Brief Contents. Preface xv Acknowledgements xix

Transcription

1 Brief Contents Preface xv Acknowledgements xix PART ONE Foundations of Management Accounting 1 Chapter 1 Why Management Accounting Matters 3 Chapter 2 Cost Concepts and Classifications 27 Chapter 3 Cost Estimation and Regression Analysis 57 PART TWO Costing Chapter 4 Traditional Product-Costing Methods: Job-Order Costing Chapter 5 Traditional Product-Costing Methods: Process Costing Chapter 6 Activity-Based Costing Chapter 7 Inventory-Valuation Approaches: Absorption Costing and Variable Costing PART THREE Decision Making Chapter 8 Cost-Volume-Profit Analysis Chapter 9 Relevant Costs and Revenues for Short-Term Decision Making PART FOUR Performance Management Chapter 10 Performance Management Theoretical Aspects Chapter 11 Master Budgeting Basic Quantitative Issues Chapter 12 Basic Variance Analysis References and Further Reading Frequently Used Symbols

2 ix Contents Preface... xv Acknowledgements... xix PART ONE Foundations of Management Accounting... 1 Chapter One Why Management Accounting Matters What is Management Accounting? Defining Management Accounting Comparing Management Accounting and Financial Accounting Why Study Management Accounting? Management Accounting Practice Today The Business Context of Management Accounting The Principles of Management Accounting Appendix 1A: Brief History of Management Accounting Appendix 1B: Management Accounting and the Professional Qualifications Appendix 1C: Institute of Management Accountants (IMA) Statement of Ethical Professional Practice Chapter Two Cost Concepts and Classifications Costs versus Expenses Cost Concepts Cost Pool and Cost Object Cost Accumulation and Cost Assignment Cost Classification for Cost Assignment Direct Costs and Indirect Costs Relativity of Direct/Indirect Cost Classifications Cost Classifications by Business Functions Manufacturing Costs and Nonmanufacturing Costs Prime Costs and Conversion Costs Cost Classification for Inventory Valuation and Profit Measurement Product Costs and Period Costs Product Cost Flows and Period Cost Flows in Manufacturing Settings Product Cost Flows and Period Cost Flows in Nonmanufacturing Settings Integrated Summary of Product Costs and Period Costs Cost Classification for Planning Variable Costs Fixed Costs Mixed Costs The Problem with Unit Costs Relationships Between Cost Classifications Cost Classification for Decision Making Relevant Costs Sunk Costs... 48

3 x 7.3. Opportunity Costs Cost Classification for Management Control Controllable Costs Noncontrollable Costs Accounting for Costs: Three Key Purposes Ethical Issues in Cost Classification Appendix 2A: Variable Costs and Fixed Costs in Practice Chapter Three Cost Estimation and Regression Analysis Cost Behavior Patterns and Cost Estimation The Cost Driver Concept General Assumptions in Cost Estimation Non-Statistical Cost Estimation Methods Engineering Method Account Analysis Method Scattergraph Method High-Low Method Statistical Regression Analysis in Cost Estimation Simple Linear Regression (Least-Squares Technique) Coefficient of Determination and Coefficient of Correlation Standard Error of the Estimate and Confidence Intervals Multiple Regression Practical Issues in Performing Regression Analyses Integrated Summary of Cost Estimation Methods Ethical Issues in Cost Estimation Appendix 3A: Regression Analysis Using Microsoft Excel Appendix 3B: Partial Table of the t Distribution PART TWO Costing Chapter Four Traditional Product-Costing Methods: Job-Order Costing Introduction to Product Costing: Three Key Questions Fundamentals of Job-Order Costing The Overhead Rate Concept General Approach to Job-Order Costing Using Predetermined Costs Job-Order Coting Illustrated Overapplied and Underapplied Overhead Methods of Disposing Overapplied or Underapplied Overhead Job-Order Costing in Multiple Departments Job-Order Costing in Nonmanufacturing Settings Spoilage and Rework in Job-Order Costing Ethical Issues in Job-Order Costing Appendix 4A: Journal Entries in Job-Order Costing Appendix 4B: Job-Order Costing Using Actual Costs

4 xi Chapter Five Traditional Product-Costing Methods: Process Costing Fundamentals of Process Costing The Equivalent Unit Concept General Approach to Process Costing Using Actual Costs Process Costing in the Initial Department Weighted-Average Method First-In, First-Out (FIFO) Method Comparing the Weighted-Average and FIFO Methods Process Costing in Subsequent Departments Weighted-Average Method and Transferred-In Costs FIFO Method and Transferred-In Costs Spoilage in Process Costing Weighted-Average Method and Spoilage FIFO Method and Spoilage Hybrid-Costing Systems Ethical Issues in Process Costing Appendix 5A: Journal Entries in Process Costing Appendix 5B: Process Costing Using Predetermined Costs Appendix 5C: Operation Costing Chapter Six Activity-Based Costing Problems with the Traditional Costing Methods Fundamentals of Activity-Based Costing (ABC) ABC-Related Concepts Activity Activity Cost Pool Activity Cost Driver (or Cost-Allocation Base) Cost Hierarchy General Approach to Activity-Based Costing Comparison of Traditional and Activity-Based Costing Systems Advantages and Disadvantages of ABC systems Application of ABC systems Ethical Issues in Activity-Based Costing Appendix 6A: Journal Entries in Activity-Based Costing Appendix 6B: Time-Driven Activity-Based Costing Appendix 6C: Activity-Based Management Chapter Seven Inventory-Valuation Approaches: Absorption Costing and Variable Costing Introduction to Absorption and Variable Costing Two Conceptual Formats of Income Statement The Function-of-Expense Format Income Statement (Absorption Costing Presentation) The Contribution-Margin Format Income Statement (Variable Costing Presentation) General Approach to Absorption and Variable Costing Using Actual Costs

5 xii 3.1. Absorption Costing Variable Costing Comparing Absorption and Variable Costing General Approach to Absorption and Variable Costing Using Predetermined Costs Absorption Costing Variable Costing Comparing Absorption and Variable Costing Advantages and Disadvantages of Absorption and Variable Costing Application of Absorption and Variable Costing Ethical Issues in Absorption and Variable Costing Appendix 7A: Throughput Costing Appendix 7B: Allocating Actual Fixed Manufacturing Overheads for External-Reporting Purposes: The Requirements of IAS 2 Inventories Appendix 7C: Allocating Budgeted Fixed Manufacturing Overheads for Internal-Reporting Purposes: Predetermined Rates and Capacity Concepts PART THREE Decision Making Chapter Eight Cost-Volume-Profit Analysis Fundamentals of Cost-Volume-Profit Analysis The Contribution Margin Concept CVP Analysis and Break-Even Point Analytical Method Graph Method CVP Analysis and Return Target Operating Income Scenario Analysis CVP Analysis and Operating Risk Margin of Safety Operating Leverage Sensitivity Analysis Multi-Product CVP Analysis Analytical Method Graph Method Assumptions in CVP Analysis Ethical Issues in CVP Analysis Appendix 8A: Operating Leverage, Financial Leverage, and Total Leverage Chapter Nine Relevant Costs and Revenues for Short-Term Decision Making Fundamentals of Short-Term Decision Making Two Conceptual Approaches in Short-Term Decision Making The Relevant-Information Approach The Contribution-Margin Approach General Model of Short-Term Decision Making Adding/Dropping Operating Segments

6 xiii 4.1. Essence and Application Relevant Costs and Revenues. Capacity Considerations Additional Considerations Make-or-Buy Decisions Essence and Application Relevant Costs and Capacity Considerations Additional Considerations Pricing One-Time-Only Special Orders Essence and Application Relevant Costs and Revenues. Capacity Considerations Additional Considerations Ethical Issues in Short-Term Decision Making Appendix 9A: The Relevant Costs of Direct Materials and Direct Labor Appendix 9B: Pricing Decisions in the Long-Run PART FOUR Performance Management Chapter Ten Performance Management Theoretical Issues Fundamentals of Budgeting Budgeting and the Overall Planning Process Functions of Budgeting. Advantages and Disadvantages An Administrative Framework for Budgeting Budget Committee and Budget Manual Budget Period Top-Down vs. Bottom-Up Budget Setting Stages of the Budgeting Process Sources of Information in Budgeting Approaches to Budgeting Incremental Budgeting Zero-Based Budgeting Rolling Budgets Kaizen Budgeting Fundamentals of Performance Management Defining Performance Management Feedback and Feed-Forward Controls Elements of Performance Management Systems Formal Planning Process Decentralization and Responsibility Accounting Performance Measurement and Performance Evaluation Compensation and Reward Informal Control System Human Challenges and Ethical Issues in Performance Management Appendix 10A: Contemporary Approaches to Budgeting Chapter Eleven Mater Budgeting Basic Quantitative Issues The Master Budget Concept Two Bases of Accounting in Developing the Master Budget

7 xiv 2.1. Accrual Accounting Cash-Basis Accounting Developing the Master Budget The Sales Budget The Production Budget The Direct Materials Purchases Budget and Direct Materials Usage Budget The Direct Labor Budget The Manufacturing Overhead Budget The Cost of Goods Manufactured and Sold Budget The Selling and Administrative Expenses Budget The Budgeted Income Statement The Cash Budget The Budgeted Balance Sheet Budgeting in Nonmanufacturing Settings Budgeting under Uncertainty Sensitivity Analysis Scenario Analysis Ethical Issues in Master Budgeting Appendix 11A: Methods of Sales Forecasting Chapter Twelve Basic Variance Analysis Introduction to Variance Analysis The Flexible Budget Concept The Standard Costs Concept General Approach to Cost Variance Analysis Direct Materials Variances Materials Usage Variance Materials Price Variance Direct Labor Variances Labor Efficiency Variance Labor Rate Variance Variable Manufacturing Overhead Variances Variable Overhead Efficiency Variance Variable Overhead Rate Variance Fixed Manufacturing Overhead Variances Fixed Overhead Spending Variance Production-Volume Variance Integrated Variance Analysis Integrated Summary of Cost Variance Analysis Variance Reports Interdependencies among Variances Insufficiency of Variance Analysis Ethical Issues in Variance Analysis Appendix 12A: Effects of Inventories on Variance Analysis Appendix 12B: Types of Standards References and Further Reading Frequently Used Symbols