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1 Introduction to Managerial Accounting |
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1 | (47) |
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What Is Managerial Accounting? |
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2 | (1) |
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Managers' Three Primary Responsibilities |
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2 | (1) |
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A Road Map: How Managerial Accounting Fits In |
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3 | (1) |
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Differences Between Managerial Accounting and Financial Accounting |
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4 | (2) |
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What Role Do Management Accountants Play? |
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6 | (1) |
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The Role of Management Accountants |
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6 | (1) |
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The Skills Required of Management Accountants |
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7 | (1) |
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Managerial Accounting Is Important to All Careers |
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8 | (1) |
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Accounting within the Organizational Structure |
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9 | (1) |
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Professional Associations |
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10 | (2) |
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Average Salaries of Management Accountants |
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12 | (1) |
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12 | (2) |
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Examples of Ethical Dilemmas |
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14 | (4) |
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What Business Trends and Regulations Affect Management Accounting? |
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18 | (1) |
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Big Data, Data Analytics, and Critical Thinking |
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18 | (2) |
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20 | (1) |
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20 | (1) |
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Lean Thinking and Focus on Quality |
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21 | (1) |
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Sustainability, Social Responsibility, and the Triple Bottom Line |
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21 | (1) |
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22 | (1) |
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The Sarbanes-Oxley Act of 2002 |
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23 | (4) |
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27 | (21) |
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2 Building Blocks of Managerial Accounting |
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48 | (56) |
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What Are the Most Common Business Sectors and Their Activities? |
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49 | (1) |
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Service, Merchandising, and Manufacturing Companies |
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49 | (2) |
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Which Business Activities Make Up the Value Chain? |
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51 | (1) |
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Coordinating Activities Across the Value Chain |
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52 | (3) |
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How Do Companies Define Cost? |
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55 | (1) |
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Cost Objects, Direct Costs, and Indirect Costs |
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55 | (2) |
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Costs for Internal Decision Making and External Reporting |
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57 | (1) |
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Merchandising Companies' Product Costs |
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58 | (2) |
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Manufacturing Companies' Product Costs |
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60 | (1) |
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Prime and Conversion Costs |
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61 | (1) |
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Additional Labor Compensation Costs |
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62 | (1) |
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Recap: Product Costs Versus Period Costs |
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62 | (3) |
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How Are Product Costs and Period Costs Shown in the Financial Statements? |
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65 | (1) |
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65 | (1) |
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65 | (2) |
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67 | (3) |
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70 | (1) |
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What Other Cost Terms Are Used by Managers? |
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71 | (1) |
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Controllable Versus Uncontrollable Costs |
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71 | (1) |
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Relevant and Irrelevant Costs |
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71 | (1) |
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72 | (1) |
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How Manufacturing Costs Behave |
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73 | (1) |
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Calculating Total and Average Costs |
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73 | (5) |
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78 | (26) |
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104 | (71) |
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What Methods Are Used to Determine the Cost of Manufacturing a Product? |
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105 | (1) |
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105 | (1) |
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106 | (1) |
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How Do Manufacturers Determine a Job's Cost? |
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107 | (1) |
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Overview: Flow of Inventory Through a Manufacturing System |
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107 | (1) |
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108 | (1) |
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109 | (1) |
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Using a Job Cost Record to Keep Track of Job Costs |
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110 | (2) |
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Tracing Direct Materials Cost to a Job |
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112 | (2) |
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Tracing Direct Labor Cost to a Job |
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114 | (2) |
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Allocating Manufacturing Overhead to a Job |
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116 | (3) |
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Completing the Job Cost Record and Using It to Make Business Decisions |
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119 | (2) |
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How Can Job Costing Information Be Enhanced for Decision Making? |
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121 | (1) |
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121 | (2) |
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Direct or Variable Costing |
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123 | (4) |
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How Do Managers Deal with Underallocated or Overallocated Manufacturing Overhead? |
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127 | (2) |
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What Journal Entries Are Needed in a Manufacturer's Job Costing System? |
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129 | (14) |
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143 | (1) |
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How Do Service Firms Use Job Costing to Determine the Amount to Bill Clients? |
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143 | (1) |
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What Costs Are Considered Direct Costs of Serving a Client? |
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143 | (1) |
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What Costs Are Considered Indirect Costs of Serving a Client? |
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144 | (1) |
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Finding the Total Cost of the Job and Adding a Profit Markup |
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145 | (1) |
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Invoicing Clients Using a Professional Billing Rate |
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145 | (1) |
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What Journal Entries Are Needed in a Service Firm's Job Costing System? |
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146 | (1) |
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147 | (28) |
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4 Activity-Based Costing, Lean Operations, and the Costs of Quality |
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175 | (70) |
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Why and How Do Companies Refine Their Cost Allocation Systems? |
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176 | (1) |
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Simple Cost Allocation Systems Can Lead to Cost Distortion |
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176 | (1) |
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Review: Using a Plantwide Overhead Rate to Allocate Indirect Costs |
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177 | (2) |
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Using Departmental Overhead Rates to Allocate Indirect Costs |
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179 | (5) |
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Using Activity-Based Costing to Allocate Indirect Costs |
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184 | (7) |
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How Do Managers Use the Refined Cost Information to Improve Operations? |
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191 | (1) |
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Activity-Based Management (ABM) |
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191 | (2) |
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Passing the Cost-Benefit Test |
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193 | (5) |
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198 | (1) |
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The Eight Wastes of Traditional Operations |
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198 | (2) |
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Characteristics of Lean Operations |
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200 | (5) |
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Lean Operations in Service and Merchandising Companies |
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205 | (1) |
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How Do Managers Improve Quality? |
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206 | (1) |
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206 | (1) |
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207 | (1) |
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Using Costs of Quality Reports to Aid Decisions |
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208 | (5) |
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213 | (32) |
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245 | (62) |
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Process Costing: An Overview |
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246 | (1) |
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Two Basic Costing Systems: Job Costing and Process Costing |
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246 | (1) |
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How Does the Flow of Costs Differ Between Job and Process Costing? |
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247 | (3) |
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What Are the Building Blocks of Process Costing? |
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250 | (1) |
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250 | (1) |
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250 | (1) |
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Inventory Flow Assumptions |
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251 | (1) |
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How Does Process Costing Work in the First Processing Department? |
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252 | (2) |
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Step 1 Summarize the Flow of Physical Units |
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254 | (1) |
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Step 2 Compute Output in Terms of Equivalent Units |
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254 | (2) |
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Step 3 Summarize Total Costs to Account For |
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256 | (1) |
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Step 4 Compute the Cost per Equivalent Unit |
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256 | (1) |
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Step 5 Assign Total Costs to Units Completed and to Units in Ending Work in Process Inventory |
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257 | (1) |
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257 | (2) |
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What Journal Entries Are Needed in a Process Costing System? |
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259 | (5) |
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How Does Process Costing Work in a Second or Later Processing Department? |
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264 | (1) |
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Process Costing in SeaView's Insertion Department |
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264 | (2) |
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Steps 1 and 2 Summarize the Flow of Physical Units and Compute Output in Terms of Equivalent Units |
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266 | (1) |
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Steps 3 and 4 Summarize Total Costs to Account for and Compute the Cost per Equivalent Unit |
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267 | (1) |
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Step 5 Assign Total Costs to Units Completed and to Units in Ending Work in Process Inventory |
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268 | (1) |
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Unit Costs and Gross Profit |
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268 | (1) |
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269 | (1) |
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Journal Entries in a Second Processing Department |
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270 | (5) |
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275 | (32) |
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307 | (74) |
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Cost Behavior: How Do Changes in Volume Affect Costs? |
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308 | (1) |
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308 | (3) |
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311 | (3) |
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314 | (2) |
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316 | (1) |
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317 | (5) |
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How Do Managers Determine Cost Behavior? |
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322 | (1) |
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322 | (1) |
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322 | (2) |
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324 | (2) |
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326 | (4) |
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330 | (1) |
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What Are the Roles of Variable Costing and the Contribution Margin Income Statement? |
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331 | (1) |
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Comparing Absorption Costing and Variable Costing |
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331 | (2) |
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The Contribution Margin Income Statement |
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333 | (3) |
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Comparing Operating Income: Variable Versus Absorption Costing |
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336 | (2) |
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Reconciling Operating Income Between the Two Costing Systems |
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338 | (8) |
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346 | (35) |
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7 Cost-Volume-Profit Analysis |
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381 | (62) |
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How Does Cost-Volume-Profit Analysis Help Managers? |
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382 | (1) |
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Data and Assumptions Required for CVP Analysis |
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382 | (1) |
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The Unit Contribution Margin |
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383 | (2) |
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The Contribution Margin Ratio |
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385 | (1) |
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How Do Managers Find the Breakeven Point? |
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386 | (1) |
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The Income Statement Approach |
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387 | (1) |
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The Shortcut Approach Using the Unit Contribution Margin |
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388 | (1) |
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The Shortcut Approach Using the Contribution Margin Ratio |
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388 | (1) |
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How Do Managers Find the Volume Needed to Earn a Target Profit? |
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389 | (1) |
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How Much Must We Sell to Earn a Target Profit? |
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389 | (2) |
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Graphing CVP Relationships |
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391 | (5) |
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How Do Managers Use CVP to Make Decisions When Business Conditions Change? |
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396 | (1) |
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Changing the Sales Price and Volume |
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396 | (2) |
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398 | (1) |
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399 | (3) |
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Changing the Mix of Products Offered for Sale |
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402 | (4) |
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What Are Some Common Indicators of Risk? |
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406 | (1) |
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406 | (1) |
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407 | (2) |
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Choosing a Cost Structure |
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409 | (6) |
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415 | (28) |
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8 Relevant Costs for Short-Term Decisions |
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443 | (64) |
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How Do Managers Make Decisions? |
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444 | (1) |
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444 | (1) |
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Keys to Making Short-Term Special Decisions |
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445 | (1) |
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Decision Pitfalls to Avoid |
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446 | (2) |
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How Do Managers Make Pricing and Special Order Decisions? |
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448 | (1) |
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Regular Pricing Decisions |
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448 | (5) |
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453 | (7) |
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How Do Managers Make Other Special Business Decisions? |
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460 | (1) |
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Decisions to Discontinue Products, Departments, or Stores |
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460 | (4) |
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Product Mix Decisions When Resources Are Constrained |
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464 | (3) |
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Outsourcing Decisions (Make or Buy) |
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467 | (5) |
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Decisions to Sell As Is or Process Further |
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472 | (5) |
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477 | (30) |
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507 | (76) |
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How and Why Do Managers Use Budgets? |
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508 | (1) |
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508 | (1) |
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How Are Budgets Developed? |
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508 | (2) |
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What Are the Benefits of Budgeting? |
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510 | (1) |
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What Is the Master Budget? |
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511 | (1) |
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How Are the Operating Budgets Prepared? |
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512 | (1) |
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512 | (1) |
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513 | (2) |
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515 | (1) |
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516 | (1) |
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Manufacturing Overhead Budget |
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517 | (1) |
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Operating Expenses Budget |
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518 | (1) |
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Budgeted Income Statement |
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519 | (5) |
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How Are the Financial Budgets Prepared? |
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524 | (1) |
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Capital Expenditures Budget |
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524 | (1) |
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524 | (1) |
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525 | (2) |
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527 | (1) |
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528 | (2) |
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Sensitivity Analysis and Flexible Budgeting |
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530 | (1) |
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How Do the Budgets for Service and Merchandising Companies Differ? |
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531 | (1) |
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531 | (1) |
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531 | (2) |
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Impact of Credit and Debit Card Sales on Budgeting |
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533 | (7) |
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540 | (43) |
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10 Performance Evaluation |
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583 | (127) |
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How Does Decentralization Affect Performance Evaluation? |
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584 | (1) |
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Advantages and Disadvantages of Decentralization |
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584 | (1) |
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Performance Evaluation Systems |
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585 | (1) |
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What Is Responsibility Accounting? |
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585 | (1) |
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Types of Responsibility Centers |
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586 | (2) |
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Responsibility Center Performance Reports |
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588 | (2) |
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Evaluation of Investment Centers |
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590 | (7) |
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What Is Transfer Pricing? |
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597 | (1) |
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Strategies and Mechanisms for Determining a Transfer Price |
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598 | (5) |
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How Do Managers Use Flexible Budgets to Evaluate Performance? |
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603 | (1) |
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Creating a Flexible Budget Performance Report |
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604 | (3) |
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Underlying Causes of the Variances |
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607 | (2) |
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How Do Companies Incorporate Nonfinancial Performance Measurement? |
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609 | (1) |
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609 | (8) |
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617 | (36) |
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Standard Costs and Variances |
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653 | (1) |
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654 | (1) |
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654 | (1) |
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Information Used to Develop and Update Standards |
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655 | (1) |
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655 | (3) |
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How Do Managers Use Standard Costs to Compute DM and DL Variances? |
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658 | (1) |
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Using Standard Costs to Develop the Flexible Budget |
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658 | (1) |
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Direct Materials Variances |
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658 | (6) |
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664 | (2) |
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Summary of Direct Materials and Direct Labor Variances |
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666 | (1) |
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Advantages and Disadvantages of Using Standard Costs and Variances |
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666 | (5) |
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How Do Managers Use Standard Costs to Compute MOH Variances? |
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671 | (1) |
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Variable Manufacturing Overhead Variances |
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671 | (2) |
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Fixed Manufacturing Overhead Variances |
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673 | (2) |
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675 | (4) |
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679 | (1) |
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679 | (3) |
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Standard Costing Income Statement |
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682 | (1) |
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683 | (27) |
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12 Capital Investment Decisions and the Time Value of Money |
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710 | (69) |
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What Is Capital Budgeting? |
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711 | (1) |
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Four Popular Methods of Capital Budgeting Analysis |
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711 | (1) |
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712 | (1) |
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Capital Budgeting Process |
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712 | (2) |
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How Do Managers Calculate the Payback Period and Accounting Rate of Return? |
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714 | (1) |
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714 | (3) |
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Accounting Rate of Return (ARR) |
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717 | (6) |
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How Do Managers Compute the Time Value of Money? |
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723 | (1) |
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Factors Affecting the Time Value of Money |
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723 | (1) |
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Future Values and Present Values: Points Along the Time Continuum |
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724 | (1) |
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Future Value and Present Value Factors |
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725 | (1) |
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Calculating Future Values of Single Sums and Annuities Using FV Factors |
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726 | (1) |
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Calculating Present Values of Single Sums and Annuities Using PV Factors |
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727 | (3) |
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How Do Managers Calculate the Net Present Value and Internal Rate of Return? |
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730 | (1) |
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731 | (5) |
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Internal Rate of Return (IRR) |
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736 | (3) |
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How Do the Capital Budgeting Methods Compare? |
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739 | (4) |
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743 | (1) |
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Present Value Tables and Future Value Tables |
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743 | (1) |
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Table A Present Value of $1 |
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743 | (1) |
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Table B Present Value of Annuity of $1 |
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744 | (1) |
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Table C Future Value of $1 |
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745 | (1) |
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Table D Future Value of Annuity of $1 |
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746 | (1) |
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747 | (1) |
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Solutions to Chapter Examples Using Microsoft Excel |
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747 | (4) |
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751 | (1) |
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Using a TI-83, TI-83 Plus, TI-84, or TI-84 Plus Calculator to Perform Time Value of Money Calculations |
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751 | (6) |
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757 | (22) |
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13 Statement of Cash Flows |
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779 | (59) |
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What Is the Statement of Cash Flows? |
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780 | (1) |
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Three Types of Activities That Generate and Use Cash |
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781 | (2) |
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Two Methods of Presenting Operating Activities |
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783 | (5) |
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How Is the Statement of Cash Flows Prepared Using the Indirect Method? |
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788 | (1) |
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Information Needed to Prepare the Statement of Cash Flows |
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788 | (1) |
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Preparing the Cash Flows from Operating Activities |
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788 | (6) |
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Preparing the Cash Flows from Investing Activities |
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794 | (2) |
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Preparing the Cash Flows from Financing Activities |
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796 | (2) |
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Interpreting the Statement of Cash Flows |
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798 | (1) |
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Recap: Steps to Preparing the Statement of Cash Flows Using the Indirect Method |
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798 | (1) |
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How Is the Statement of Cash Flows Prepared Using the Direct Method? |
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799 | (1) |
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799 | (1) |
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Determining Cash Payments and Receipts |
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800 | (8) |
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808 | (30) |
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14 Financial Statement Analysis |
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838 | (56) |
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What Are the Most Common Methods of Analysis? |
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839 | (1) |
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What Is Horizontal Analysis? |
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839 | (2) |
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Horizontal Analysis of the Income Statement |
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841 | (1) |
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Horizontal Analysis of the Balance Sheet |
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841 | (1) |
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841 | (2) |
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What Is Vertical Analysis? |
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843 | (2) |
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How Do We Compare One Company with Another? |
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845 | (1) |
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845 | (4) |
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What Are Some of the Most Common Financial Ratios? |
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849 | (1) |
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Measuring Ability to Pay Current Liabilities |
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849 | (1) |
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Measuring Ability to Sell Inventory and Collect Receivables |
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850 | (2) |
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Measuring Ability to Pay Long-Term Debt |
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852 | (1) |
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853 | (4) |
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Analyzing Stock Investments |
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857 | (1) |
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Red Flags in Financial Statement Analysis |
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858 | (7) |
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865 | (29) |
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894 | |
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What Is Sustainability, and How Does It Create Business Value? |
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895 | (1) |
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896 | (1) |
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The Business Case for Sustainability |
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897 | (5) |
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What Is Sustainability Reporting? |
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902 | (1) |
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Current State of Sustainability Reporting |
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902 | (1) |
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Reasons for Sustainability Reporting |
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903 | (1) |
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Framework for Sustainability Reporting |
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903 | (5) |
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What Is Environmental Management Accounting (EMA)? |
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908 | (1) |
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908 | (1) |
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Uses of Environmental Management Accounting Information |
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909 | (2) |
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Challenges to Implementing EMA Systems |
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911 | (1) |
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Future of Environmental Management Accounting |
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912 | (2) |
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914 | |
Glossary/Index |
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1 | |