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Management Accounting Best Practices: A Guide for the Professional Accountant

Name: Management Accounting Best Practices: A Guide for the Professional Accountant
Author: Steven M. Bragg
ISBN: 9780471743477

by Steven M. Bragg

August 2013

Intermediate to advanced

304 pages

9h 38m

English

Wiley

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Cover Page
Title Page
Copyright
Dedication
Contents
Preface
About the Author
Free Online Resources by Steve Bragg
Chapter 1: Budgeting Decisions
1-1 HOW DOES THE SYSTEM OF INTERLOCKING BUDGETS WORK?1-2 WHAT DOES A SAMPLE BUDGET LOOK LIKE?1-3 HOW DOES FLEX BUDGETING WORK?1-4 WHAT BEST PRACTICES CAN I APPLY TO THE BUDGETING PROCESS?1-5 HOW CAN I INTEGRATE THE BUDGET INTO THE CORPORATE CONTROL SYSTEM?1-6 HOW DO THROUGHPUT CONCEPTS IMPACT THE BUDGET?
Chapter 2: Capital Budgeting Decisions
2-1 HOW DOES A CONSTRAINED RESOURCE IMPACT CAPITAL BUDGETING DECISIONS?2-2 WHAT IS THE TRUE COST OF A CAPACITY CONSTRAINT?2-3 HOW DO I IDENTIFY A CONSTRAINED RESOURCE?2-4 WHEN SHOULD I INVEST IN A CONSTRAINED RESOURCE?2-5 SHOULD I INCREASE SPRINT CAPACITY?2-6 HOW CLOSELY SHOULD I LINK CAPITAL EXPENDITURES TO STRATEGY?2-7 WHAT FORMAT SHOULD I USE FOR A CAPITAL REQUEST FORM?2-8 SHOULD I JUDGE CAPITAL PROPOSALS BASED ON THEIR DISCOUNTED CASH FLOWS?2-9 HOW DO I CALCULATE THE COST OF CAPITAL?2-10 WHEN SHOULD I USE THE INCREMENTAL COST OF CAPITAL?2-11 HOW DO I USE NET PRESENT VALUE IN CAPITAL BUDGETING?2-12 WHAT PROPOSAL FORM SHOULD I REQUIRE FOR A CASH FLOW ANALYSIS?2-13 SHOULD I USE THE PAYBACK PERIOD IN CAPITAL BUDGETING?2-14 HOW CAN A POST-COMPLETION ANALYSIS HELP ME?2-15 WHAT FACTORS SHOULD I CONSIDER FOR A SITE SELECTION?

Chapter 3: Credit and Collection Decisions
3-1 HOW DO I CREATE AND MAINTAIN A CREDIT POLICY?3-2 WHEN SHOULD I REQUIRE A CREDIT APPLICATION?3-3 HOW DO I OBTAIN FINANCIAL INFORMATION ABOUT CUSTOMERS?3-4 HOW DOES A CREDIT GRANTING SYSTEM WORK?3-5 WHAT PAYMENT TERMS SHOULD I OFFER TO CUSTOMERS?3-6 WHEN SHOULD I REVIEW CUSTOMER CREDIT LEVELS?3-7 HOW CAN I ADJUST THE INVOICE CONTENT AND LAYOUT TO IMPROVE COLLECTIONS?3-8 HOW CAN I ADJUST BILLING DELIVERY TO IMPROVE COLLECTIONS?3-9 HOW DO I ACCELERATE CASH COLLECTIONS?3-10 SHOULD I OFFER EARLY PAYMENT DISCOUNTS?3-11 HOW DO I OPTIMIZE CUSTOMER CONTACTS?3-12 HOW DO I MANAGE CUSTOMER CONTACT INFORMATION?3-13 HOW DO I INVOLVE THE SALES STAFF IN COLLECTIONS?3-14 HOW DO I HANDLE PAYMENT DEDUCTIONS?3-15 HOW DO I COLLECT OVERDUE PAYMENTS?3-16 WHEN SHOULD I TAKE LEGAL ACTION TO COLLECT FROM A CUSTOMER?
Chapter 4: Control System Decisions
4-1 WHY DO I NEED CONTROLS?4-2 HOW DO I CONTROL ORDER ENTRY?4-3 HOW DO I CONTROL CREDIT MANAGEMENT?4-4 HOW DO I CONTROL PURCHASING?4-5 HOW DO I CONTROL PROCUREMENT CARDS?4-6 HOW DO I CONTROL PAYABLES?4-7 HOW DO I CONTROL INVENTORY?4-8 HOW DO I CONTROL BILLINGS?4-9 HOW DO I CONTROL CASH RECEIPTS?4-10 HOW DO I CONTROL PAYROLL?4-11 HOW DO I CONTROL FIXED ASSETS?
Chapter 5: Financial Analysis Decisions
5-1 HOW DO I CALCULATE THE BREAKEVEN POINT?5-2 WHAT IS THE IMPACT OF FIXED COSTS ON THE BREAKEVEN POINT?5-3 WHAT IS THE IMPACT OF VARIABLE COST CHANGES ON THE BREAKEVEN POINT?5-4 HOW DO PRICING CHANGES ALTER THE BREAKEVEN POINT?5-5 HOW CAN THE PRODUCT MIX ALTER PROFITABILITY?5-6 HOW DO I CONDUCT A “WHAT-IF” ANALYSIS WITH A SINGLE VARIABLE?5-7 HOW DO I CONDUCT A “WHAT-IF” ANALYSIS WITH DOUBLE VARIABLES?5-8 HOW DO I CALCULATE COST VARIANCES?5-9 HOW DO I CONDUCT A PROFITABILITY ANALYSIS FOR SERVICES?5-10 HOW ARE PROFITS AFFECTED BY THE NUMBER OF DAYS IN A MONTH?5-11 HOW DO I DECIDE WHICH RESEARCH AND DEVELOPMENT PROJECTS TO FUND?5-12 HOW DO I CREATE A THROUGHPUT ANALYSIS MODEL?5-13 HOW DO I DETERMINE WHETHER MORE VOLUME AT A LOWER PRICE CREATES MORE PROFIT?5-14 SHOULD I OUTSOURCE PRODUCTION?5-15 SHOULD I ADD STAFF TO THE BOTTLENECK OPERATION?5-16 SHOULD I PRODUCE A NEW PRODUCT?
Chapter 6: Payroll Decisions
6-1 HOW CAN I AUTOMATE TIME CLOCK DATA COLLECTION?6-2 HOW DO I COLLECT TIME INFORMATION BY TELEPHONE?6-3 HOW CAN I SIMPLIFY PAYROLL DEDUCTIONS?6-4 HOW DO EMPLOYEES ENTER THEIR OWN PAYROLL CHANGES?6-5 HOW DO I AUTOMATE PAYROLL FORM DISTRIBUTION?6-6 SHOULD I PAY EMPLOYEES VIA DIRECT DEPOSIT?6-7 HOW DO PAYCARDS COMPARE WITH PAYMENTS BY DIRECT DEPOSIT?6-8 WHAT ISSUES SHOULD I CONSIDER WHEN SETTING UP A PAYCARD PROGRAM?6-9 HOW DO I MAKE ELECTRONIC CHILD SUPPORT PAYMENTS?6-10 HOW DO I AUTOMATE PAYROLL REMITTANCES?6-11 SHOULD I OUTSOURCE PAYROLL?6-12 CAN I OUTSOURCE EMPLOYMENT VERIFICATIONS?6-13 CAN I OUTSOURCE BENEFITS ADMINISTRATION?6-14 HOW MANY PAYROLL CYCLES SHOULD I HAVE?6-15 HOW CAN I REDUCE THE NUMBER OF EMPLOYEE PAYROLL–RELATED INQUIRIES?
Chapter 7: Inventory Decisions
7-1 HOW DO I MANAGE INVENTORY ACCURACY?7-2 HOW DO I IDENTIFY OBSOLETE INVENTORY?7-3 HOW DO I DISPOSE OF OBSOLETE INVENTORY?7-4 HOW DO I SET UP A LOWER OF COST OR MARKET SYSTEM?7-5 WHICH INVENTORY COSTING SYSTEM SHOULD I USE?7-6 WHICH INVENTORY CONTROLS SHOULD I INSTALL?7-7 WHAT TYPES OF PERFORMANCE MEASUREMENTS SHOULD I USE?7-8 HOW DO I MAINTAIN SERVICE LEVELS WITH LOW INVENTORY?7-9 SHOULD I SHIFT INVENTORY OWNERSHIP TO SUPPLIERS?7-10 HOW DO I AVOID PRICE PROTECTION COSTS?
Chapter 8: Cost Allocation Decisions
8-1 WHAT IS THE BASIC METHOD FOR CALCULATING OVERHEAD?8-2 HOW DOES ACTIVITY-BASED COSTING WORK?8-3 HOW SHOULD I USE ACTIVITY-BASED COSTING?8-4 ARE THERE ANY PROBLEMS WITH ACTIVITY-BASED COSTING?8-5 HOW DO JUST-IN-TIME SYSTEMS IMPACT COST ALLOCATION?8-6 HOW DOES OVERHEAD ALLOCATION IMPACT AUTOMATED PRODUCTION SYSTEMS?8-7 HOW DOES OVERHEAD ALLOCATION IMPACT LOW-VOLUME PRODUCTS?8-8 HOW DOES OVERHEAD ALLOCATION IMPACT LOW-PROFIT PRODUCTS?8-9 HOW DO I ALLOCATE JOINT AND BYPRODUCT COSTS?
Chapter 9: Performance Responsibility Accounting Decisions
9-1 WHAT IS RESPONSIBILITY ACCOUNTING?9-2 WHAT ARE THE TYPES OF RESPONSIBILITY CENTERS?9-3 SHOULD ALLOCATED COSTS BE INCLUDED IN RESPONSIBILITY REPORTS?9-4 WHAT IS BALANCED SCORECARD REPORTING?9-5 HOW DOES BENCHMARKING WORK?
Chapter 10: Product Design Decisions
10-1 HOW DO I MAKE FUNDING DECISIONS FOR RESEARCH AND DEVELOPMENT PROJECTS?10-2 HOW DOES TARGET COSTING WORK?10-3 WHAT IS VALUE ENGINEERING?10-4 HOW DOES TARGET COSTING IMPACT PROFITABILITY?10-5 ARE THERE ANY PROBLEMS WITH TARGET COSTING?10-6 WHAT IS THE ACCOUNTANT'S ROLE IN A TARGET COSTING ENVIRONMENT?10-7 WHAT DATA IS NEEDED FOR A TARGET COSTING ANALYSIS?10-8 HOW DO I CONTROL THE TARGET COSTING PROCESS?10-9 UNDER WHAT SCENARIOS IS TARGET COSTING USEFUL?10-10 HOW CAN I INCORPORATE TARGET COSTING INTO THE BUDGET?10-11 HOW CAN I MEASURE THE SUCCESS OF A TARGET COSTING PROGRAM?
Chapter 11: Pricing Decisions
11-1 WHAT IS THE LOWEST PRICE THAT I SHOULD ACCEPT?11-2 HOW DO I SET LONG-RANGE PRICES?11-3 HOW SHOULD I SET PRICES OVER THE LIFE OF A PRODUCT?11-4 HOW DO I DETERMINE COST-PLUS PRICING?11-5 HOW SHOULD I SET PRICES AGAINST A PRICE LEADER?11-6 HOW DO I HANDLE A PRICE WAR?11-7 HOW DO I HANDLE PREDATORY PRICING BY A COMPETITOR?11-8 HOW DO I HANDLE DUMPING BY A FOREIGN COMPETITOR?11-9 WHEN IS TRANSFER PRICING IMPORTANT?11-10 HOW DO TRANSFER PRICES ALTER CORPORATE DECISION MAKING?11-11 WHAT TRANSFER PRICING METHOD SHOULD I USE?
Chapter 12: Quality Decisions
12-1 WHAT ARE THE VARIOUS TYPES OF QUALITY?12-2 HOW DO I CREATE A QUALITY REPORTING SYSTEM?12-3 WHAT IS THE COST OF SCRAP?12-4 HOW SHOULD I MEASURE POST-CONSTRAINT SCRAP?12-5 WHERE SHOULD I PLACE QUALITY REVIEW WORKSTATIONS?
Index

Content preview from Management Accounting Best Practices: A Guide for the Professional Accountant

Chapter 9 Performance Responsibility Accounting Decisions

A subtle issue that is completely overlooked by many accountants is the proper structuring of the reports that they issue to various company employees. In addition to the creation of a single, companywide set of financial statements, a considerable amount of attention should be paid to the creation of an underlying set of reports that target specific areas of responsibility, which may be at the levels of an entire division, a department, or perhaps a single machine cell. When creating such reports, the accountant may inquire about the nature of responsibility accounting, the types of responsibility centers for which reports are created, and what types of costs should be included or excluded from them. Ancillary issues involve whether a balanced scorecard or a benchmarking system should be used; in both cases, the information selected for inclusion in reports can have a significant impact on the resulting performance of a company.

This chapter discusses the answers to all of these questions. The following table itemizes the section number in which the answers to each question posed in this chapter can be found:

Section	Decision
9-1	What is responsibility accounting?
9-2	What are the types of responsibility centers?
9-3	Should allocated costs be included in responsibility reports?
9-4	What is balanced scorecard reporting?
9-5	How does benchmarking work?

9-1 WHAT IS RESPONSIBILITY ACCOUNTING?

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Management Accounting Best Practices: A Guide for the Professional Accountant

by Steven M. Bragg

Chapter 9

Performance Responsibility Accounting Decisions

9-1 WHAT IS RESPONSIBILITY ACCOUNTING?

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