British Library Cataloguing-in-Publication Data

Transcription

1

2 Vice President, Business Publishing: Donna Battista Senior Acquisitions Editor: Lacey Vitetta Editorial Assistant: Christine Donovan Vice President, Product Marketing: Maggie Moylan Director of Marketing, Digital Services and Products: Jeanette Koskinas Senior Product Marketing Manager: Alison Haskins Executive Field Marketing Manager: Lori DeShazo Senior Strategic Marketing Manager: Erin Gardner Team Lead, Program Management: Ashley Santora Program Manager: Mary Kate Murray Team Lead, Project Management: Jeff Holcomb Project Manager: Roberta Sherman Supplements Project Manager: Andra Skaalrud Associate Project Editor, Global Edition: Amrita Kar Manager, Media Production, Global Edition: Vikram Kumar Senior Manufacturing Controller, Production, Global Edition: Trudy Kimber Operations Specialist: Carol Melville Creative Director: Blair Brown Art Director: Jon Boylan Vice President, Director of Digital Strategy and Assessment: Paul Gentile Manager of Learning Applications: Paul Deluca Digital Editor: Sarah Peterson Director, Digital Studio: Sacha Laustsen Digital Studio Manager: Diane Lombardo Product Manager: James Bateman Digital Content Team Lead: Noel Lotz Digital Content Project Lead: Martha LaChance Full-Service Project Management and Composition: Integra Software Services Pvt. Ltd. Interior Designer: Jon Boylan Cover Designer: Lumina Datamatics Ltd Cover Art: Singkham/Shutterstock Printer/Binder: Lego Italy Cover Printer: Lego Italy Typeface: 11/13, Adobe Garamond Pro Regular Microsoft and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published as part of the services for any purpose. All such documents and related graphics are provided as is without warranty of any kind. Microsoft and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all warranties and conditions of merchantability, whether express, implied or statutory, fitness for a particular purpose, title and non-infringement. In no event shall Microsoft and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from the services. The documents and related graphics contained herein could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Microsoft and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time. Partial screen shots may be viewed in full within the software version specified. Microsoft and Windows are registered trademarks of the Microsoft Corporation in the U.S.A. and other countries. This book is not sponsored or endorsed by or affiliated with the Microsoft Corporation. Pearson Education Limited Edinburgh Gate Harlow Essex CM20 2JE England and Associated Companies throughout the world Visit us on the World Wide Web at: Pearson Education Limited 2016 The rights of Tracie L. Miller-Nobles, Brenda L. Mattison and Ella Mae Matsumurato be identified as the authors of this work have been asserted by them in accordance with the Copyright, Designs and Patents Act Authorized adaptation from the United States edition, entitled Horngren s Financial & Managerial Accounting, The Managerial Chapters, 5th edition, ISBN , by Tracie L. Miller-Nobles, Brenda L. Mattison and Ella Mae Matsumurato, published by Pearson Education All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without either the prior written permission of the publisher or a license permitting restricted copying in the United Kingdom issued by the Copyright Licensing Agency Ltd, Saffron House, 6 10 Kirby Street, London EC 1N 8TS. All trademarks used herein are the property of their respective owners. The use of any trademark in this text does not vest in the author or publisher any trademark ownership rights in such trademarks, nor does the use of such trademarks imply any affiliation with or endorsement of this book by such owners. ISBN-10: ISBN-13: British Library Cataloguing-in-Publication Data A catalogue record for this book is available from the British Library Typeset by Printed and bound by

3 Horngren's Financial & Managerial Accounting, The Managerial Chapters, Global Edition Table of Contents Cover Title Page Copyright Page About the Authors Contents Chapter 16 Introduction to Managerial Accounting Why Is Managerial Accounting Important? Financial Versus Managerial Accounting Management Accountability Todays Business Environment Ethical Standards How Do Service, Merchandising, and Manufacturing Companies Differ? Service Companies Merchandising Companies Manufacturing Companies How Are Costs Classified? Direct and Indirect Costs Product Costs Prime and Conversion Costs How Do Manufacturing Companies Determine the Cost of Manufactured Products? Calculating Cost of Goods Sold Calculating Cost of Goods Manufactured Flow of Costs Through the Inventory Accounts Calculating Unit Product Cost How Is Managerial Accounting Used in Service and Merchandising Companies? Calculating Cost per Service Calculating Cost per Item Chapter 17 Job Order Costing How Do Manufacturing Companies Use Job Order and Process Costing Systems? Job Order Costing Process Costing How Do Materials and Labor Costs Flow Through the Job Order Costing System? Materials

4 Labor How Do Overhead Costs Flow Through the Job Order Costing System? Before the PeriodCalculating the Predetermined Overhead Allocation Rate During the PeriodAllocating Overhead At the End of the PeriodAdjusting for Overallocated and Underallocated Overhead What Happens When Products Are Completed and Sold? Transferring Costs to Finished Goods Inventory Transferring Costs to Cost of Goods Sold How Is the Manufacturing Overhead Account Adjusted? Summary How Do Service Companies Use a Job Order Costing System? Chapter 18 Process Costing How Do Costs Flow Through a Process Costing System? Job Order Costing Versus Process Costing Flow of Costs Through a Process Costing System What Are Equivalent Units of Production, and How are They Calculated? Equivalent Units of Production Conversion Costs How Is a Production Cost Report Prepared? Production Cost ReportFirst ProcessAssembly Department Production Cost ReportSecond ProcessCutting Department What Journal Entries Are Required in a Process Costing System? Transaction 1Raw Materials Purchased Transaction 2Raw Materials Used in Production Transaction 3Labor Costs Incurred Transaction 4Additional Manufacturing Costs Incurred Transaction 5Allocation of Manufacturing Overhead Transaction 6Transfer from the Assembly Department to the Cutting Department Transaction 7Transfer from Cutting Department to Finished Goods Inventory Transaction 8Puzzles Sold Transaction 9Adjust Manufacturing Overhead How Can the Production Cost Report Be Used to Make Decisions? APPENDIX 18A: Process Costing: First-In, First-Out Method How Is a Production Cost Report Prepared Using the FIFO Method? Comparison of Weighted-Average and FIFO Methods

5 Chapter 19 Cost Management Systems: Activity-Based, Just-In-Time, and Quality Management Systems How Do Companies Assign And Allocate Costs? Single Plantwide Rate Multiple Department Rates How Is an Activity-Based Costing System Developed? Step 1: Identify Activities and Estimate Their Total Costs Step 2: Identify the Allocation Base for Each Activity and Estimate the Total Quantity of Each Allocation Base Step 3: Compute the Predetermined Overhead Allocation Rate for Each Activity Step 4: Allocate Indirect Costs to the Cost Object Traditional Costing Systems Compared with ABC Systems How Can Companies Use Activity-Based Management to Make Decisions? Pricing and Product Mix Decisions Cost Management Decisions Can Activity-Based Management Be Used in Service Companies? How Do Just-In-Time Management Systems Work? Just-In-Time Costing Recording Transactions in JIT How Do Companies Manage Quality Using a Quality Management System? Quality Management Systems The Four Types of Quality Costs Quality Improvement Programs Chapter 20 Cost-Volume-Profit Analysis How Do Costs Behave When There Is a Change in Volume? Variable Costs Fixed Costs Mixed Costs What Is Contribution Margin, and How Is It Used to Compute Operating Income? Contribution Margin Unit Contribution Margin Contribution Margin Ratio Contribution Margin Income Statement How Is Cost-Volume-Profit (CVP) Analysis Used? Assumptions

6 Target ProfitThree Approaches Breakeven PointA Variation of Target Profit CVP GraphA Graphic Portrayal How Is CVP Analysis Used for Sensitivity Analysis? Changes in the Sales Price Changes in Variable Costs Changes in Fixed Costs What Are Some Other Ways CVP Analysis Can Be Used? Margin of Safety Operating Leverage Sales Mix Comprehensive Problem for Chapters 1620 Chapter 21 Variable Costing How Does Variable Costing Differ from Absorption Costing? Absorption Costing Variable Costing Comparison of Unit Product Costs How Does Operating Income Differ Between Variable Costing and Absorption Costing? Production Equals Sales Production Exceeds Sales Production Is Less Than Sales Summary How Can Variable Costing Be Used for Decision Making in a Manufacturing Company? Setting Sales Prices Controlling Costs Planning Production Analyzing Profitability Analyzing Contribution Margin Summary How Can Variable Costing Be Used for Decision Making in a Service Company? Operating Income Profitability Analysis Contribution Margin Analysis

7 Chapter 22 Master Budgets Why Do Managers Use Budgets? Table of Contents Budgeting Objectives Budgeting Benefits Budgeting Procedures Budgeting and Human Behavior Are There Different Types of Budgets? Strategic and Operational Budgets Static and Flexible Budgets Master Budgets How Are Operating Budgets Prepared for a Manufacturing Company? Sales Budget Production Budget Direct Materials Budget Direct Labor Budget Manufacturing Overhead Budget Cost of Goods Sold Budget Selling and Administrative Expense Budget How Are Financial Budgets Prepared for a Manufacturing Company? Capital Expenditures Budget Cash Budget Budgeted Income Statement Budgeted Balance Sheet Budgeted Statement of Cash Flows How Can Information Technology Be Used in the Budgeting Process? Sensitivity Analysis Budgeting Software APPENDIX 22A: Budgeting for Merchandising Companies How Are Operating Budgets Prepared for a Merchandising Company? Sales Budget Inventory, Purchases, and Cost of Goods Sold Budget Selling and Administration Expense Budget How Are Financial Budgets Prepared for a Merchandising Company? Capital Expenditures Budget Cash Budget Budgeted Income Statement Budgeted Balance Sheet Budgeted Statement of Cash Flows

8 Table of Contents Chapter 23 Flexible Budgets and Standard Cost Systems How Do Managers Use Budgets to Control Business Activities? Performance Reports Using Static Budgets Performance Reports Using Flexible Budgets Why Do Managers Use a Standard Cost System to Control Business Activities? Setting Standards Standard Cost System Benefits Variance Analysis for Product Costs How Are Standard Costs Used to Determine Direct Materials and Direct Labor Variances? Direct Materials Variances Direct Labor Variances How Are Standard Costs Used to Determine Manufacturing Overhead Variances? Allocating Overhead in a Standard Cost System Variable Overhead Variances Fixed Overhead Variances What Is the Relationship Among the Product Cost Variances, and Who Is Responsible for Them? Variance Relationships Variance Responsibilities How Do Journal Entries Differ in a Standard Cost System? Journal Entries Standard Cost Income Statement Chapter 24 Responsibility Accounting and Performance Evaluation Why Do Decentralized Companies Need Responsibility Accounting? Advantages of Decentralization Disadvantages of Decentralization Responsibility Accounting What Is a Performance Evaluation System, and How Is It Used? Goals of Performance Evaluation Systems Limitations of Financial Performance Measurement The Balanced Scorecard How Do Companies Use Responsibility Accounting to Evaluate Performance in Cost, Revenue, and Profit Centers? Controllable Versus Noncontrollable Costs Responsibility Reports

9 How Does Performance Evaluation in Investment Centers Differ From Other Centers? Return on Investment (ROI) Residual Income (RI) Limitations of Financial Performance Measures How Do Transfer Prices Affect Decentralized Companies? Objectives in Setting Transfer Prices Setting Transfer Prices Comprehensive Problem for Chapters 2224 Chapter 25 Short-Term Business Decisions How Is Relevant Information Used to Make Short-Term Decisions? Relevant Information Relevant Nonfinancial Information Differential Analysis How Does Pricing Affect Short-Term Decisions? Setting Regular Prices Special Pricing How Do Managers Decide Which Products to Produce and Sell? Dropping Unprofitable Products and Segments Product Mix Sales Mix How Do Managers Make Outsourcing and Processing Further Decisions? Outsourcing Sell or Process Further Chapter 26 Capital Investment Decisions What Is Capital Budgeting? The Capital Budgeting Process Focus on Cash Flows How Do the Payback and Accounting Rate of Return Methods Work? Payback Accounting Rate of Return (ARR) What Is the Time Value of Money? Time Value of Money Concepts Present Value of a Lump Sum

10 Present Value of an Annuity Summary How Do Discounted Cash Flow Methods Work? Net Present Value (NPV) Internal Rate of Return (IRR) Comparing Capital Investment Analysis Methods Sensitivity Analysis Capital Rationing Comprehensive Problem for Chapters 2526 APPENDIX A2013 Green Mountain Coffee Roasters, Inc. Annual Report APPENDIX BPresent Value Tables APPENDIX C Accounting Information Systems APPENDIX DThe Statement of Cash Flows APPENDIX E Financial Statement Analysis GLOSSARY A B C D E F G H I J K L M N O P Q R S

11 T U V W INDEX A B C D E F G H I J K L M N O P Q R S T U V W PHOTO CREDITS