Managerial Accounting / Edition 1

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The Bamber System of instruction replicates the classroom experience by providing more “I get it” moments outside of class. For Introductory, Undergraduate Managerial accounting course

We’ve talked to tons of Managerial Accounting instructors and our editors have even taken the Managerial accounting course (numerous times!) to figure out the following issue in this course that is consistent: Students understand (or “Get It”) right after you do a problem in class, but as soon as they leave class, with each passing hour, their ability to do the problems again and complete their homework diminishes to the point of them either having to come to office hours to get help, or they just quit and get behind in the course. On top of this, you can end up getting behind in the course, as well, in order to keep everyone on track. The Bamber system helps to recreate the “I Get It” moments outside of class keeping you and the students on track.

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Product Details

  • ISBN-13: 9780138129712
  • Publisher: Prentice Hall
  • Publication date: 12/12/2007
  • Edition description: Older Edition
  • Edition number: 1
  • Pages: 832
  • Product dimensions: 8.78 (w) x 10.92 (h) x 1.25 (d)

Table of Contents

Introduction to Management Accounting     2
Management Accounting: Information for Managers     4
Managers' Four Primary Responsibilities     4
A Road Map: How Does Management Accounting Fit In?     5
Management Accounting Versus Financial Accounting     6
The Management Accountant Within the Organization     8
Organizational Structure     8
The Changing Roles of Management Accountants     10
The Skills Required of Management Accountants     10
Professional Association     12
Ethics     12
Decision Guidelines     15
Summary Problem 1     17
Today's Business Environment     19
Sarbanes-Oxley Act of 2002     19
Shift Toward a Service Economy     20
Competing in the Global Marketplace     21
Time-Based Competition     21
Total Quality Management     23
Cost-Benefit Analysis     25
Decision Guidelines     26
Summary Problem 2     27
Review and Assignment Material     29
Building Blocks of Management Accounting     46
Three Business Sectors and the Value Chain     48
Service, Merchandising, andManufacturing Companies     48
Which Business Activities Make Up the Value Chain?     51
Determining the Costs to Serve a Customer or to Make a Product     53
Cost Objects, Direct Costs, and Indirect Costs     53
Product Costs for Internal Decision Making and External Reporting     55
Merchandising Companies' Inventoriable Product Cost     56
Manufacturing Companies' Inventoriable Product Cost     57
Prime and Conversion Costs     59
Direct and Indirect Labor Compensation     59
Review: Inventoriable Product Costs or Period Costs?     60
Decision Guidelines     61
Summary Problem 1     62
Inventoriable Product Costs and Period Costs in Financial Statements     63
Service Companies     63
Merchandising Companies     63
Manufacturing Companies     64
Effects on the Balance Sheet     67
Other Cost Terms for Planning and Decision Making     68
Controllable Versus Uncontrollable Costs     68
Relevant and Irrelevant Costs     70
Fixed and Variable Costs     71
Total, Average, and Marginal Costs     72
Decision Guidelines     74
Summary Problem 2      75
Review and Assignment Material     76
Job Costing     100
Full Product Costs: A Brief Overview     103
How Much Does It Cost to Make a Product? Two Approaches     104
Process Costing     104
Job Costing     104
Job Costing: Accounting for Materials and Labor     107
Accounting for Materials     108
Accounting for Manufacturing Labor     111
Decision Guidelines     114
Summary Problem 1     115
Job Costing: Allocating Manufacturing Overhead     117
Allocating Manufacturing Overhead to Jobs     118
Six Steps in Allocating Manufacturing Overhead     119
Accounting for Completion and Sale of Finished Goods and Closing Manufacturing Overhead     122
Accounting for Completion and Sale of Finished Goods     122
Closing Manufacturing Overhead to Adjust for Underallocated or Overallocated Manufacturing Overhead     123
Overview of Job Costing in a Manufacturing Company     126
How Information Technology Has Changed Job Costing     127
Assigning Noninventoriable Costs     128
Noninventoriable Costs in Manufacturing Companies     128
Noninventoriable Costs and Job Costing in Nonmanufacturing Companies      128
Decision Guidelines     131
Summary Problem 2     133
Review and Assignment Material     136
Chapter 3 Demo Doc: Job Costing for Manufacturers
Process Costing     158
Process Costing: An Overview     160
Two Basic Costing Systems: Job Costing and Process Costing     160
How Does the Flow of Costs Differ Between Job and Process Costing?     161
Building Blocks of Process Costing     165
Conversion Costs     165
Equivalent Units     165
Inventory Flow Assumptions     167
Illustrating Process Costing in the First Processing Department     167
Summarize the Flow of Physical Units     169
Compute Output in Terms of Equivalent Units     169
Summarize Total Costs to Account For     171
Compute the Cost per Equivalent Unit     172
Assign Total Costs to Units Completed and to Units in Ending Work in Process Inventory     172
Decision Guidelines     174
Summary Problem 1     176
Process Costing in a Second Processing Department     178
Process Costing in Sea View's Insertion Department     178
Summarize the Flow of Physical Units and Compute Output in Terms of Equivalent Units      180
Summarize Total Costs to Account For and Compute the Cost per Equivalent Unit     181
Assign Total Costs to Units Completed and to Units in Ending Work in Process Inventory     182
How Managers Use a Production Cost Report     185
Decision Guidelines     186
Summary Problem 2     188
Review and Assignment Material     190
Chapter 4 Demo Doc: Illustrating Process Costing
Activity-Based Costing and Other Cost Management Tools     212
Refining Cost Systems     214
Why Managers Need More Accurate Cost Systems     215
Sharpening the Focus: From Business Functions to Departments to Activities     216
Activity-Based Costing     218
Developing an ABC System     219
Traditional Versus ABC Systems: Chemtech     220
Activity-Based Management: Using ABC for Decision Making     224
Pricing and Product Mix Decisions     224
Cutting Costs     226
Routine Planning and Control Decisions     226
Using ABC in Merchandising and Service Companies     226
When Does ABC Pass the Cost-Benefit Test?     227
The Cost-Benefit Test     227
Signs That the Old Cost System May Be Broken     228
Decision Guidelines     228
Summary Problem 1     230
Traditional Versus Just-in-Time Systems     232
Traditional Systems     232
Just-in-Time Systems     233
Features of JIT Costing     235
Example of JIT Costing     235
Continuous Improvement and the Management of Quality     237
Types of Quality Costs     238
Deciding Whether to Adopt a New Quality Program     239
Decision Guidelines     240
Summary Problem 2     241
Review and Assignment Material     242
Cost Behavior     264
Cost Behavior: How Do Changes in Volume Affect Costs?     266
Variable Costs     267
Fixed Costs     270
Mixed Costs     271
Relevant Range     274
Other Cost Behaviors     275
Decision Guidelines     276
Summary Problem 1     278
Determining Cost Behavior     279
Account Analysis     279
High-Low Method     280
Regression Analysis     282
Using the Results of High-Low Method and Regression Analysis to Predict Costs     284
Data Concerns     285
The Contribution Margin Income Statement: A Summary of Cost Behavior     285
Decision Guidelines     287
Summary Problem 2     288
Variable Costing and Absorption Costing     291
Decision Guidelines     297
Summary Problem 3     298
Review and Assignment Material     300
Cost-Volume-Profit Analysis     316
How Does Cost-Volume-Profit Analysis Help Managers?     318
Data Required for Effective CVP Analysis     318
CVP Assumptions     319
The Unit Contribution Margin     320
The Contribution Margin Ratio     321
Using CVP Analysis to Find the Breakeven Point     322
The Income Statement Approach     325
Shortcut Approach Using the Unit Contribution Margin     323
Shortcut Approach Using the Contribution Margin Ratio     324
Using CVP to Plan Profits     325
How Much Must We Sell to Earn a Target Profit?     325
Graphing CVP Relationships     326
Decision Guidelines     328
Summary Problem 1     330
Using CVP When Business Conditions Change     332
Changing the Sale Price     332
Changing Variable Costs      333
Changing Fixed Costs     335
Effect of Sales Mix on CVP Analysis     336
Information Technology and Sensitivity Analysis     340
Risk Indicators     340
Margin of Safety     340
Operating Leverage     341
Decision Guidelines     345
Summary Problem 2     346
Review and Assignment Material     348
Chapter 7 Demo Doc: Using CVP for Sensitivity Analysis
Short-Term Business Decisions     368
How Managers Make Decisions     370
Relevant Information     371
Relevant Nonfinancial Information     372
Keys to Making Short-Term Special Decisions     372
Special Sales Order and Regular Pricing Decisions     373
When to Accept a Special Sales Order     374
How to Set Regular Prices     376
Decision Guidelines     382
Summary Problem 1     383
Other Short-Term Special Business Decisions     385
When to Drop Products, Departments, or Territories     385
Product Mix: Which Product to Emphasize?     388
When to Outsource     391
Sell As Is or Process Further?     394
Decision Guidelines     397
Summary Problem 2     398
Review and Assignment Material     400
Capital Investment Decisions and the Time Value of Money     422
Capital Budgeting     424
Four Popular Methods of Capital Budgeting Analysis     424
Focus on Cash Flows     425
Capital Budgeting Process     425
Using Payback and Accounting Rate of Return to Make Capital Investment Decisions     426
Payback Period     426
Accounting Rate of Return (ARR)     429
Decision Guidelines     432
Summary Problem 1     433
A Review of the Time Value of Money     434
Factors Affecting the Time Value of Money     434
Future Values and Present Values: Points Along the Time Continuum     435
Future Value and Present Value Factors     436
Calculating Future Values of Single Sums and Annuities Using FV Factors     436
Calculating Present Values of Single Sums and Annuities Using PV Factors     438
Using Discounted Cash-Flow Models to Make Capital Budgeting Decisions     441
Net Present Value (NVP)     442
Internal Rate of Return (IRR)     446
Comparing Capital Budgeting Methods     448
Decision Guidelines     450
Summary Problem 2     451
Review and Assignment Material     452
Present Value Tables and Future Value Tables     9A-1
The Master Budget and Responsibility Accounting     466
Why Managers Use Budgets     468
Using Budgets to Plan and Control     469
Benefits of Budgeting     470
Preparing the Master Budget     472
Components of the Master Budget     472
Data for Whitewater Sporting Goods' Master Budget     473
Preparing the Operating Budget     475
The Sales Budget     475
The Inventory, Purchases, and Cost of Goods Sold Budget     476
The Operating Expenses Budget     476
The Budgeted Income Statement     477
Summary Problem 1     478
Preparing the Financial Budget     480
Preparing the Cash Budget     480
The Budgeted Balance Sheet     483
The Budgeted Statement of Cash Flows     483
Getting Employees to Accept the Budget     483
Using Information Technology for Sensitivity Analysis and Rolling Up Unit Budgets     484
Sensitivity Analysis     485
Rolling Up Individual Unit Budgets into the Companywide Budget     486
Responsibility Accounting      487
Four Types of Responsibility Centers     487
Responsibility Accounting Performance Reports     489
Decision Guidelines     492
Summary Problem 2     493
Review and Assignment Material     497
Chapter 10 Demo Doc: Master Budget
Flexible Budgets and Standard Costs     518
How Managers Use Flexible Budgets     520
What Is a Flexible Budget?     521
Graphing the Flexible Budget     522
Using the Flexible Budget to See Why Actual Results Differ from the Static Budget     524
Decision Guidelines     528
Summary Problem 1     530
Standard Costs     531
Using Standard Costs to Analyze Direct Material and Direct Labor Variances     533
Direct Material Variances     535
Direct Labor Variances     539
Price and Efficiency Variances: Three Common Pitfalls     542
Using Variances     543
Using Standard Costs to Analyze Manufacturing Overhead Variances     544
Overhead Flexible Budget Variance     544
Production Volume Variance     545
Standard Cost Accounting Systems     547
Journal Entries     547
Standard Cost Income Statement for Management     550
Decision Guidelines     553
Summary Problem 2     554
Review and Assignment Material     557
Performance Evaluation and the Balanced Scorecard     578
Decentralized Operations     580
Advantages of Decentralization     580
Disadvantages of Decentralization     581
Responsibility Centers     581
Performance Measurement     582
Goals of Performance Evaluation Systems     582
Limitations of Financial Performance Measurement     584
The Balanced Scorecard     584
The Four Perspectives of the Balanced Scorecard     585
Decision Guidelines     590
Summary Problem 1     591
Measuring the Financial Performance of Cost, Revenue, and Profit Centers     592
Measuring the Financial Performance of Investment Centers     595
Return on Investment (ROI)     596
Residual Income (RI)     599
Economic Value Added (EVA)     600
Limitations of Financial Performance Measures     601
Decision Guidelines     604
Summary Problem 2     605
Allocating Service Department Costs     607
Review and Assignment Material      609
Financial Statement Analysis     624
Methods of Analysis     627
Horizontal Analysis     628
Illustration: Google Inc.     628
Horizontal Analysis of the Income Statement     628
Horizontal Analysis of the Balance Sheet     630
Vertical Analysis     631
Illustration: Google Inc.     631
How Do We Compare One Company with Another?     632
Benchmarking     633
Benchmarking Against a Key Competitor     633
Benchmarking Against the Industry Average     633
Summary Problem 1     635
Using Ratios to Make Decisions     637
Measuring Ability to Pay Current Liabilities     637
Measuring Ability to Sell Inventory and Collect Receivables     639
Measuring Ability to Pay Long-Term Debt     641
Measuring Profitability     642
Analyzing Stock Investments     644
Red Flags in Financial Statement Analysis     646
Decision Guidelines     647
Summary Problem 2     649
Review and Assignment Material     651
Photo Credits     PC-1
Glindex (combined Glossary/Index)     G-1
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