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Cost Accounting: A Managerial Emphasis

by: Horngren, Charles T; Datar, Srikant M; Foster, George M

Cost Accounting: A Managerial Emphasis

by: Horngren, Charles T; Datar, Srikant M; Foster, George M

ISBN 13:
9780131495388
ISBN 10:
0131495380
Edition: 12th
Format: Paperback
Copyright: 01/01/2009
Publisher: Prentice Hall
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Summary

Horngrenrs"sCost Accountingdefined the cost accounting market and continues to innovate today by consistently integrating the most current practice and theory. This acclaimed, number one market-leading book embraces the basic theme of "different costs for different purposes." It reaches beyond cost accounting procedures to consider concepts, analyses, and management. This latest edition ofCost Accountingincorporates the latest research and most up-to-date thinking into all relevant chapters.Professional issues related to Management Accounting and Management Accountants are emphasized. Chapter topics cover the accountant's role in the organization to performance measurement, compensation, and multinational considerations.For future accountants who want to enhance their understanding ofand ability tosolve cost accounting problems.

Part One Cost Accounting Fundamentals

(179)

The Accountant's Role in the Organization

(25)

Management Accounting, Financial Accounting, and Cost Accounting

(1)

Strategic Decisions and the Management Accountant

(1)

The Management Accountant's Role in Implementing Strategy

(3)

Value-Chain Analysis

(1)

Supply-Chain Analysis

(1)

Key Success Factors

(1)

Planning and Control Systems

(1)

Feedback: Linking Planning and Control

(1)

Concepts in Action: E-Business Strategies and the Management Accountant

(3)

An Example: Planning and Control and the Management Accountant

(1)

Problem-Solving, Scorekeeping, and Attention-Directing Roles

(1)

Key Management Accounting Guidelines

(1)

Cost-Benefit Approach

(1)

Behavioral and Technical Considerations

(1)

Global Surveys of Company Practice: Today's Management Accountant

(1)

Different Costs for Different Purposes

(1)

Organization Structure and the Management Accountant

(2)

Line and Staff Relationships

(1)

The Chief Financial Officer and the Controller

(2)

Focus on Values and Behaviors: Management Accounting Beyond the Numbers

(1)

Professional Ethics

(11)

Ethical Guidelines

(1)

Typical Ethical Challenges

(1)

Problem for Self-Study

(1)

Decision Points

(1)

Terms to Learn

(1)

Assignment Material

(5)

Video Case: Regal Marine

(2)

An Introduction to Cost Terms and Purposes

(34)

Costs and Cost Terminology

(1)

Direct Costs and Indirect Costs

(2)

Cost Tracing and Cost Allocation

(2)

Focus on Values and Behaviors: Overcharging the U.S. Government

(1)

Factors Affecting Direct/Indirect Cost Classifications

(1)

Cost-Behavior Patterns: Variable Costs and Fixed Costs

(1)

Global Surveys of Company Practice: Distinguishing Between Variable Costs and Fixed Costs

(2)

Cost Drivers

(1)

Concepts in Action: How Application Service Providers (ASPs) Influence Cost Structures

(1)

Relevant Range

(1)

Relationships of Types of Costs

(1)

Total Costs and Unit Costs

(2)

Unit Costs

(2)

Use Unit Costs Cautiously

(1)

Manufacturing-, Merchandising-, and Service-Sector Companies

(1)

Financial Statements, Inventoriable Costs, and Period Costs

(2)

Types of Inventory

(1)

Commonly Used Classifications of Manufacturing Costs

(1)

Inventoriable Costs

(1)

Period Costs

(1)

Illustrating the Flow of Inventoriable Costs and Period Costs

(4)

Manufacturing-Sector Example

(2)

Recap of Inventoriable Costs and Period Costs

(2)

Prime Costs and Conversion Costs

(1)

Measuring Costs Requires Judgment

(4)

Measuring Labor Costs

(1)

Overtime Premium and Idle Time

(1)

Benefits of Defining Accounting Terms

(1)

Different Meanings of Product Costs

(2)

A Framework For Cost Accounting and Cost Management

(14)

Problem for Self-Study

(2)

Decision Points

(1)

Terms to Learn

(1)

Assignment Material

(8)

Video Case: Three Dog Bakery

(2)

Cost-Volume-Profit Analysis

(37)

Cost-Volume-Profit Assumptions and Terminology

(1)

Essentials of CVP Analysis

(3)

Equation Method

(1)

Contribution Margin Method

(1)

Graph Method

(1)

Breakeven Point and Target Operating Income

(3)

Target Operating Income

(1)

Target Net Income and Income Taxes

(1)

Using CVP Analysis for Decision Making

(1)

Decision to Advertise

(1)

Decision to Reduce Selling Price

(1)

Sensitivity Analysis and Uncertainty

(2)

Cost Planning and CVP

(3)

Alternative Fixed-Cost/Variable-Cost Structures

(1)

Operating Leverage

(2)

Focus on Values and Behaviors: Worldcom: Simply a Matter of Poor Planning?

(1)

Effects of Sales Mix on Income

(1)

Concepts in Action: Influencing Cost Structures to Manage the Risk-Return Trade-Off at Amaxon.com

(2)

Multiple Cost Drivers

(1)

CVP Analysis in Service and Nonprofit Organizations

(1)

Contribution Margin Versus Gross Margin

(3)

Merchandising Sector

(1)

Manufacturing Sector

(1)

Problem for Self-Study

(1)

Decision Points

(1)

Appendix: Decision Models and Uncertainty

(16)

Terms to Learn

(1)

Assignment Material

(11)

Video Case: Store 24

(2)

Job Costing

(41)

Building-Block Concepts of Costing Systems

(1)

Job-Costing and Process-Costing Systems

(1)

Actual Costing in Manufacturing

100

(3)

General Approach to Job Costing

101

(2)

Global Surveys of Company Practice: Cost-Allocation Bases Used for Manufacturing Overhead

103

(3)

The Role of Technology

105

(1)

Concepts in Action: Job Costing on the Joint Strike Fighter Project

106

(1)

Time Period Used to Compute Indirect-Cost Rates

106

(1)

Focus on Values and Behaviors: Enron's Catastrophic Mistakes

107

(1)

Normal Costing

108

(1)

A Normal Job-Costing System in Manufacturing

109

(9)

General Ledger and Subsidiary Ledgers

109

(2)

Explanations of Transactions

111

(7)

Nonmanufacturing Costs and Job Costing

118

(1)

Budgeted Indirect Costs and End-of-Accounting-Year Adjustments

118

(4)

Adjusted Allocation-Rate Approach

119

(1)

Proration Approach

119

(2)

Write-Off to Cost of Goods Sold Approach

121

(1)

Choice Among Approaches

121

(1)

Multiple Overhead Costs Pools

122

(1)

Variations From Normal Costing: A Service-Sector Example

122

(16)

Problem for Self-Study

123

(2)

Decision Points

125

(1)

Terms to Learn

126

(1)

Assignment Material

126

(11)

Video Case: Wheeled Coach

137

(1)

Activity-Based Costing and Activity-Based Management

138

(42)

Broad Averaging and Its Consequences

139

(1)

Undercosting and Overcosting

139

(1)

Product-Cost Cross-Subsidization

140

(1)

Simple Costing System at Plastim Corporation

140

(3)

Design, Manufacturing, and Distribution Processes

140

(1)

Simple Costing System Using a Single Indirect-Cost Pool

141

(2)

Refining a Costing System

143

(1)

Activity-Based Costing Systems

144

(4)

Plastim's ABC System

145

(2)

Cost Hierarchies

147

(1)

Implementing Activity-Based Costing at Plastim

148

(4)

Comparing Alternative Costing Systems

152

(1)

Using ABC Systems for Improving Cost Management and Profitability

152

(3)

Activity-Based Costing and Department-Costing Systems

155

(1)

Implementing ABC systems

156

(1)

ABC in Service and Merchandising Companies

157

(1)

Global Surveys of Company Practice: Varying Interest in Activity-Based Costing

158

(1)

Focus on Values and Behaviors: Successfully Championing ABC

159

(1)

Concepts in Action: Analyzing and Managing Multichannel Banking with Activity-Based Costing

160

(20)

Problem for Self-Study

161

(2)

Decision Points

163

(1)

Terms to Learn

164

(1)

Assignment Material

164

(15)

Case: Activity-Based Costing: Columbo Frozen Yogurt

179

(1)

Part Two Tools for Planning and Control

180

(152)

Master Budget and Responsibility Accounting

180

(41)

Budgets and the Budgeting Cycle

181

(1)

Strategic Plans and Operating Plans

181

(1)

Budgeting Cycle and Master Budget

182

(1)

Advantages of Budgets

182

(2)

Coordination and Communication

182

(1)

Framework for Judging Performance

183

(1)

Motivating Managers and Other Employees

183

(1)

Challenges in Administering Budgets

183

(1)

Time Coverage of Budgets

184

(1)

Steps in Developing an Operating Budget

184

(1)

Global Surveys of Company Practice: Budget Practices Around the Globe

185

(8)

Computer-Based Financial Planning Models

193

(1)

Concepts in Action: Web-Enabled Budgeting and Hendrick Motorsports

194

(1)

Kaizen Budgeting

195

(1)

Activity-Based Budgeting

196

(1)

Budgeting and Responsibility Accounting

197

(1)

Organization Structure and Responsibility

197

(1)

Feedback

198

(1)

Responsibility and Controllability

198

(1)

Human Aspects of Budgeting

199

(1)

Budgeting in Multinational Companies

200

(1)

Focus on Values and Behaviors: Management Accountants: The Heart of the Budgeting Process

201

(2)

Problem for Self-Study

202

(1)

Decision Points

203

(1)

Appendix: The Cash Budget

203

(18)

Terms to Learn

207

(1)

Assignment Material

208

(12)

Video Case: Ritz-Carlton Hotels

220

(1)

Flexible Budgets, Direct-Cost Variances, and Management Control

221

(35)

The Use of Variances

222

(1)

Static Budgets and Static-Budget Variances

222

(2)

Flexible Budgets

224

(1)

Flexible-Budget Variances and Sales-Volume Variances

225

(2)

Sales-Volume Variances

225

(1)

Flexible-Budget Variances

226

(1)

Price Variances and Efficiency Variances For Direct-Cost Inputs

227

(2)

Obtaining Budgeted Input Prices and Budgeted Input Quantities

227

(2)

Global Surveys of Company Practice: The Widespread Use of Standard Costs

229

(3)

Data for Calculating Webb's Price Variances and Efficiency Variances

229

(1)

Price Variances

230

(1)

Efficiency Variance

231

(1)

Concepts in Action: Weapons Against Waste: Variance Analysis at Sandox

232

(3)

Summary of Variances

233

(1)

Journal Entries Using Standard Costs

234

(1)

Implementing Standard Costing

235

(1)

Standard Costing and Information Technology

235

(1)

Wide Applicability of Standard Costing

235

(1)

Management Uses of Variances

236

(2)

Multiple Causes of Variances

236

(1)

When to Investigate Variances

236

(1)

Performance Measurement Using Variances

236

(1)

Organization Learning

237

(1)

Continuous Improvement

237

(1)

Focus on Values and Behaviors: Starbucks, McDonald's, and Johnson & Johnson: Making Good Use of Variances

238

(1)

Financial and Nonfinancial Performance Measures

238

(1)

Variance Analysis and Activity-Based Costing

239

(2)

Relating Batch Costs to Product Output

239

(1)

Price and Efficiency Variances

240

(1)

Focus on Hierarchy

240

(1)

Benchmarking and Variance Analysis

241

(15)

Problem for Self-Study

242

(1)

Decision Points

243

(1)

Terms to Learn

244

(1)

Assignment Material

244

(11)

Case: Management Control at Starbucks

255

(1)

Flexible Budgets, Overhead Cost Variances, and Management Control

256

(38)

Planning of Variable and Fixed Overhead Costs

257

(1)

Planning Variable Overhead Costs

257

(1)

Planning Fixed Overhead Costs

257

(1)

Standard Costing at Webb Company

257

(1)

Developing Budgeted Variable Overhead Cost Rates

258

(1)

Variable Overhead Cost Variances

259

(4)

Flexible-Budget Analysis

259

(1)

Variable Overhead Efficiency Variance

260

(1)

Variable Overhead Spending Variance

261

(2)

Journal Entries for Variable Manufacturing Overhead Costs and Variances

263

(1)

Developing Budgeted Fixed Overhead Rates

263

(1)

Fixed Overhead Cost Variances

264

(1)

Production-Volume Variance

265

(3)

Computing the Production-Volume Variance

266

(1)

Interpreting the Production-Volume Variance

267

(1)

Journal Entries for Fixed Manufacturing Overhead Costs and Variances

268

(1)

Concepts in Action: Variance Analysis and Standard Costing: Helping Sandoz Manage Overhead Costs

269

(1)

Focus on Values and Behaviors: The Challenges of Overhead Variances

270

(1)

Integrated Analysis of Overhead Cost Variances

271

(2)

4-, 3-, 2-, and 1-Variance Analysis

271

(2)

Production-Volume Variance and Sales-Volume Variance

273

(1)

Global Surveys of Company Practice: Variance Analysis and Control Decisions

274

(1)

Financial and Nonfinancial Performance Measures

275

(1)

Overhead Cost Variances in Nonmanufacturing and Service Settings

276

(1)

Activity-Based Costing and Variance Analysis

276

(18)

Flexible Budget and Variance Analysis for Variable Setup Overhead Costs

277

(2)

Flexible Budget and Variance Analysis for Fixed Setup Overhead Costs

279

(1)

Problem for Self-Study

280

(2)

Decision Points

282

(1)

Terms to Learn

283

(1)

Assignment Material

283

(9)

Case: Teva Sport Sandals

292

(2)

Inventory Costing and Capacity Analysis

294

(38)

Part One: Inventory Costing for Manufacturing Companies

295

(1)

Variable Costing and Absorption Costing

295

(3)

Data for Stassen Company for 2006

295

(2)

Comparing Income Statements over One Year

297

(1)

Explaining Differences in Operating Income

298

(4)

Data for Stassen Company for 2006, 2007, and 2008

298

(1)

Comparing Income Statements over Three Years

299

(2)

Effect of Sales and Production on Operating Income

301

(1)

Performance Measures and Absorption Costing

302

(1)

Undesirable Buildup of Inventories

303

(1)

Focus on Values and Behaviors: Bristol-Myers-Squibb's Questionable Inventory Strategy

303

(1)

Global Surveys of Company Practice: Usage of Variable Costing and Absorption Costing by Companies

304

(1)

Proposals for Revising Performance Evaluation

304

(1)

Throughput Costing

305

(1)

Concepts in Action: Yield Improvements and the Production-Volume Variance at Analog Devices

306

(1)

Comparison of Alternative Inventory-Costing Methods

307

(1)

Problem for Self-Study

308

(1)

Part Two: Denominator-Level Capacity Concepts and Fixed-Cost Capacity Analysis

309

(1)

Alternative Denominator-Level Capacity Concepts for Absorption Costing

309

(2)

Theoretical Capacity and Practical Capacity

309

(1)

Normal Capacity Utilization and Master-Budget Capacity Utilization

310

(1)

Effect on Budgeted Fixed Manufacturing Cost Rate

310

(1)

Choosing a Capacity Level

311

(6)

Product Costing and Capacity Management

311

(1)

Pricing Decisions and the Downward Demand Spiral

312

(1)

Performance Evaluation

313

(1)

External Reporting

314

(2)

Regulatory Requirements

316

(1)

Difficulties in Forecasting Chosen Denominator-Level Concept

316

(1)

Capacity Costs and Denominator-Level Issues

317

(2)

Problem for Self-Study

318

(1)

Decision Points

318

(1)

Appendix: Breakeven Points in Variable Costing and Absorption Costing

319

(13)

Terms to Learn

320

(1)

Assignment Material

320

(11)

Video Case: Cavco Industries

331

(1)

Part Three Cost Information for Decisions

332

(123)

Determining How Costs Behave

332

(46)

General Issues in Estimating Cost Functions

333

(3)

Basic Assumptions and Examples of Cost Functions

333

(2)

Brief Review of Cost Classification

335

(1)

Cost Estimation

336

(1)

The Cause-and-Effect Criterion in Choosing Cost Drivers

336

(1)

Cost Estimation Methods

336

(1)

Global Surveys of Company Practice: International Comparison of Cost Classification by Companies

337

(1)

Industrial Engineering Method

337

(1)

Conference Method

337

(1)

Account Analysis Method

338

(1)

Quantitative Analysis Methods

338

(1)

Steps in Estimating a Cost Function Using Quantitative Analysis

338

(6)

High-Low Method

341

(1)

Regression Analysis Method

342

(2)

Evaluating Cost Drivers of the Estimated Cost Function

344

(1)

Focus on Values and Behaviors: Boeing's Management Accountants: Embracing Opportunities and Taking Challenges

345

(2)

Cost Drivers and Activity-Based Costing

347

(1)

Nonlinearity and Cost Functions

347

(1)

Concepts in Action: Activity-Based Costing: Identifying Cost and Revenue Drivers

348

(1)

Learning Curves and Nonlinear Cost Functions

349

(4)

Cumulative Average-Time Learning Model

350

(1)

Incremental Unit-Time Learning Model

350

(2)

Setting Prices, Budgets, and Standards

352

(1)

Data Collection and Adjustment Issues

353

(3)

Problem for Self-Study

354

(2)

Decision Points

356

(1)

Appendix: Regression Analysis

356

(22)

Terms to Learn

363

(1)

Assignment Material

364

(13)

Case: U.S. Brewing Industry

377

(1)

Decision Making and Relevant Information

378

(41)

Information and the Decision Process

379

(1)

The Concept of Relevance

380

(1)

Relevant Costs and Relevant Revenues

380

(1)

Qualitative and Quantitative Relevant Information

381

(1)

An Illustration of Relevance: Choosing Output Levels

381

(3)

One-Time-Only Special Orders

381

(2)

Potential Problems in Relevant-Cost Analysis

383

(1)

Insourcing-versus-Outsourcing and Make-versus-Buy Decisions

384

(2)

Outsourcing and Idle Facilities

384

(2)

Strategic and Qualitative Factors

386

(1)

Opportunity Costs and Outsourcing

386

(1)

Concepts in Action: The Benefits and Costs of ``Offshoring''

387

(2)

The Opportunity Cost Approach

388

(1)

Concepts in Action: Delta Airlines, the Internet, and Opportunity Costs

389

(2)

Carrying Costs of Inventory

390

(1)

Product-Mix Decisions Under Capacity Constraints

391

(2)

Customer Profitability, Activity-Based Costing, and Relevant Costs

393

(3)

Relevant-Revenue and Relevant-Cost Analysis of Dropping a Customer

394

(1)

Relevant-Revenue and Relevant-Cost Analysis of Adding a Customer

395

(1)

Relevant-Revenue and Relevant-Cost Analysis of Closing or Adding Branches or Segments

395

(1)

Irrelevance of Past Costs and Equipment-Replacement Decisions

396

(2)

Decisions and Performance Evaluation

398

(1)

Focus on Values and Behaviors: Beyond the Walls of the Accounting Department

399

(2)

Problem for Self-Study

399

(2)

Decision Points

401

(1)

Appendix: Linear Programming

401

(18)

Terms to Learn

404

(1)

Assignment Material

404

(13)

Video Case: Store 24

417

(2)

Pricing Decisions and Cost Management

419

(36)

Major Influences on Pricing Decisions

420

(1)

Customers, Competitors, and Costs

420

(1)

Time Horizon of Pricing Decisions

420

(1)

Costing and Pricing for the Short Run

421

(1)

Relevant Costs for Short-Run Pricing Decisions

421

(1)

Strategic and Other Factors in Short-Run Pricing

421

(1)

Costing and Pricing for the Long Run

422

(3)

Calculating Product Costs for Long-Run Pricing Decisions

422

(2)

Alternative Long-Run Pricing Approaches

424

(1)

Target Costing for Target Pricing

425

(2)

Understanding Customers Perceived Value

425

(1)

Doing Competitor Analysis

425

(1)

Implementing Target Pricing and Target Costing

425

(1)

Value Engineering, Cost Incurrence, and Locked-In Costs

426

(1)

Concepts in Action: Extreme Target Pricing and Cost Management at IKEA

427

(2)

Value -Chain Analysis and Cross-Functional Teams

428

(1)

Focus on Values and Behaviors: Pricing Decisions Are Never Arbitrary

429

(1)

Achieving the Target Cost per Unit for Provalue

430

(2)

Cost-Based (Cost-Plus) Pricing

432

(3)

Cost-Plus Target Rate of Return on Investment

432

(1)

Alternative Cost-Plus Methods

433

(1)

Cost-Plus Pricing and Target Pricing

434

(1)

Global Surveys of Company Practice: Differences in Pricing Practices and Cost Management Methods in Various Countries

435

(1)

Life-Cycle Product Budgeting and Costing

436

(2)

Life-Cycle Budgeting and Pricing Decisions

436

(2)

Customer Life-Cycle Costing

438

(1)

Considerations Other than Costs in Pricing Decisions

438

(1)

Effects of Antitrust Laws on Pricing

439

(16)

Problem for Self-Study

441

(1)

Decision Points

442

(1)

Terms to Learn

443

(1)

Assignment Material

443

(11)

Video Case: Grand Canyon Railway

454

(1)

Part Four Cost Allocation and Revenues

455

(76)

Strategy, Balanced Scorecard, and Strategic Profitability Analysis

455

(37)

What Is Strategy?

456

(1)

Strategy Implementation and the Balanced Scorecard

457

(5)

The Balanced Scorecard

457

(1)

Quality Improvement and Reengineering at Chipset

458

(1)

Four Perspectives of the Balanced Scorecard

459

(2)

Implementing a Balanced Scorecard

461

(1)

Aligning the Balanced Scorecard to Strategy

461

(1)

Focus on Values and Behaviors: The New Wave of Accounting: Contributing to Strategy

462

(2)

Features of a Good Balanced Scorecard

462

(1)

Pitfalls in Implementing a Balanced Scorecard

463

(1)

Global Surveys of Company Practice: Widening the Performance-Measurement Lens Using the Balanced Scorecard

464

(1)

Evaluating the Success of Strategy and Implementation

465

(1)

Strategic Analysis of Operating Income

465

(7)

Growth Component of Change in Operating Income

467

(1)

Price-Recovery Component of Change in Operating Income

468

(1)

Productivity Component of Change in Operating Income

469

(2)

Further Analysis of Growth, Price-Recovery, and Productivity Components

471

(1)

Downsizing and the Management of Capacity

472

(1)

Concepts in Action: Growth-versus-Profitability Choices of Dot-Com Companies

473

(7)

Identifying Unused Capacity for Engineered and Discretionary Overhead Costs

474

(1)

Managing Unused Capacity

475

(1)

Problem for Self-Study

476

(3)

Decision Points

479

(1)

Appendix: Productivity Measurement

480

(12)

Terms to Learn

482

(1)

Assignment Material

482

(8)

Video Case: McDonald's Corporation

490

(2)

Cost Allocation, Customer-Profitability Analysis, and Sales-Variance Analysis

492

(39)

Purposes of Cost Allocation

493

(1)

Criteria to Guide Cost-Allocation Decisions

494

(2)

Cost Allocation and Costing Systems

496

(3)

Allocating Corporate Costs to Divisions and Products

498

(1)

Global Surveys of Company Practice: Allocation of Corporate and Other Support Costs to Divisions and Departments

499

(2)

Implementing Corporate Cost Allocations

500

(1)

Customer Revenues and Customer Costs

501

(4)

Customer Revenue Analysis

502

(1)

Customer Cost Analysis

502

(1)

Customer-Level Costs

503

(2)

Focus on Values and Behaviors: So Is the Customer Always Right?

505

(1)

Concepts in Action: Customer Profitability at Nextel

506

(1)

Customer-Profitability Profiles

506

(2)

Sales Variances

508

(2)

Static-Budget Variance

509

(1)

Flexible-Budget Variance and Sales-Volume Variance

509

(1)

Sales-Mix and Sales-Quantity Variances

510

(2)

Sales-Mix Variance

510

(1)

Sales-Quantity Variance

511

(1)

Market-Share and Market-Size Variances

512

(4)

Market-Share Variance

512

(1)

Market-Size Variance

513

(1)

Problem for Self-Study

514

(1)

Decision Points

515

(1)

Appendix: Mix and Yield Variances for Substitutable Inputs

516

(15)

Terms to Learn

519

(1)

Assignment Material

519

(11)

Video Case: Cost Allocation

530

(1)

Part Five Quality and JIT

531

(193)

Allocation of Support-Department Costs, Common Costs, and Revenues

531

(34)

Allocating Costs of a Support Department to Operating Departments

532

(4)

Single-Rate and Dual-Rate Methods

532

(1)

Allocation Based on the Demand for or Usage of Computer Services

533

(1)

Allocation Based on the Supply of Capacity

534

(1)

Budgeted versus Actual Rates

535

(1)

Budgeted Usage, Actual Usage, and Capacity-Level Allocation Bases

535

(1)

Focus on Values and Behaviors: Finance Executives at Boeing: Setting the Wrong Example

536

(1)

Allocating Costs of Multiple Support Departments

537

(7)

Direct Method

538

(1)

Step-Down Method

539

(1)

Reciprocal Method

540

(2)

Overview of Methods

542

(2)

Global Surveys of Company Practice: Allocation of Support-Department Costs

544

(1)

Allocating Common Costs

544

(2)

Stand-Alone Cost-Allocation Method

544

(1)

Incremental Cost-Allocation Method

545

(1)

Cost Allocations and Contracts

546

(1)

Contracting with the U.S. Government

546

(1)

Fairness of Pricing

546

(1)

Revenue Allocation and Bundled Products

547

(1)

Concepts in Action: Contract Disputes over Reimbursable Costs for U.S. Government Agencies

548

(1)

Revenue-Allocation Methods

548

(17)

Stand-Alone Revenue-Allocation Method

549

(1)

Incremental Revenue-Allocation Method

549

(2)

Other Revenue-Allocation Methods

551

(1)

Problem for Self-Study

552

(1)

Decision Points

553

(1)

Terms to Learn

554

(1)

Assignment Material

554

(10)

Case: Stanford University

564

(1)

Cost Allocation: Joint Products and Byproducts

565

(29)

Joint-Cost Basics

566

(1)

Main Products, Joint Products, and Byproducts

566

(1)

Why Allocate Joint Costs?

567

(1)

Approaches to Allocating Joint Costs

567

(8)

Sales Value at Splitoff Method

569

(1)

Physical-Measure Method

570

(1)

Net Realizable Value (NRV) Method

571

(1)

Constant Gross-Margin Percentage NRV Method

572

(1)

Choosing a Method

573

(1)

Not Allocating Joint Costs

574

(1)

Global Surveys of Company Practice: Joint-Cost Allocation in the Oil Patch

575

(1)

Irrelevance of Joint Costs for Decision Making

575

(2)

Sell-or-Process-Further Decisions

575

(1)

Joint-Cost Allocation and Performance Evaluation

576

(1)

Focus on Values and Behaviors: Management Accountants: Overcoming the Pitfalls of Allocating Joint Costs

577

(1)

Pricing Decisions

577

(1)

Accounting for Byproducts

577

(3)

Production Method: Byproducts Recognized at Time Production Is Completed

578

(1)

Sales Method: Byproducts Recognized at Time of Sale

579

(1)

Concepts in Action: Chicken Processing: Costing of Joint Products and Byproducts

580

(14)

Problem for Self-Study

580

(2)

Decision Points

582

(1)

Terms to Learn

583

(1)

Assignment Material

583

(10)

Case: Memory Manufacturing Company

593

(1)

Process Costing

594

(38)

Illustrating Process Costing

595

(1)

Case 1: Process Costing with Zero Beginning and Zero Ending Work-in-Process Inventory

596

(1)

Case 2: Process Costing with Zero Beginning but Some Ending Work-In-Process Inventory

597

(3)

Physical Units and Equivalent Units (Steps 1 and 2)

598

(1)

Calculation of Product Costs (Steps 3, 4, and 5)

599

(1)

Journal Entries

600

(1)

Global Surveys of Company Practice: Process Costing in Different Industries

600

(1)

Case 3: Process Costing with Some Beginning and Some Ending Work-in-Process Inventory

601

(1)

Weighted-Average Method

602

(2)

First-in, First-out Method

604

(1)

Focus on Values and Behaviors: Royal Dutch/Shell: Making Estimations for All the Wrong Reasons

605

(3)

Comparison of Weighted-Average and FIFO Methods

608

(1)

Standard-Costing Method of Process Costing

609

(3)

Computations Under Standard Costing

610

(2)

Accounting for Variances

612

(1)

Transferred-In Costs in Process Costing

612

(5)

Transferred-In Costs and the Weighted-Average Method

614

(1)

Transferred-In Costs and the FIFO Method

615

(2)

Points to Remember about Transferred-In Costs

617

(1)

Hybrid-Costing Systems

617

(1)

Concepts in Action: Hybrid Costing for Customized Shoes at Adidas

618

(2)

Problem for Self-Study

618

(1)

Decision Points

619

(1)

Appendix: Operation Costing

620

(12)

Terms to Learn

623

(1)

Assignment Material

623

(8)

Video Case: Nontucket Nectars

631

(1)

Spoilage, Rework, and Scrap

632

(27)

Terminology

633

(1)

Different Types of Spoilage

633

(1)

Normal Spoilage

633

(1)

Abnormal Spoilage

634

(1)

Process Costing and Spoilage

634

(4)

Count All Spoilage

634

(1)

The Five-Step Procedure for Process Costing with Spoilage

635

(2)

Weighted-Average Method and Spoilage

637

(1)

Global Surveys of Company Practice: Rejection in the Electronics Industry

638

(4)

FIFO Method and Spoilage

638

(2)

Standard-Costing Method and Spoilage

640

(1)

Journal Entries

640

(2)

Inspection Points and Allocating Costs of Normal Spoilage

642

(1)

Job Costing and Spoilage

642

(2)

Job Costing and Rework

644

(1)

Accounting for Scrap

645

(2)

Recognizing Scrap at the Time of Its Sale

645

(1)

Recognizing Scrap at the Time of Its Production

646

(1)

Concepts in Action: Managing Waste and Environmental Costs at Toyota

647

(2)

Problem for Self-Study

648

(1)

Decision Points

648

(1)

Appendix: Inspection and Spoilage at Various Stages of Completion in Process Costing

649

(10)

Terms to Learn

651

(1)

Assignment Material

651

(7)

Case: The United Libbey-Nippon Plant

658

(1)

Balanced Scorecard: Quality, Time, and the Theory of Constraints

659

(32)

Part One: Quality as a Competitive Tool

660

(1)

The Financial Perspective: Costs of Quality

661

(2)

The Customer Perspective: Nonfinancial Measures of Customer Satisfaction

663

(1)

The Internal-Business-Process Perspective: Analyzing Quality Problems and Improving Quality

664

(4)

Control Charts

664

(1)

Pareto Diagrams

665

(1)

Cause-and-Effect Diagrams

665

(1)

Relevant Costs and Benefits of Evaluating Quality Improvement

666

(2)

Focus on Values and Behaviors: The Cost of Quality Failure at Firestone

668

(1)

Nonfinancial Measures of Internal-Business-Process Quality

668

(1)

The Learning-and-Growth Perspective for Quality Improvements

669

(1)

Evaluating Quality Performance

669

(1)

Advantages of COQ Measures

669

(1)

Advantages of Nonfinancial Measures of Quality

669

(1)

Part Two: Time as a Competitive Tool

670

(1)

Customer-Response Time and On-Time Performance

670

(1)

Time Drivers and Costs of Time

671

(1)

Uncertainty and Bottlenecks as Drivers of Time

671

(1)

Concepts in Action: Overcoming Bottlenecks on the Internet

672

(3)

Relevant Revenues and Costs of Time

673

(2)

Part Three: Theory of Constraints and Throughput-Contribution Analysis

675

(1)

Managing Bottlenecks

675

(3)

Balanced Scorecard and Time-Related Measures

678

(13)

Problem for Self-Study

678

(1)

Decision Points

679

(1)

Terms to Learn

680

(1)

Assignment Material

680

(10)

Video Case: Ritz-Carlton Hotel Company

690

(1)

Inventory Management, Just-in-Time, and Backflush Costing

691

(33)

Inventory Management in Retail Organizations

691

(6)

Costs Associated with Goods for Sale

692

(1)

Economic-Order-Quantity Decision Model

692

(2)

When to Order, Assuming Certainty

694

(1)

Safety Stock

695

(2)

Estimating Inventory-Related Relevant Costs and Their Effects

697

(1)

Considerations in Obtaining Estimates of Relevant Costs

697

(1)

Cost of a Production Error

697

(1)

Conflict Between the EOQ Decision Model and Managers' Performance Evaluation

698

(1)

Just-in-Time Purchasing

698

(4)

JIT Purchasing and EOQ Model Parameters

699

(1)

Relevant Costs of JIT Purchasing

699

(1)

Supplier Evaluation and Relevant Costs of Quality and Timely Deliveries

700

(1)

JIT Purchasing, Planning and Control, and Supply-Chain Analysis

701

(1)

Inventory Management and MRP

702

(1)

Global Surveys of Company Practice: Challenges in Securing the Benefits of Supply-Chain Management

703

(1)

Inventory Management and JIT Production

703

(2)

Effect of JIT Systems on Product Costing

704

(1)

Financial Benefits of JIT and Relevant Costs

704

(1)

Concepts in Action: After the Encore: Just-in-Time Live Concert CDs

705

(2)

Enterprise Resource Planning (ERP) Systems

706

(1)

Performance Measures and Control in JIT Production

706

(1)

Focus on Values and Behaviors: Challenges of Inventory Valuation and JIT Implementation

707

(1)

Backflush Costing

707

(17)

Simplified Normal or Standard Costing

707

(3)

Accounting for Variances

710

(3)

Special Considerations in Backflush Costing

713

(1)

Problem for Self-Study

714

(1)

Decision Points

715

(1)

Terms to Learn

716

(1)

Assignment Material

716

(7)

Video Case: Regal Marine

723

(1)

Part Six Investment Decisions and Management Control Systems

724

(101)

Capital Budgeting and Cost Analysis

724

(35)

Two Dimensions of Cost Analysis

724

(1)

Stages of Capital Budgeting

725

(1)

Discounted Cash Flow

726

(4)

Net Present Value Method

727

(1)

Internal Rate-of-Return Method

728

(2)

Comparison of Net Present Value and Internal Rate-of-Return Methods

730

(1)

Sensitivity Analysis

730

(1)

Payback Method

731

(1)

Uniform Cash Flows

731

(1)

Nonuniform Cash Flows

732

(1)

Accrual Accounting Rate-of Return Method

732

(1)

Evaluating Managers and Goal Congruence Issues

733

(1)

Relevant Cash Flows in Discounted Cash Flow Analysis

734

(1)

Global Surveys of Company Practice: Comparison of Capital Budgeting Methods

735

(5)

Relevant After-Tax Flows

736

(1)

Categories of Cash Flows

737

(3)

Managing the Project

740

(1)

Focus on Values and Behaviors: Long-Term Contracts and Performance Evaluation at Enron

741

(1)

Strategic Considerations in Capital Budgeting

741

(1)

Global Surveys of Company Practice: Global Budgeting at AES Corporation

742

(4)

Customer Value and Capital Budgeting

743

(1)

Investment in Research and Development

743

(1)

Problem for Self-Study

743

(2)

Decision Points

745

(1)

Appendix: Capital Budgeting and Inflation

746

(13)

Terms to Learn

748

(1)

Assignment Material

748

(10)

Video Case: Capital Budgeting at Pearson Education

758

(1)

Management Control Systems, Transfer Pricing, and Multinational Considerations

759

(32)

Management Control Systems

760

(1)

Evaluating Management Control Systems

760

(1)

Organization Structure and Decentralization

761

(3)

Benefits of Decentralization

762

(1)

Costs of Decentralization

762

(1)

Comparison of Benefits and Costs

763

(1)

Decentralization in Multinational Companies

763

(1)

Choices About Responsibility Centers

764

(1)

Transfer Pricing

764

(1)

An Illustration of Transfer Pricing

765

(3)

Market-Based Transfer Prices

768

(1)

Perfectly Competitive Market Case

768

(1)

Distress Prices

768

(1)

Cost-Based Transfer Prices

769

(3)

Full-Cost Bases

769

(2)

Variable Cost Bases

771

(1)

Prorating the Difference Between Maximum and Minimum Transfer Prices

771

(1)

Dual Pricing

772

(1)

Negotiated Transfer Prices

772

(1)

A General Guideline for Transfer-Pricing Situations

773

(1)

Global Surveys of Company Practice: Domestic and Multinational Transfer-Pricing Practices

774

(2)

Multinational Transfer-Pricing and Tax Considerations

776

(1)

Concepts in Action: U.S. Internal Revenue Service, Japanese National Tax Agency, and Transfer-Pricing Games

777

(2)

Focus on Values and Behaviors: Transfer Pricing Pressures

779

(12)

Problem for Self-Study

779

(2)

Decision Points

781

(1)

Terms to Learn

781

(1)

Assignment Material

782

(8)

Case: Information Systems Corporation

790

(1)

Performance Measurement, Compensation, and Multinational Considerations

791

(34)

Financial and Nonfinancial Performance Measures

792

(1)

Choosing Among Different Performance Measures: Step 1

793

(5)

Return on Investment

793

(2)

Residual Income

795

(1)

Economic Value Added

796

(1)

Return on Sales

797

(1)

Comparing Performance Measures

798

(1)

Choosing the Time Horizon of the Performance Measures: Step 2

798

(1)

Global Surveys of Company Practice: Key Financial Performance Measures Used Around the Globe

799

(1)

Choosing Alternative Definitions for Performance Measures: Step 3

800

(1)

Choosing Measurement Alternatives for Performance Measures: Step 4

800

(3)

Current Cost

800

(1)

Long-Term Assets: Gross or Net Book Value?

801

(2)

Choosing Target Levels of Performance: Step 5

803

(1)

Choosing the Timing of Feedback: Step 6

803

(1)

Performance Measurement in Multinational Companies

804

(1)

Calculating the Foreign Division's ROI in the Foreign Currency

804

(1)

Calculating the Foreign Division's ROI in U.S. Dollars

805

(1)

Distinction Between Managers and Organization Units

805

(3)

The Basic Trade-Off: Creating Incentives versus Imposing Risk

806

(1)

Intensity of Incentives and Financial and Nonfinancial Measurements

807

(1)

Benchmarks and Relative Performance Evaluation

807

(1)

Performance Measures at the Individual Activity Level

808

(1)

Performing Multiple Tasks

808

(1)

Team-Based Compensation Arrangements

808

(1)

Executive Performance Measures and Compensation

809

(1)

Concepts in Action: CEO Compensation and Company Performance

810

(1)

Strategy and Levers of Control

811

(1)

Focus on Values and Behaviors: The Courage to Say No

811

(14)

Problem for Self-Study

813

(1)

Decision Points

814

(1)

Terms to Learn

815

(1)

Assignment Material

815

(9)

Video Case: McDonald's Corporation

824

(1)

Appendix A: Global Surveys of Company Practice

825

(4)

Appendix B: Recommended Readings

829

(4)

Appendix C: Notes on Compound Interest and Interest Tables

833

(8)

Appendix D: Cost Accounting in Professional Examinations

841

(4)

Glossary

845

(12)

Author Index

857

(2)

Company Index

859

(2)

Subject Index

861

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Cost Accounting: A Managerial Emphasis

Cost Accounting: A Managerial Emphasis

9780131495388

0131495380

Summary

Table of Contents

Supplemental Materials

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Amazon no longer offers textbook rentals. We do!

Cost Accounting: A Managerial Emphasis

Cost Accounting: A Managerial Emphasis

9780131495388

0131495380

Summary

Table of Contents

Supplemental Materials

Write a Review

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