Introduction to management accounting / 11th ed.

Preface p. xxi
Focus on Decision Making
Managerial Accounting and the Business Organization p. 2
Chapter Opener: The Marmon Group, Inc. p. 3
Accounting and Decision Making p. 4
Management Accounting in Service and Nonprofit Organizations p. 8
Cost-Benefit and Behavioral Considerations p. 9
The Management Process and Accounting p. 9
Planning and Control for Product Life Cycles and the Value Chain p. 12
Accounting's Position in the Organization p. 16
Career Opportunities in Managerial Accounting p. 20
Adaptation to Change p. 21
Importance of Ethical Conduct p. 23
Ethics at General Motors p. 25
Highlights to Remember p. 26
Accounting Vocabulary p. 27
Fundamental Assignment Material p. 28
Additional Assignment Material p. 30
Business First p. 34
Collaborative Learning Exercise p. 36
Introduction to Cost Behavior and Cost-Volume Relationships p. 38
Chapter Opener: Boeing Company p. 39
Activities, Costs, and Cost Drivers p. 40
Comparison of Variable and Fixed Costs p. 41
Cost-Volume-Profit Analysis p. 44
Break-Even in the Auto Industry p. 46
Additional Uses of Cost-Volume Analysis p. 54
Lowering the Break-Even Point p. 56
Nonprofit Application p. 56
Highlights to Remember p. 58
Sales-Mix Analysis p. 59
Impact of Income Taxes p. 60
Accounting Vocabulary p. 61
Fundamental Assignment Material p. 62
Additional Assignment Material p. 64
Business First p. 73
Collaborative Learning Exercise p. 78
Measurement of Cost Behavior p. 80
Chapter Opener: America West p. 81
Cost Drivers and Cost Behavior p. 82
Management Influence on Cost Behavior p. 85
Cost Functions p. 87
Activity Analysis at Hughes Aircraft Company p. 90
Methods of Measuring Cost Functions p. 91
Highlights to Remember p. 100
Measuring Cost Behavior at Hewlett-Packard p. 100
Use and Interpretation of Least-Squared Regression p. 101
Accounting Vocabulary p. 105
Fundamental Assignment Material p. 105
Additional Assignment Material p. 107
Business First p. 113
Collaborative Learning Exercise p. 120
Cost Management Systems and Activity-Based Costing p. 122
Chapter Opener: ATandT p. 123
Classifications of Costs p. 125
Cost Accounting for Financial Reporting p. 128
Cost Behavior and Income Statements p. 132
Activity-Based Costing p. 136
Contribution Approach and Activity-Based Costing p. 137
Illustration of Activity-Based Costing p. 137
Cost-Management Systems p. 144
Identifying Activities, Resources, and Cost Drivers in the Health Care Industry p. 145
Highlights to Remember p. 147
Accounting Vocabulary p. 148
Fundamental Assignment Material p. 148
Additional Assignment Material p. 151
Business First p. 162
Collaborative Learning Exercise p. 162
Relevant Information and Decision Making: Marketing Decisions p. 164
Chapter Opener: The Grand Canyon Railway p. 165
The Concept of Relevance p. 166
The Special Sales Order p. 169
Deletion or Addition of Products, Services, or Departments p. 173
Optimal Use of Limited Resources p. 176
Pricing Decisions p. 177
General Influences on Pricing in Practice p. 180
Role of Costs in Pricing Decisions p. 181
Target Costing p. 186
Target Costing, ABC, and Service Companies p. 189
Highlights to Remember p. 191
Accounting Vocabulary p. 192
Fundamental Assignment Material p. 192
Additional Assignment Material p. 196
Business First p. 203
Collaborative Learning Exercise p. 211
Relevant Information and Decision Making: Production Decisions p. 212
Chapter Opener: Starbucks Coffee Company p. 213
Opportunity, Outlay, and Differential Costs p. 214
Make-or-Buy Decisions p. 216
Joint Product Costs p. 218
An Example of Make-or-Buy: Outsourcing p. 218
Irrelevance of Past Costs p. 220
Sunk Costs and Government Contracts p. 223
Irrelevance of Future Costs That Will Not Differ p. 223
Beware of Unit Costs p. 224
Conflicts Between Decision Making and Performance Evaluation p. 224
Highlights to Remember p. 228
Accounting Vocabulary p. 228
Fundamental Assignment Material p. 229
Additional Assignment Material p. 232
Business First p. 244
Collaborative Learning Exercise p. 246
Accounting for Planning and Control
The Master Budget p. 248
Chapter Opener: Ritz-Carlton p. 249
Budgets and the Organization p. 250
Preparing the Master Budget p. 254
Photon Sees the Light p. 255
The Budgeting Process at Daihatsu p. 261
Difficulties of Sales Forecasting p. 262
Getting Employees to Accept the Budget p. 263
Financial Planning Models p. 264
Activity-Based Budgeting p. 264
Highlights to Remember p. 268
Use of Spreadsheets for Budgeting p. 269
Accounting Vocabulary p. 272
Fundamental Assignment Material p. 272
Additional Assignment Material p. 274
Business First p. 279
Collaborative Learning Exercise p. 285
Flexible Budgets and Variance Analysis p. 286
Chapter Opener: McDonalds p. 287
Flexible Budgets: Bridge Between Static Budgets and Actual Results p. 288
Isolating the Causes of Variances p. 293
Caterpillar Tracks Multiple Cost Systems Through Master Budget p. 296
Flexible-Budget Variances in Detail p. 299
Overhead Variances p. 303
General Approach p. 303
Highlights to Remember p. 305
Accounting Vocabulary p. 308
Fundamental Assignment Material p. 308
Additional Assignment Material p. 311
Business First p. 315
Collaborative Learning Exercise p. 323
Management Control Systems and Responsibility Accounting p. 326
Chapter Opener: Foundation Health Systems, Inc. p. 327
Management Control Systems p. 328
Designing Management Control Systems p. 330
Controllability and Measurement of Financial Performance p. 336
Nonfinancial Measures of Performance p. 339
Poor Quality Nearly Short-Circuits Electronics Company p. 340
Measuring the Cost of Quality p. 343
Nissan Captures Top Productivity Rating 4 Years Running p. 345
Management Control Systems, Service, Government, and Nonprofit Organizations p. 346
Future of Management Control Systems p. 347
Highlights to Remember p. 348
Accounting Vocabulary p. 350
Fundamental Assignment Material p. 350
Additional Assignment Material p. 354
Business First p. 356
Collaborative Learning Exercise p. 362
Management Control in Decentralized Organizations p. 364
Chapter Opener: Nike p. 365
Centralization Versus Decentralization p. 366
Decentralization in the 1990's p. 367
Transfer Pricing p. 368
Activity-Based Costing and Transfer Pricing p. 370
Performance Measures and Management Control p. 375
Measures and Profitability p. 378
A Closer Look at Invested Capital p. 382
Keys to Successful Management Control Systems p. 385
Highlights to Remember p. 386
Accounting Vocabulary p. 388
Fundamental Assignment Material p. 388
Additional Assignment Material p. 392
Business First p. 399
Collaborative Learning Exercise p. 402
Capital Budgeting
Capital Budgeting p. 404
Chapter Opener: Deer Valley Lodge p. 405
Capital Budgeting for Programs or Projects p. 406
Discounted-Cash-Flow Models p. 406
Sensitivity Analysis and Risk Assessment in DCF Models p. 410
The NPV Comparison of Two Projects p. 411
Income Taxes and Capital Budgeting p. 415
Confusion About Depreciation p. 423
Capital Budgeting and Inflation p. 423
Other Models for Analyzing Long-Range Decisions p. 426
Performance Evaluation p. 428
Highlights to Remember p. 429
Accounting Vocabulary p. 430
Fundamental Assignment Material p. 430
Additional Assignment Material p. 434
Business First p. 445
Collaborative Learning Exercises p. 449
Solutions to Exercise in Compound Interest, Problem 11-A1 p. 450
Product Costing
Cost Allocation and Activity-Based Costing p. 452
Chapter Opener: Dell Computer Corporation p. 453
Cost Allocation in General p. 454
Allocation of Service Department Costs p. 456
Allocation of Costs to Final Cost Objects p. 463
Activity-Based Costing p. 464
Activity-Based Costing at Hewlett-Packard p. 473
Allocation of Joint Costs and By-Product Costs p. 474
Highlights to Remember p. 478
Accounting Vocabulary p. 479
Fundamental Assignment Material p. 479
Additional Assignment Material p. 483
Business First p. 490
Collaborative Learning Exercise p. 496
Job-Costing Systems p. 498
Chapter Opener: Dell Computer Corporation p. 499
Distinction Between Job Costing and Process Costing p. 500
Illustration of Job Costing p. 501
Accounting for Factory Overhead p. 504
Illustration of Overhead Application p. 505
Simplifying Product Costing at Harley-Davidson p. 506
Problems of Overhead Application p. 508
Activity-Based Costing/Management in a Job-Costing Environment p. 511
Product Costing in Service and Nonprofit Organizations p. 513
Highlights to Remember p. 516
Accounting Vocabulary p. 517
Fundamental Assignment Material p. 517
Additional Assignment Material p. 520
Business First p. 525
Collaborative Learning Exercise p. 533
Process-Costing Systems p. 534
Chapter Opener: Nally and Gibson Georgetown, Inc. p. 535
Process Costing Basics p. 536
Application of Process Costing p. 539
Physical Units and Equivalent Units (Steps 1 and 2) p. 540
Calculation of Product Costs (Steps 3 to 5) p. 541
Effects of Beginning Inventories p. 543
Weighted-Average Method p. 544
First-In, First-Out Method p. 544
Process Costing in a JIT System: Backflush Costing p. 549
Highlights to Remember p. 552
Hybrid Systems-Operation Costing p. 553
Accounting Vocabulary p. 555
Fundamental Assignment Material p. 555
Additional Assignment Material p. 558
Business First p. 562
Collaborative Learning Exercise p. 566
Overhead Application: Variable and Absorption Costing p. 568
Chapter Opener: L.A. Darling Store Fixtures p. 569
Variable Versus Absorption Costing p. 570
Variable Costing at Northern Telecom p. 575
Fixed Overhead and Absorption Costs of Product p. 575
Effect of Other Variances p. 582
Highlights to Remember p. 586
Comparisons of Production-Volume Variance with Other Variances p. 587
Accounting Vocabulary p. 589
Fundamental Assignment Material p. 589
Additional Assignment Material p. 591
Business First p. 598
Collaborative Learning Exercises p. 606
Basic Financial Accounting
Basic Accounting: Concepts, Techniques, and Conventions p. 610
Chapter Opener: Lands' End p. 611
The Need for Accounting p. 612
Financial Statements p. 612
Accrual Basis and Cash Basis p. 617
Adjustments to the Accounts p. 618
Expiration of Unexpired Costs p. 619
Recognition (Earning) of Unearned Revenues p. 621
Accrual of Unrecorded Expenses p. 623
Accrual of Unrecorded Revenues p. 625
Dividends and Retained Income p. 625
Preparing Financial Statements p. 627
Sole Proprietorships and Partnerships p. 628
Generally Accepted Accounting Principles p. 629
Three Measurement Conventions p. 631
Highlights to Remember p. 634
Additional Accounting Concepts p. 634
Using Ledger Accounts p. 637
Accounting Vocabulary p. 640
Assignment Material p. 640
Fundamental Assignment Material p. 641
Additional Assignment Material p. 643
Business First p. 649
Collaborative Learning Exercise p. 650
Understanding Corporate Annual Reports: Basic Financial Statements p. 652
Chapter Opener: Intel Corporation p. 653
Classified Balance Sheet p. 654
Income Statement p. 663
Statement of Retained Earnings p. 664
Statement of Cash Flows p. 665
Preparation of a Statement of Cash Flows: The Direct Method p. 668
Preparation of a Statement of Cash Flows: The Indirect Method p. 672
Highlights to Remember p. 679
Shareholder Reporting, Income Tax Reporting, and Deferred Taxes p. 680
Accounting Vocabulary p. 682
Fundamental Assignment Material p. 682
Business First p. 683
Additional Assignment Material p. 685
Collaborative Learning Exercise p. 695
More on Understanding Corporate Annual Reports p. 696
Chapter Opener: General Motors (GM) p. 697
Intercorporate Investments Including Consolidations p. 698
Market and Equity Methods p. 698
Consolidated Financial Statements p. 699
Highlights to Remember: Part One p. 710
Accounting Vocabulary: Part One p. 710
Analysis of Financial Statements p. 710
Uses of Ratios p. 713
Efficient Markets and Investor Decisions p. 717
Highlights to Remember: Part Two p. 719
Accounting Vocabulary: Part Two p. 720
Fundamental Assignment Material p. 720
Additional Assignment Material p. 725
Business First p. 731
Collaborative Learning Exercise p. 734
Difficulties in Measuring Net Income p. 736
Chapter Opener: Home Depot p. 737
Principal Inventory Methods p. 738
Four Major Inventory Methods p. 738
Lower of Cost or Market p. 743
Highlights to Remember: Part One p. 744
Accounting Vocabulary: Part One p. 745
Changing Prices and Income Measurement p. 745
Income or Capital p. 746
Measurement Alternatives Under Inflation p. 746
Historical Cost/Nominal Dollars p. 747
Highlights to Remember: Part Two p. 752
Accounting Vocabulary: Part Two p. 753
Fundamental Assignment Material p. 753
Additional Assignment Material p. 755
Business First Case p. 760
Collaborative Learning Exercise p. 762
Appendix A p. A1
Appendix B p. A7
Glossary p. G1
Index p. I1