Book description
Cost accounting has become an increasingly important tool for managers and accountants alike. The second edition helps them achieve professional success by bridging the gaps between knowledge, skills and abilities. It has been revised to focus on decision-making while still examining the procedural detail. It also emphasizes the analysis and application of concepts. Additional examples and illustrations draw comparisons between government and manufacturing. Real-world scenarios and ethical decision-making sections demonstrate how the material is applied. Accountants and managers will also view Excel spreadsheets to give them a better understanding of the material.
Table of contents
- Cover Page
- Title Page
- Copyright
- About the Authors
- Preface
- Acknowledgments
- Brief Contents
- Contents
-
PART ONE: MEASURING AND USING COSTS FOR MANAGEMENT DECISIONS
-
CHAPTER 1: The Role of Accounting Information in Management Decision Making
- MOTOROLA'S IRIDIUM PROJECT: LOOK BEFORE YOU LEAP
- STRATEGIC MANAGEMENT AND DECISION MAKING
- LEVERS OF CONTROL
- COST ACCOUNTING AND STRATEGIC MANAGEMENT
- INFORMATION SYSTEMS AND STRATEGIC MANAGEMENT
- RELEVANT INFORMATION FOR DECISION MAKING
- SNOW-BLADE SNOWBOARDS IDENTIFYING RELEVANT COSTS
- BUSINESS RISK
- DECISION-MAKING BIASES
- RISK OF BIASED DECISIONS Nonrational Escalation of Commitment
- QUALITY OF MANAGEMENT DECISION-MAKING
- ETHICAL DECISION MAKING
- FOCUS ON ETHICAL DECISION MAKING Ethical Considerations in Outsourcing Decisions
- APPENDIX 1A Steps for Better Thinking: A Decision-Making Process
-
CHAPTER 2: The Cost Function
- FLYING LOW DURING AN ECONOMIC DOWNTURN
- IDENTIFYING RELEVANT COSTS FOR A DECISION
- COST BEHAVIOR
- FOCUS ON ETHICAL DECISION MAKING Discretionary Costs
- INFORMATION USED TO ESTIMATE COSTS
- COST ESTIMATION TECHNIQUES
- RISK OF BIASED DECISIONS Insensitivity to Sample Size
- ESTIMATING THE COST FUNCTION
- SMALL ANIMAL CLINIC (PART 1) CREATING A COST FUNCTION
- REGRESSION ANALYSIS
- SMALL ANIMAL CLINIC (PART 2) TWO-POINT METHOD AND REGRESSION ANALYSIS
- STRATEGIC RISK MANAGEMENT Small Animal Clinic (Part 2)
- USES AND LIMITATIONS OF COST ESTIMATES
- APPENDIX 2A Regression Analysis–Additional Topics
- MULTIPLE REGRESSION ANALYSIS
- PRINT MASTERS PRINT SHOP USING MULTIPLE REGRESSION TO ESTIMATE A COST FUNCTION
- REGRESSION ANALYSIS ASSUMPTIONS
- ADDITIONAL REGRESSION ANALYSIS CONSIDERATIONS
- APPENDIX 2B Learning Curves
-
CHAPTER 3: Cost-Volume-Profit Analysis
- WIRED OR WIRELESS: ADJUSTING TO NEW MARKETS
- COST-VOLUME-PROFIT ANALYSIS
- DIE GEFLECKTE KUH EIS (THE SPOTTED COW CREAMERY) (PART 1) CVP ANALYSIS WITH INCOME TAXES
- RISK OF BIASED DECISIONS Optimism Bias
- PERFORMING CVP ANALYSES WITH A SPREADSHEET
- DIE GEFLECKTE KUH EIS (THE SPOTTED COW CREAMERY) (PART 2) THE INFLUENCE OF SALES MIX ON PROFITABILITY
- STRATEGIC RISK MANAGEMENT Spotted Cow Creamery (Part 2)
- ASSUMPTIONS AND LIMITATIONS OF COST-VOLUME-PROFIT ANALYSIS
- SMALL ANIMAL CLINIC NOT-FOR-PROFIT ORGANIZATION CVP ANALYSIS WITH TWO RELEVANT RANGES
- MARGIN OF SAFETY AND DEGREE OF OPERATING LEVERAGE
- FOCUS ON ETHICAL DECISION MAKING Temporary Labor
-
CHAPTER 4: Relevant Information for Decision Making
- INTERNATIONAL OUTSOURCING: THE GOOD, THE BAD, AND THE CONTROVERSIAL
- RELEVANT INFORMATION FOR DECISION MAKING
- SPECIAL ORDERS
- BARKLEY BASKETBALLS SPECIAL ORDER
- STRATEGIC RISK MANAGEMENT Barkley Basketballs
- KEEP OR DROP DECISIONS
- HOME AIDE SERVICES KEEP OR DROP
- STRATEGIC RISK MANAGEMENT Home Aide Services
- RISK OF BIASED DECISIONS Confirmation Bias
- INSOURCE OR OUTSOURCE (MAKE OR BUY) DECISIONS
- ROADRUNNER PUBLISHERS (PART 1) INSOURCE OR OUTSOURCE
- FOCUS ON ETHICAL DECISION MAKING Offshoring Surgery
- PRODUCT EMPHASIS DECISIONS
- ROADRUNNER PUBLISHERS (PART 2) CONSTRAINED RESOURCE
- STRATEGIC RISK MANAGEMENT Roadrunner Publishers (Part 2)
- PRODUCT EMPHASIS: MULTIPLE RESOURCE CONSTRAINTS AND MULTIPLE PRODUCTS
- BERTRAM GOLF CARTS MULTIPLE CAPACITY CONSTRAINTS AND MULTIPLE PRODUCTS
- STRATEGIC RISK MANAGEMENT Bertram Golf Carts
- METHODS FOR RELAXING CONSTRAINTS
- QUALITY OF OPERATING DECISIONS
- ROADRUNNER PUBLISHERS (PART 3) INSOURCE OR OUTSOURCE WITH OPPORTUNITY COSTS
- APPENDIX 4A Using Excel Solver for Product Emphasis and Constrained Resource Decisions
-
CHAPTER 1: The Role of Accounting Information in Management Decision Making
-
PART TWO: MEASURING AND ASSIGNING COSTS FOR INTERNAL AND EXTERNAL REPORTING
-
CHAPTER 5: Job Costing
- BOMBARDIER: CUSTOM MANUFACTURING
- ASSIGNING PRODUCT COSTS TO INDIVIDUAL GOODS OR SERVICES
- JOB COSTING IN MANUFACTURING
- ALLOCATING OVERHEAD
- ALUMINUM BENDERS (PART 1) ALLOCATING OVERHEAD COSTS IN JOB COSTING
- GENERAL LEDGER ENTRIES FOR A MANUFACTURER
- SERVICE SECTOR JOB COSTING
- NIGHTHAWK, LLP JOB COSTING IN A LAW FIRM
- STRATEGIC RISK MANAGEMENT Nighthawk, LLP
- JOB COST INFORMATION, DECISION MAKING, AND INCENTIVES
- ALUMINUM BENDERS (PART 2) JOB COSTS RELEVANT FOR DECISION MAKING
- RISK OF BIASED DECISIONS Hindsight Bias
- FOCUS ON ETHICAL DECISION MAKING Overbilling Clients for Expenses
- SPOILAGE, REWORK, AND SCRAP IN JOB COSTING
- ALUMINUM BENDERS (PART 3) ASSIGNING SPOILAGE COSTS
- PRODUCTION QUALITY AND BEHAVIOR IMPLICATIONS
-
CHAPTER 6: Process Costing
- NESTLÉ: BOTTLING WATER IN TENNESSEE
- ACCOUNTING FOR THE COST OF MASS-PRODUCED GOODS
- PROCESS COSTING METHODS
- RISK OF BIASED DECISIONS Lake Wobegon Effect
- GENERAL LEDGER ACCOUNTS FOR PROCESS COSTING
- PREMIER PLASTICS (PART 1) CHOOSING A PROCESS COSTING METHOD
- FOCUS ON ETHICAL DECISION MAKING Humane Treatment of Chickens
- PROCESS COSTING UNDER DIFFERENT ASSUMPTIONS
- PREMIER PLASTICS (PART 2) COSTS TRANSFERRED FROM ANOTHER DEPARTMENT AND DIRECT MATERIALS ADDED LATER IN THE PROCESS
- ALTERNATIVE SYSTEMS FOR COSTING MASS PRODUCTION
- ACCOUNTING FOR SPOILAGE IN PROCESS COSTING
- PREMIER PLASTICS (PART 3) FIFO COST REPORT WITH NORMAL AND ABNORMAL SPOILAGE
- STRATEGIC RISK MANAGEMENT Premier Plastics (Part 3)
- PROCESS COST INFORMATION AND MANAGER'S INCENTIVES AND DECISIONS
-
CHAPTER 7: Multi-Pool, Multi-Driver Costing Methods
- SUN LIFE: ANALYZING THE COST OF CLAIMS PROCESSING
- ACTIVITY-BASED COSTING (ABC)
- ABC COST HIERARCHY
- ASSIGNING COSTS USING AN ABC SYSTEM
- KEENER DOORS AND WINDOWS (PART 1) COMPARISON OF ABC AND TRADITIONAL JOB COSTING
- STRATEGIC RISK MANAGEMENT Keener Doors and Windows (Part 1)
- ABC IN SERVICE ORGANIZATIONS
- ACTIVITY-BASED MANAGEMENT
- KEENER DOORS AND WINDOWS (PART 2) CUSTOMER PROFITABILITY ANALYSIS, WARRANTY COST ANALYSIS, AND ABM
- SWISS WATCH ABM AND THE COST OF QUALITY
- STRATEGIC RISK MANAGEMENT Swiss Watch
- FOCUS ON ETHICAL DECISION MAKING Promoting Inappropriate Uses of ABC
- OTHER MULTI-POOL, MULTI-DRIVER COST ACCOUNTING SYSTEMS
- RISK OF BIASED DECISIONS Status Quo Bias
- MULTI-POOL, MULTI-DRIVER SYSTEMS, DECISION MAKING, AND INCENTIVES
-
CHAPTER 8: Measuring and Assigning Support Department Costs
- ALLOCATING SUPPORT DEPARTMENT COSTS IN SEATTLE
- SUPPORT DEPARTMENT COST ALLOCATION
- PROCESS FOR ALLOCATING SUPPORT DEPARTMENT COSTS
- DIRECT METHOD
- MIDDLETOWN CHILDREN'S CLINIC (PART 1) DIRECT METHOD ALLOCATION
- STEP-DOWN METHOD
- MIDDLETOWN CHILDREN'S CLINIC (PART 2) STEP-DOWN METHOD ALLOCATION
- RECIPROCAL METHOD
- MIDDLETOWN CHILDREN'S CLINIC (PART 3) RECIPROCAL METHOD ALLOCATION
- STRATEGIC RISK MANAGEMENT Middletown Children's Clinic (Part 3)
- SINGLE- VERSUS DUAL-RATE ALLOCATIONS
- MIDDLETOWN CHILDREN'S CLINIC (PART 4) DUAL RATES AND RECIPROCAL METHOD WITH THREE SUPPORT DEPARTMENTS
- STRATEGIC RISK MANAGEMENT Middletown Children's Clinic (Part 4)
- SUPPORT COST ALLOCATIONS, DECISION MAKING, AND INCENTIVES
- RISK OF BIASED DECISIONS Fairness Bias
- FOCUS ON ETHICAL DECISION MAKING Classifying Overhead Costs at Stanford University
- APPENDIX 8A Using Solver to Calculate Simultaneous Equations for the Reciprocal Method
-
CHAPTER 9: Joint Product and By-Product Costing
- HYPERION–TURNING WASTE INTO PROFIT
- JOINT PRODUCTS AND COSTS
- ALLOCATING JOINT COSTS
- CHOOSING AN APPROPRIATE JOINT COST ALLOCATION METHOD
- MERRITT BROTHERS (PART 1) CHOOSING AN APPROPRIATE ALLOCATION METHOD
- PROCESSING A JOINT PRODUCT BEYOND THE SPLIT-OFF POINT
- MERRITT BROTHERS (PART 2) JOINT PRODUCT DECISION MAKING
- STRATEGIC RISK MANAGEMENT Merritt Brothers (Part 2)
- RISK OF BIASED DECISIONS Joint-Versus-Separate Preference Reversals
- JOINT PRODUCTS AND BY-PRODUCTS
- JOINT PRODUCT COSTING WITH A SALES MIX
- PREMIUM PINEAPPLE COMPANY JOINT PRODUCT COSTING WITH A SALES MIX
- STRATEGIC RISK MANAGEMENT Premium Pineapple Company
- JOINT COST ALLOCATIONS, DECISION MAKING, AND INCENTIVES
- FOCUS ON ETHICAL DECISION MAKING: Hazardous Cement
-
CHAPTER 5: Job Costing
-
PART THREE: PLANNING, MONITORING, AND MOTIVATING
-
CHAPTER 10: Static and Flexible Budgets
- PLANNING FOR A MOVING TARGET
- BUDGETS AND THE STRATEGIC MANAGEMENT PROCESS
- MASTER BUDGET
- RISK OF BIASED DECISIONS Recency Effect
- UNIQUE SINKS (PART 1) DEVELOPING A MASTER BUDGET
- STRATEGIC RISK MANAGEMENT Unique Sinks (Part 1)
- FLEXIBLE BUDGETS
- UNIQUE SINKS (PART 2) DEVELOPING AND USING A FLEXIBLE BUDGET
- STRATEGIC RISK MANAGEMENT Unique Sinks (Part 2)
- BUDGETS AS PERFORMANCE BENCHMARKS
- UNIQUE SINKS (PART 3) DEVELOPING A VARIANCE REPORT
- STRATEGIC RISK MANAGEMENT Unique Sinks (Part 3)
- PEOPLE: THE CENTER OF THE BUDGETING PROCESS
- FOCUS ON ETHICAL DECISION MAKING: Timely Reporting of Budget Problems
- BEYOND TRADITIONAL BUDGETING
-
CHAPTER 11: Standard Costs and Variance Analysis
- RESPONDING TO UNEXPECTED CHANGES IN RESOURCE SUPPLIES AND PRICES
- VARIANCE ANALYSIS AND THE STRATEGIC MANAGEMENT PROCESS
- STANDARD COSTING
- CEMENTOS JUAREZ (PART 1) SETTING STANDARD COSTS
- RISK OF BIASED DECISIONS Anchoring Trap
- STRATEGIC RISK MANAGEMENT Cementos Juarez (Part 1)
- DIRECT COST VARIANCES
- CEMENTOS JUAREZ (PART 2) VARIANCES FOR DIRECT MATERIALS AND DIRECT LABOR
- ANALYZING DIRECT COST VARIANCE INFORMATION
- CEMENTOS JUAREZ (PART 3) ANALYZING DIRECT COST VARIANCE INFORMATION
- OVERHEAD VARIANCES
- CEMENTOS JUAREZ (PART 4) OVERHEAD VARIANCES
- ANALYZING OVERHEAD VARIANCE INFORMATION
- COST VARIANCE ADJUSTMENTS
- FOCUS ON ETHICAL DECISION MAKING Wasted Soup
- APPENDIX 11A Profit-Related Variances
-
CHAPTER 12: Strategic Investment Decisions
- KEEPING AN EYE ON CHINESE MANUFACTURING CAPACITY
- STRATEGIC INVESTMENT DECISIONS
- NET PRESENT VALUE METHOD
- BUSINESS RISK AND SENSITIVITY ANALYSIS
- RISK OF BIASED DECISIONS Overconfidence Trap
- BOULDER MEDICAL SUPPLY (PART 1) NET PRESENT VALUE WITH OPPORTUNITY COST AND SENSITIVITY ANALYSIS
- STRATEGIC RISK MANAGEMENT Boulder Medical Supply (Part 1)
- INTERNAL RATE OF RETURN
- PAYBACK METHOD
- ACCRUAL ACCOUNTING RATE OF RETURN METHOD
- OTHER CONSIDERATIONS FOR STRATEGIC INVESTMENT DECISIONS
- FOCUS ON ETHICAL DECISION MAKING The Right Thing To Do
- INCOME TAXES AND THE NET PRESENT VALUE METHOD
- BOULDER MEDICAL SUPPLY (PART 2) NET PRESENT VALUE WITH INCOME TAXES
- APPENDIX 12A Inflation and the Net Present Value Method
- CENTRAL IRRIGATION, INC. NPV ANALYSIS WITH INCOME TAXES AND INFLATION
- APPENDIX 12B Present and Future Value Tables
-
CHAPTER 13: Strategic Pricing and Cost Management
- COMPETITION AND STRATEGIC LOSSES
- SECTION 1 Continuous Cost Improvement
- VALUE CHAIN ANALYSIS
- BUILDING DESIRED PROFIT INTO DECISIONS
- TARGET COSTING
- MOUNT RAINIER BIKES (PART 1) TARGET COSTING
- KAIZEN COSTING
- MOUNT RAINIER BIKES (PART 2) KAIZEN COSTING
- LIFE CYCLE COSTING
- RISK OF BIASED DECISIONS Positive Illusions
- LEAN ACCOUNTING
- SECTION 2 Price Management
- PRICING METHODS
- PROFIT-MAXIMIZING MARKET-BASED PRICE
- FRENCH PERFUMERY USING PRICE ELASTICITY TO CALCULATE PRODUCT PRICES
- OTHER MARKET-BASED PRICING METHODS
- COST-BASED VERSUS MARKET-BASED PRICING
- OTHER INFLUENCES ON PRICE
- FOCUS ON ETHICAL DECISION MAKING Price Gouging after Tragedy
- PRICING IN NOT-FOR-PROFIT ORGANIZATIONS
- GOVERNMENT REGULATIONS AND PRICING
-
CHAPTER 14: Measuring and Assigning Costs for Income Statements
- INVENTORY: SCARCITY OR ABUNDANCE?
- ABSORPTION COSTING AND VARIABLE COSTING
- RISK OF BIASED DECISION MAKING Weasel Words
- BOATS AFLOAT YACHT COMPANY (PART 1) ABSORPTION COSTING AND VARIABLE COSTING INCOME STATEMENTS
- BOATS AFLOAT YACHT COMPANY (PART 2) RECONCILING ABSORPTION COSTING AND VARIABLE COSTING INCOME STATEMENTS
- THROUGHPUT COSTING
- COMPARISON OF ABSORPTION, VARIABLE, AND THROUGHPUT COSTING
- ABSORPTION COSTING USING NORMAL COSTING
- SKI DOODLE COMPARING RESULTS USING ACTUAL PRODUCTION VOLUMES AND NORMAL CAPACITY
- FLYING FORTRESS ABSORPTION AND VARIABLE INCOME STATEMENTS WITH BEGINNING INVENTORIES
- DECISION MAKING AND MANAGER INCENTIVES
- FOCUS ON ETHICAL DECISION MAKING Channel Stuffing at Bristol-Myers Squibb
-
CHAPTER 15: Performance Evaluation and Compensation
- NUCOR: A GROUP OF PEOPLE IN HEADLONG PURSUIT OF A SHARED PURPOSE*
- AGENCY THEORY
- DECISION-MAKING AUTHORITY AND RESPONSIBILITY
- RESPONSIBILITY ACCOUNTING
- INVESTMENT CENTER PERFORMANCE EVALUATION
- COMPUTER WIZARDS (PART 1) RETURN ON INVESTMENT AND DUPONT ANALYSIS
- COMPUTER WIZARDS (PART 2) COMPARING ALTERNATIVE INVESTMENT CENTER MEASURES
- MOTIVATING PERFORMANCE WITH COMPENSATION
- RISK OF BIASED DECISIONS Regression to the Mean
- FOCUS ON ETHICAL DECISION MAKING Bailouts and Bonuses
- TRANSFER PRICE POLICIES
- COMPUTER WIZARDS (PART 3) NEGOTIATED TRANSFER PRICES
- ADDITIONAL TRANSFER PRICE CONSIDERATIONS
-
CHAPTER 16: Strategic Performance Measurement
- WAL-MART STORES: MAINTAINING A LOW-COST STRATEGY
- STRATEGIC MANAGEMENT AND DECISION MAKING
- MEASURING ORGANIZATIONAL PERFORMANCE
- BALANCED SCORECARD
- ROYAL PHILIPS ELECTRONICS ADOPTING A BALANCED SCORECARD
- RISK OF BIASED DECISIONS Information Overload
- IMPLEMENTING A BALANCED SCORECARD
- COMMUNITY HOSPITAL IMPLEMENTING A BALANCED SCORECARD
- STRATEGIC RISK MANAGEMENT Community Hospital
- BALANCED SCORECARD, STRATEGIC MANAGEMENT, AND INCENTIVES
- FOCUS ON ETHICAL DECISION MAKING Economic Medicalization of Research Studies
- ENVISIONING THE FUTURE OF COST ACCOUNTING
-
CHAPTER 17: Sustainability Accounting
- THE SCOOP ON SOCIAL AND ENVIRONMENTAL REPORTING AT BEN & JERRY'S®
- SUSTAINABLE MANAGEMENT
- FOCUS ON ETHICAL DECISION MAKING Rooting Out Bribery
- SUSTAINABILITY ACCOUNTING AND REPORTING
- EXTERNAL SUSTAINABILITY REPORTING
- RISK OF BIASED DECISIONS Greenwashing
- SUSTAINABILITY MANAGEMENT ACCOUNTING TOOLS
- PREMIER PLASTICS (PART 4) MATERIAL FLOW FIFO COST REPORT
- STRATEGIC RISK MANAGEMENT Premier Plastics (Part 4)
-
CHAPTER 10: Static and Flexible Budgets
- Glossary
- Credits
- Organization and People Index
- Subject Index
Product information
- Title: Cost Management: Measuring, Monitoring, and Motivating Performance, 2nd Edition
- Author(s):
- Release date: July 2011
- Publisher(s): Wiley
- ISBN: 9780470769423
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