Cornerstones of cost accounting

Brief Contents......Page 7
Contents......Page 8
Cornerstones-The Foundation for Successful Learning......Page 14
Features of the First Canadian Edition......Page 16
Acknowledgments and Thanks......Page 18
About the Authors......Page 19
Part 1: Planning......Page 21
  Financial Accounting versus Cost Management Accounting: A Systems Framework......Page 22
  A Systems Framework......Page 23
  Factors Affecting Cost Management......Page 26
  Cost Assignment: Direct Tracing, Driver Tracing, and Cost Allocation......Page 29
  Product and Service Costs......Page 31
  Financial Statements......Page 36
  Ethical Behaviour......Page 42
  Summary of Learning Objectives......Page 46
  Review Problems......Page 47
  Key Terms......Page 49
  Cornerstone Exercises......Page 50
  Exercises......Page 53
  Problems......Page 59
  CMA Problems......Page 62
 Ch 2: Cost Behaviour......Page 65
  Basics of Cost Behaviour......Page 66
  Resources, Capacity and Cost Behaviour......Page 72
  Quantitative Methods for Separating Mixed Costs......Page 77
  Reliability of Cost Formulas......Page 85
  Methods of Determining Cost Behaviour......Page 86
  Managerial Judgment......Page 87
  Multiple Regression......Page 89
  The Learning Curve and Nonlinear Cost Behaviour......Page 90
  Summary of Learning Objectives......Page 95
  Review Problems......Page 96
  Key Terms......Page 98
  Cornerstone Exercises......Page 99
  Exercises......Page 103
  Problems......Page 111
  CMA Problem......Page 118
 Ch 3: Cost-Volume-Profit Analysis......Page 120
  The Break-Even Point and Target Profit in Units and Sales Revenue......Page 121
  After-Tax Profit Targets......Page 129
  Multiple-Product Analysis......Page 131
  Graphical Representation of CVP Relationships......Page 136
  Changes in the CVP Variables......Page 140
  CVP Analysis and Non-Unit Cost Drivers......Page 146
  Summary of Learning Objectives......Page 150
  Review Problems......Page 151
  Discussion Questions......Page 153
  Cornerstone Exercises......Page 154
  Exercises......Page 157
  Problems......Page 162
  CMA Problems......Page 168
  Manufacturing Firms versus Service Firms......Page 171
  Setting Up the Cost Accounting System......Page 176
  The Job-Order Costing Overview......Page 180
  Job-Order Costing: Specific Description......Page 184
  Accounting for Spoiled Units in a Traditional Job-Order Costing System......Page 194
  Summary of Learning Objectives......Page 197
  Review Problem......Page 199
  Key Terms......Page 200
  Cornerstone Exercises......Page 201
  Exercises......Page 203
  Problems......Page 209
  CMA Problem......Page 216
  Integrative Exercise 1......Page 218
Part 2: Costing......Page 223
  Basic Operational and Cost Concepts......Page 224
  Process Costing with No Work-in-Process Inventories......Page 229
  Process Costing with Ending Work-in-Process Inventories......Page 231
  FIFO Costing Method......Page 236
  Weighted Average Costing Method......Page 242
  Treatment of Transferred-in Goods......Page 248
  Operation Costing......Page 251
  Summary of Learning Objectives......Page 255
  Appendix: Spoiled Units......Page 256
  Review Problem......Page 258
  Key Terms......Page 260
  Cornerstone Exercises......Page 261
  Exercises......Page 265
  Problems......Page 270
  CMA Problem......Page 277
 Ch 6: Activity-Based Costing......Page 278
  Unit-Based Product Costing......Page 279
  Limitations of Plantwide and Departmental Rates......Page 283
  Activity-Based Costing System......Page 291
  Reducing the Size and Complexity of an ABC System......Page 300
  Summary of Learning Objectives......Page 308
  Review Problem......Page 310
  Cornerstone Exercises......Page 312
  Exercises......Page 317
  Problems......Page 324
  CMA Problem......Page 332
  An Overview of Cost Allocation......Page 334
  Allocating One Department\'s Costs to Other Departments......Page 339
  Allocating Multiple Support Department Costs to Other Departments......Page 347
  Outsourcing Support Department Costs......Page 355
  Accounting for Joint Production Processes......Page 357
  Summary of Learning Objectives......Page 369
  Review Problems......Page 371
  Discussion Questions......Page 375
  Cornerstone Exercises......Page 376
  Exercises......Page 380
  Problems......Page 385
  CMA Problems......Page 388
  The Role of Budgeting in Planning and Control......Page 391
  The Budgeting Process......Page 393
  Preparing the Operating Budget......Page 396
  Preparing the Financial Budget......Page 410
  Flexible Budgets versus Static Budget......Page 418
  Activity-Based Budgets......Page 423
  The Behavioural Dimension of Budgeting......Page 427
  Summary of Learning Objectives......Page 430
  Review Problems......Page 432
  Key Terms......Page 435
  Cornerstone Exercises......Page 436
  Exercises......Page 441
  Problems......Page 448
  CMA Problems......Page 451
  Developing Unit Input Standards......Page 455
  Standard Cost Sheets......Page 458
  Variance Analysis for Direct Materials and Direct Labour......Page 459
  Variance Analysis for Overhead Costs......Page 470
  Mix and Yield Variances: Materials and Labour......Page 484
  Summary of Learning Objectives......Page 488
  Review Problem......Page 490
  Cornerstone Exercises......Page 492
  Exercises......Page 496
  Problems......Page 499
  CMA Problems......Page 505
  Responsibility Accounting......Page 509
  Decentralization......Page 511
  Measuring Divisional Performance of Investment Centres......Page 513
  Measuring and Rewarding the Performance of Managers......Page 525
  Transfer Pricing......Page 528
  Setting Transfer Prices......Page 529
  Summary of Learning Objectives......Page 541
  Review Problems......Page 543
  Key Terms......Page 544
  Cornerstone Exercises......Page 545
  Exercises......Page 547
  Problems......Page 552
  CMA Problems......Page 557
  Integrative Exercise 2......Page 561
Part 3: Control......Page 567
  Tactical Decision Making......Page 568
  Relevant Costs and Revenues......Page 571
  The Activity Resource Usage Model......Page 573
  Illustrative Examples of Tactical Decision Making......Page 574
  Summary of Learning Objectives......Page 587
  Review Problem......Page 588
  Discussion Questions......Page 589
  Cornerstone Exercises......Page 590
  Exercises......Page 592
  Problems......Page 599
  CMA Problems......Page 605
  Basic Pricing Concepts......Page 607
  Cost and Pricing Policies......Page 610
  The Legal System and Pricing......Page 613
  The Product Life Cycle......Page 617
  Measuring Profit......Page 619
  Analysis of Profit-Related Variances......Page 629
  Limitations of Profit Measurement......Page 636
  Summary of Learning Objectives......Page 637
  Review Problems......Page 640
  Discussion Questions......Page 644
  Cornerstone Exercises......Page 645
  Exercises......Page 648
  Problems......Page 652
  CMA Problems......Page 659
 Ch 13: Strategic Cost Management......Page 663
  Strategic Cost Management: Basic Concepts......Page 664
  Internal Value Chain......Page 669
  Life-Cycle Cost Management......Page 675
  Just-in-Time (JIT) Manufacturing and Purchasing......Page 684
  JIT and Its Effect on the Cost Management System......Page 688
  Summary of Learning Objectives......Page 693
  Review Problems......Page 694
  Discussion Questions......Page 697
  Cornerstone Exercises......Page 698
  Exercises......Page 701
  Problems......Page 707
  CMA Problem......Page 720
 Ch 14: Activity-Based Management......Page 722
  The Relationship of Activity-Based Costing and Activity-Based Management......Page 723
  Process Dimension: Process Value Analysis......Page 724
  Cost Dimension: Financial Measures of Activity Efficiency......Page 728
  Implementing Activity-Based Management......Page 739
  Activity-Based Responsibility Accounting......Page 743
  Summary of Learning Objectives......Page 747
  Review Problems......Page 748
  Discussion Questions......Page 750
  Cornerstone Exercises......Page 751
  Exercises......Page 753
  Problems......Page 758
  CMA Problem......Page 764
  Integrative Exercise 3......Page 766
Part 4: Strategic Cost Management......Page 769
 Ch 15: The Balanced Scorecard: Strategic-Based Control......Page 770
  Activity-Based versus Strategic-Based Responsibility Accounting......Page 771
  Basic Concepts of the Balanced Scorecard......Page 775
  Linking Measures to Strategy......Page 784
  Strategic Alignment......Page 785
  Summary of Learning Objectives......Page 787
  Review Problems......Page 788
  Discussion Questions......Page 789
  Exercises......Page 790
  Problems......Page 794
  CMA Problem......Page 799
 Ch 16: Quality and Environmental Cost Management......Page 801
  Quality Defined......Page 802
  Reporting Quality Costs......Page 807
  Quality Cost Information and Decision Making......Page 810
  Controlling Quality Costs......Page 813
  Defining, Measuring, and Controlling Environmental Costs......Page 819
  Assigning Environmental Costs to Products and Processes......Page 828
  Summary of Learning Objectives......Page 831
  Review Problems......Page 832
  Discussion Questions......Page 834
  Cornerstone Exercises......Page 835
  Exercises......Page 838
  Problems......Page 846
  CMA Problem......Page 857
 Ch 17: Lean Accounting and Productivity Measurement......Page 858
  Lean Manufacturing......Page 859
  Lean Accounting......Page 865
  Productivity......Page 872
  Summary of Learning Objectives......Page 879
  Review Problems......Page 880
  Discussion Questions......Page 882
  Cornerstone Exercises......Page 883
  Exercises......Page 885
  Problems......Page 890
  CMA Problem......Page 894
  Integrative Exercise 4......Page 895
Glossary......Page 899
Check Figures......Page 911
Index......Page 915