495(2)
Measuring the Investment in Divisions
497(1)
Contribution Approach to Division Reporting
497(1)
Components of Return on Investment
498(1)
Economic Value Added
499(4)
Managerial Application: Does Economic Value Added Beat Earnings?
502(1)
Problem 13.3 for Self-Study
503(1)
Summary
503(2)
Key Terms and Concepts
505(1)
Solutions to Self-Study Problems
505(1)
Questions, Exercises, Problems, and Cases
506(14)
Suggested Solutions to Even-Numbered Exercises
520(4)
Incentive Issues
524(36)
Divisional Incentive Compensation Plans
525(3)
Managerial Application: Conflicts in an Incentive Compensation Plan
527(1)
Views of Behavior
528(1)
Using the Balanced Scorecard
529(3)
Building the Incentive Plan around the Balanced Scorecard
532(6)
Managerial Application: Cost Management in Action: Why Hewlett-Packard Now Manages Suppliers Instead of Overhead
533(2)
Managerial Application: Does Customer Satisfaction Pay Off?
535(2)
Managerial Application: Successfully Implementing the Balanced Scorecard: The FMC Experience
537(1)
Problem 14.1 for Self-Study
538(1)
Motivational Issues in Designing Incentive Systems for Division Managers and Their Subordinates
538(3)
Applications to Nonprofit Organizations
541(1)
Problems with Incentive Compensation Plans
542(1)
Fraudulent Financial Reporting
543(1)
Types of Fraud
544(2)
Managerial Application: Software Company's Stock Tanks after Premature Revenue Recognition Disclosed
545(1)
Causes of Financial Fraud
546(2)
Environmental Conditions
548(1)
Controls to Prevent Fraud
548(1)
Incentive Problems in International Markets
549(1)
Problem 14.2 for Self-Study
550(1)
Summary
550(1)
Key Terms and Concepts
551(1)
Solutions to Self-Study Problems
551(1)
Questions, Exercises, Problems, and Cases
552(7)
Suggested Solutions to Even-Numbered Exercises
559(1)
Allocating Costs to Responsibility Centers
560(30)
The Nature of Common Costs
561(1)
Managerial Application: Allocating Corporate Costs to Retail Stores
562(1)
Cost Allocation
562(5)
Problem 15.1 for Self-Study
567(1)
Marketing and Administrative Expenses
568(1)
Allocating Joint-Process Costs
568(2)
Joint-Process Cost Allocation Methods
570(1)
Problem 15.2 for Self-Study
571(1)
Problem 15.3 for Self-Study
572(1)
Summary
572(1)
Key Terms and Concepts
573(1)
Solutions to Self-Study Problems
573(3)
Questions, Exercises, Problems, and Cases
576(11)
Suggested Solutions to Even-Numbered Exercises
587(3)
Appendix: Compound Interest Examples and Applications 590(19)
Compound Interest and Annuity Tables 609(6)
Glossary 615(90)
Index 705

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