Horngren's cost accounting : a managerial emphasis

Cover
Title Page
Copyright
Brief Contents
Contents
About the Authors
Preface
1. The Manager and Management Accounting
	For Coca-Cola, Smaller Sizes Mean Bigger Profits
	Financial Accounting, Management Accounting, and Cost Accounting
	Strategic Decisions and the Management Accountant
	Value-Chain and Supply-Chain Analysis and Key Success Factors
		Value-Chain Analysis
		Supply-Chain Analysis
		Key Success Factors
		Concepts in Action: Cost Leadership at Costco: Rock-Bottom Prices and Sky-High Profits
	Decision Making, Planning, and Control: The Five-Step Decision-Making Process
	Key Management Accounting Guidelines
		Cost–Benefit Approach
		Behavioral and Technical Considerations
		Different Costs for Different Purposes
	Organization Structure and the Management Accountant
		Line and Staff Relationships
		The Chief Financial Officer and the Controller
		Management Accounting Beyond the Numbers
	Professional Ethics
		Institutional Support
		Typical Ethical Challenges
	Problem for Self-Study
	Decision Points
	Terms to Learn
	Assignment Material
		Questions
		Multiple-Choice Questions
		Exercises
		Problems
2. An Introduction to Cost Terms and Purposes
	High Fixed Costs Bankrupt Aéropostale
	Costs and Cost Terminology
	Direct Costs and Indirect Costs
		Cost Allocation Challenges
		Factors Affecting Direct/Indirect Cost Classifications
	Cost-Behavior Patterns: Variable Costs and Fixed Costs
		Concepts in Action: Lyft Helps Hospitals Reduce Their Fixed Transportation Costs
		Cost Drivers
		Relevant Range
		Relationships Between Types of Costs
	Total Costs and Unit Costs
		Unit Costs
		Use Unit Costs Cautiously
	Business Sectors, Types of Inventory, Inventoriable Costs, and Period Costs
		Manufacturing-, Merchandising-, and Service-Sector Companies
		Types of Inventory
		Commonly Used Classifications of Manufacturing Costs
		Inventoriable Costs
		Period Costs
	Illustrating the Flow of Inventoriable Costs and Period Costs
		Manufacturing-Sector Example
		Recap of Inventoriable Costs and Period Costs
		Prime Costs and Conversion Costs
	Measuring Costs Requires Judgment
		Labor Costs
		Benefits of Defining Accounting Terms
		Different Meanings of Product Costs
	A Framework for Cost Accounting and Cost Management
		Calculating the Cost of Products, Services, and Other Cost Objects
		Obtaining Information for Planning and Control and Performance Evaluation
		Analyzing the Relevant Information for Making Decisions
	Problem for Self-Study
	Decision Points
	Terms to Learn
	Assignment Material
		Questions
		Multiple-Choice Questions
		Exercises
		Problems
3. Cost–Volume–Profit Analysis
	How Coachella Tunes Up the Sweet Sound of Profits
	Essentials of CVP Analysis
		Contribution Margin
		Expressing CVP Relationships
		Cost–Volume–Profit Assumptions
	Breakeven Point and Target Operating Income
		Breakeven Point
		Target Operating Income
	Income Taxes and Target Net Income
	Using CVP Analysis for Decision Making
		Decision to Advertise
		Decision to Reduce the Selling Price
		Determining Target Prices
		Concepts in Action: Can Cost–Volume–Profit Analysis Help Whole Foods Escape the “Whole Paycheck” Trap?
	Sensitivity Analysis and Margin of Safety
	Cost Planning and CVP
		Alternative Fixed-Cost/Variable-Cost Structures
		Operating Leverage
	Effects of Sales Mix on Income
	CVP Analysis in Service and Not-for-Profit Organizations
	Contribution Margin Versus Gross Margin
	Problem for Self-Study
	Decision Points
	Appendix: Decision Models and Uncertainty
	Terms to Learn
	Assignment Material
		Questions
		Multiple-Choice Questions
		Exercises
		Problems
4. Job Costing
	Job Costing and the New Golden State Warriors Arena
	Building-Block Concepts of Costing Systems
	Job-Costing and Process-Costing Systems
	Job Costing: Evaluation and Implementation
		Time Period Used to Compute Indirect-Cost Rates
		Normal Costing
	General Approach to Job Costing Using Normal Costing
		Concepts in Action: Better Job Costing Through Big Data and Data Analytics
		The Role of Technology
	Actual Costing
	A Normal Job-Costing System in Manufacturing
		General Ledger
		Explanations of Transactions
		Subsidiary Ledgers
		Materials Records by Type of Material
		Labor Records by Employee
		Manufacturing Department Overhead Records by Month
		Work-in-Process Inventory Records by Jobs
		Finished Goods Inventory Records by Jobs
		Other Subsidiary Records
		Nonmanufacturing Costs and Job Costing
	Budgeted Indirect Costs and End-of-Accounting-Year Adjustments
		Underallocated and Overallocated Indirect Costs
		Adjusted Allocation-Rate Approach
		Proration Approach
		Write-Off to Cost of Goods Sold Approach
		Choosing Among Approaches
	Variations of Normal Costing: A Service-Sector Example
	Problem for Self-Study
	Decision Points
	Terms to Learn
	Assignment Material
		Questions
		Multiple-Choice Questions
		Exercises
		Problems
5. Activity-Based Costing and Activity-Based Management
	Activity-Based Costing and the True Cost of Data Breaches
	Broad Averaging and Its Consequences
		Undercosting and Overcosting
		Product-Cost Cross-Subsidization
		Simple Costing System at Plastim Corporation
		Design, Manufacturing, and Distribution Processes
		Simple Costing System Using a Single Indirect-Cost Pool
		Applying the Five-Step Decision-Making Process at Plastim
	Refining a Costing System
		Developments That Have Increased the Demand for Refining Costing Systems
		Guidelines for Refining a Costing System
	Activity-Based Costing Systems
		Plastim’s ABC System
	Cost Hierarchies
	Implementing Activity-Based Costing
		Implementing ABC at Plastim
		Comparing Alternative Costing Systems
	Considerations in Implementing Activity-Based Costing Systems
		Benefits and Costs of Activity-Based Costing Systems
		ABC in Service and Merchandising Companies
		Behavioral Issues in Implementing Activity-Based Costing Systems
		Concepts in Action: Mayo Clinic Uses Time-Driven Activity-Based Costing to Reduce Costs and ImproveCare
	Activity-Based Management
		Pricing and Product-Mix Decisions
		Cost Reduction and Process Improvement Decisions
		Design Decisions
		Planning and Managing Activities
	Problem for Self-Study
	Decision Points
	Terms to Learn
	Assignment Material
		Questions
		Multiple-Choice Questions
		Exercises
		Problems
6. Master Budget and Responsibility Accounting
	“Scrimping” at the Ritz: Master Budgets
	Budgets and the Budgeting Cycle
		Strategic Plans and Operating Plans
		Budgeting Cycle and Master Budget
	Advantages and Challenges of Implementing Budgets
		Promoting Coordination and Communication
		Providing a Framework for Judging Performance and Facilitating Learning
		Motivating Managers and Other Employees
		Challenges in Administering Budgets
	Developing an Operating Budget
		Time Coverage of Budgets
		Steps in Preparing an Operating Budget
	Financial Planning Models and Sensitivity Analysis
		Concepts in Action: P.F. Chang’s and Internet-Based Budgeting
	Budgeting and Responsibility Accounting
		Organization Structure and Responsibility
		Feedback
		Responsibility and Controllability
	Human Aspects of Budgeting
		Budgetary Slack
		Stretch Targets
		Kaizen Budgeting
		Budgeting for Reducing Carbon Emissions
	Budgeting in Multinational Companies
	Problem for Self-Study
	Decision Points
	Appendix: The Cash Budget
	Terms to Learn
	Assignment Material
		Questions
		Multiple-Choice Questions
		Exercises
		Problems
7. Flexible Budgets, Direct-Cost Variances, and Management Control
	Walmart’s Fleet Goes Green to Reduce Standard Costs
	Static Budgets and Variances
		The Use of Variances
		Static Budgets and Static-Budget Variances
	Flexible Budgets
	Flexible-Budget Variances and Sales-Volume Variances
		Sales-Volume Variances
		Flexible-Budget Variances
	Standard Costs for Variance Analysis
		Obtaining Budgeted Input Prices and Budgeted Input Quantities
	Price Variances and Efficiency Variances for Direct-Cost Inputs
		Price Variances
		Efficiency Variance
		Journal Entries Using Standard Costs
		Implementing Standard Costing
	Management’s Use of Variances
		Concepts in Action Can Chipotle Wrap Up Its Materials-Cost Increases?
		Multiple Causes of Variances
		When to Investigate Variances
		Using Variances for Performance Measurement
		Using Variances for Organization Learning
		Using Variances for Continuous Improvement
		Financial and Nonfinancial Performance Measures
	Benchmarking and Variance Analysis
	Problem for Self-Study
	Decision Points
	Appendix: Mix and Yield Variances for Substitutable Inputs
	Terms to Learn
	Assignment Material
		Questions
		Multiple-Choice Questions
		Exercises
		Problems
8. Flexible Budgets, Overhead Cost Variances, and Management Control
	Managing Overhead Costs at Wework
	Planning of Variable and Fixed Overhead Costs
		Planning Variable Overhead Costs
		Planning Fixed Overhead Costs
	Standard Costing at Webb Company
		Developing Budgeted Variable Overhead Rates
		Developing Budgeted Fixed Overhead Rates
	Variable Overhead Cost Variances
		Flexible-Budget Analysis
		Variable Overhead Efficiency Variance
		Variable Overhead Spending Variance
		Journal Entries for Variable Overhead Costs and Variances
	Fixed Overhead Cost Variances
		Production-Volume Variance
		Interpreting the Production-Volume Variance
		Concepts in Action: Variance Analysis and Standard Costing Help Sandoz Manage Its Overhead Costs
		Journal Entries for Fixed Overhead Costs and Variances
	Integrated Analysis of Overhead Cost Variances
		4-Variance Analysis
		Combined Variance Analysis
	Production-Volume Variance and Sales-Volume Variance
	Variance Analysis and Activity-Based Costing
		Flexible Budget and Variance Analysis for Direct Materials-Handling Labor Costs
		Flexible Budget and Variance Analysis for Fixed Setup Overhead Costs
	Overhead Variances in Nonmanufacturing Settings
		Financial and Nonfinancial Performance Measures
	Problem for Self-Study
	Decision Points
	Terms to Learn
	Assignment Material
		Questions
		Multiple-Choice Questions
		Exercises
		Problems
9. Inventory Costing and Capacity Analysis
	Under Armour Races to Defeat Its Inventory Backlog
	Variable and Absorption Costing
		Variable Costing
		Absorption Costing
		Comparing Variable and Absorption Costing
	Variable Versus Absorption Costing: Operating Income and Income Statements
		Comparing Income Statements for One Year
		Comparing Income Statements for Multiple Years
		Variable Costing and the Effect of Sales and Production on Operating Income
	Absorption Costing and Performance Measurement
		Undesirable Buildup of Inventories
		Proposals for Revising Performance Evaluation
	Comparing Inventory Costing Methods
		Throughput Costing
		A Comparison of Alternative Inventory-Costing Methods
	Denominator-Level Capacity Concepts and Fixed-Cost Capacity Analysis
		Absorption Costing and Alternative Denominator-Level Capacity Concepts
		Effect on Budgeted Fixed Manufacturing Cost Rate
	Choosing a Capacity Level
		Product Costing and Capacity Management
		Pricing Decisions and the Downward Demand Spiral
		Concepts in Action: Can ESPN Avoid the Cord-Cutting “Death Spiral”?
		Performance Evaluation
		Financial Reporting
		Tax Requirements
	Planning and Control of Capacity Costs
		Difficulties in Forecasting Chosen Capacity Levels
		Difficulties in Forecasting Fixed Manufacturing Costs
		Nonmanufacturing Costs
		Activity-Based Costing
	Problem for Self-Study
	Decision Points
	Appendix: Breakeven Points in Variable Costing and Absorption Costing
	Terms to Learn
	Assignment Material
		Questions
		Multiple-Choice Questions
		Exercises
		Problems
10. Determining How Costs Behave
	Southwest Uses “Big Data Analytics” to Reduce Fuel Consumption and Costs
	Basic Assumptions and Examples of Cost Functions
		Basic Assumptions
		Linear Cost Functions
		Review of Cost Classification
	Identifying Cost Drivers
		The Cause-and-Effect Criterion
		Cost Drivers and the Decision-Making Process
	Cost Estimation Methods
		Industrial Engineering Method
		Conference Method
		Account Analysis Method
		Quantitative Analysis Method
	Estimating a Cost Function Using Quantitative  Analysis
		High-Low Method
		Regression Analysis Method
	Evaluating and Choosing Cost Drivers
		Cost Drivers and Activity-Based Costing
	Nonlinear Cost Functions
		Learning Curves
		Cumulative Average-Time Learning Model
		Incremental Unit-Time Learning Model
		Incorporating Learning-Curve Effects Into Prices and Standards
		Concepts in Action: Learning Curves and the Falling Price of Renewable Energy
	Data Collection and Adjustment Issues
	Problem for Self-Study
	Decision Points
	Appendix: Regression Analysis
	Terms to Learn
	Assignment Material
		Questions
		Multiple-Choice Questions
		Exercises
		Problems
11. Data Analytic Thinking and Prediction
	Predictive Analytics Inside: How Intel Drives Value and Speeds Time to Market
	Data Science Basics and Management Accounting
		Outcome Prediction
		Value Creation
		Data Science Framework
		Concepts in Action: Carnival Uses Big Data and Machine Learning to Sail Toward Greater Profitability
	Defining the Problem and the Relevant Data
		Step 1: Gain a Business Understanding of the Problem
		Step 2: Obtain and Explore Relevant Data
		Step 3: Prepare the Data
	Data Algorithms and Models
		Step 4: Build a Model
	Refining the Decision Tree
		Overfitting
		Pruning
	Validating and Choosing Models
		Cross-Validation Using Prediction Accuracy to Choose Between Full and Pruned Decision Trees
		Using Maximum Likelihood Values to Choose Between Fully Grown and Pruned Decision Trees
		Testing the Pruned Decision-Tree Model on the Holdout Sample
	Evaluating Data Science Models
		Step 5: Evaluate the Model
		Step 6: Visualize and Communicate Insights
		Working With PeerLend Digital Data
	Using Data Science Models
		Step 7: Deploy the Model
	Problem for Self-Study
	Decision Points
	Terms to Learn
	Assignment Material
		Questions
		Multiple-Choice Questions
		Exercises
		Problems
12. Decision Making and Relevant Information
	Relevant Costs and Broadway Shows
	Information and the Decision Process
	The Concept of Relevance
		Relevant Costs and Relevant Revenues
		Qualitative and Quantitative Relevant Information
		One-Time-Only Special Orders
		Potential Problems in Relevant-Cost Analysis
		Short-Run Pricing Decisions
	Insourcing-Versus-Outsourcing and Make-or-Buy Decisions
		Outsourcing and Idle Facilities
		Strategic and Qualitative Factors
		International Outsourcing
		The Total Alternatives Approach
		Concepts in Action: Starbucks Brews Up Domestic Production
		The Opportunity-Cost Approach
		Carrying Costs of Inventory
	Product-Mix Decisions With Capacity Constraints
	Bottlenecks, Theory of Constraints, and Throughput-Margin Analysis
	Customer Profitability and Relevant Costs
		Relevant-Revenue and Relevant-Cost Analysis of Dropping a Customer
		Relevant-Revenue and Relevant-Cost Analysis ofAdding a Customer
		Relevant-Revenue and Relevant-Cost Analysis of Closing or Adding Branch Offices or Business Divisions
	Irrelevance of Past Costs and Equipment-Replacement Decisions
	Decisions and Performance Evaluation
	Problem for Self-Study
	Decision Points
	Appendix: Linear Programming
	Terms to Learn
	Assignment Material
		Questions
		Multiple-Choice Questions
		Exercises
		Problems
13. Strategy, Balanced Scorecard, and Strategic Profitability Analysis
	Barclays Turns to the Balanced Scorecard
	What Is Strategy?
	Strategy Implementation and the Balanced Scorecard
		The Balanced Scorecard
		Strategy Maps and the Balanced Scorecard
		Implementing a Balanced Scorecard
		Different Strategies Lead to Different Scorecards
		Environmental and Social Performance and the Balanced Scorecard
		Features of a Good Balanced Scorecard
		Pitfalls in Implementing a Balanced Scorecard
		Evaluating the Success of Strategy and Implementation
	Strategic Analysis of Operating Income
		Growth Component of Change in Operating Income
		Price-Recovery Component of Change in Operating Income
		Productivity Component of Change in Operating Income
		Further Analysis of Growth, Price-Recovery, and Productivity Components
		Concepts in Action: Operating Income Analysis and the Decline of Casual Dining Restaurants
	Downsizing and the Management of Capacity
		Identifying Unused Capacity Costs
		Managing Unused Capacity
	Problem for Self-Study
	Decision Points
	Appendix: Productivity Measurement
	Terms to Learn
	Assignment Material
		Questions
		Multiple-Choice Questions
		Exercises
		Problems
14. Pricing Decisions and Cost Management
	Extreme Pricing and Cost Management at IKEA
	Major Factors That Affect Pricing Decisions
		Customers
		Competitors
		Costs
		Weighing Customers, Competitors, and Costs
	Costing and Pricing for the Long Run
		Calculating Product Costs for Long-Run Pricing Decisions
		Alternative Long-Run Pricing Approaches
	Market-Based Approach: Target Costing for Target Pricing
		Understanding Customers’ Perceived Value
		Competitor Analysis
		Implementing Target Pricing and Target Costing
		Concepts in Action: Zara Uses Target Pricing to Become the World’s Largest Fashion Retailer
	Value Engineering, Cost Incurrence, and Locked-In Costs
		Value-Chain Analysis and Cross-Functional Teams
		Achieving the Target Cost per Unit for Provalue
	Cost-Plus Pricing
		Cost-Plus Target Rate of Return on Investment
		Alternative Cost-Plus Methods
		Cost-Plus Pricing and Target Pricing
	Life-Cycle Product Budgeting and Costing
		Life-Cycle Budgeting and Pricing Decisions
		Managing Environmental and Sustainability Costs
		Customer Life-Cycle Costing
	Noncost Factors in Pricing Decisions
		Predatory Pricing
		Collusive Pricing
		Price Discrimination
		International Pricing
		Peak-Load Pricing
	Problem for Self-Study
	Decision Points
	Terms to Learn
	Assignment Material
		Questions
		Multiple-Choice Questions
		Exercises
		Problems
15. Cost Allocation, Customer-Profitability Analysis, and Sales-Variance Analysis
	Starbucks Rewards Starts Rewarding Big Spenders
	Customer-Profitability Analysis
		Customer-Revenue Analysis
		Customer-Cost Analysis
		Customer-Level Costs
	Customer-Profitability Profiles
		Concepts in Action: Amazon Prime and Customer Profitability
		Presenting Profitability Analysis
		Using the Five-Step Decision-Making Process to Manage Customer Profitability
	Cost-Hierarchy-Based Operating Income Statement
	Criteria to Guide Cost Allocations
	Fully Allocated Customer Profitability
		Implementing Corporate and Division Cost Allocations
		Issues in Allocating Corporate Costs to Divisions and Customers
		Using Fully Allocated Costs for Decision Making
	Sales Variances
		Static-Budget Variance
		Flexible-Budget Variance and Sales-Volume Variance
		Sales-Mix Variance
		Sales-Quantity Variance
		Market-Share and Market-Size Variances
		Market-Share Variance
		Market-Size Variance
	Problem for Self-Study
	Decision Points
	Terms to Learn
	Assignment Material
		Questions
		Multiple-Choice Questions
		Exercises
		Problems
16. Allocation of Support-Department Costs, Common Costs, and Revenues
	Cost Allocation and the United States Postal Service
	Allocating Support Department Costs Using the Single-Rate and Dual-Rate Methods
		Single-Rate and Dual-Rate Methods
		Allocation Based on the Demand for (or Usage of) Materials-Handling Services
		Allocation Based on the Supply of Capacity
		Advantages and Disadvantages of Single-Rate Method
		Advantages and Disadvantages of Dual-Rate Method
	Budgeted Versus Actual Costs and the Choice of Allocation Base
		Budgeted Versus Actual Rates
		Budgeted Versus Actual Usage
		Fixed-Cost Allocation Based on Budgeted Rates and Budgeted Usage
		Fixed-Cost Allocation Based on Budgeted Rates and Actual Usage
		Allocating Budgeted Fixed Costs Based on Actual Usage
	Allocating Costs of Multiple Support Departments
		Direct Method
		Step-Down Method
		Reciprocal Method
		Overview of Methods
		Calculating the Cost of Job WPP 298
	Allocating Common Costs
		Stand-Alone Cost-Allocation Method
		Incremental Cost-Allocation Method
	Cost Allocations and Contract Disputes
		Concepts in Action: Contract Disputes Over Reimbursable Costs With the U.S. Government
	Bundled Products and Revenue Allocation Methods
		Bundling and Revenue Allocation
		Stand-Alone Revenue-Allocation Method
		Incremental Revenue-Allocation Method
	Problem for Self-Study
	Decision Points
	Terms to Learn
	Assignment Material
		Questions
		Exercises
		Problems
17. Cost Allocation: Joint Products and Byproducts
	Joint-Cost Allocation and the Wounded Warrior Project
	Joint-Cost Basics
		Concepts in Action: Big Data Joint Products and ByproductsCreate New Business Opportunities
	Allocating Joint Costs
	Approaches to Allocating Joint Costs
		Sales Value at Splitoff Method
		Physical-Measure Method
		Net Realizable Value Method
		Constant Gross-Margin Percentage NRV Method
	Choosing an Allocation Method
		Not Allocating Joint Costs
	Why Joint Costs Are Irrelevant for Decision Making
		Sell-or-Process-Further Decisions
		Decision Making and Performance Evaluation
		Pricing Decisions
	Accounting for Byproducts
		Production Method: Byproducts Recognized at Time Production Is Completed
		Sales Method: Byproducts Recognized at Time of Sale
	Problem for Self-Study
	Decision Points
	Terms to Learn
	Assignment Material
		Questions
		Multiple-Choice Questions
		Exercises
		Problems
18. Process Costing
	Cryptocurrency and FIFO Versus LIFO Accounting
	Illustrating Process Costing
	Case 1: Process Costing With Zero Beginning or Ending Work-in-Process Inventory
	Case 2: Process Costing With Zero Beginning and Some Ending Work-in-Process Inventory
		Summarizing the Physical Units and Equivalent Units (Steps 1 and 2)
		Calculating Product Costs (Steps 3, 4, and 5)
		Journal Entries
	Case 3: Process Costing With Some Beginning and Some Ending Work-in-Process Inventory
		Weighted-Average Method
		First-In, First-Out Method
		Comparing the Weighted-Average and FIFO Methods
	Transferred-In Costs in Process Costing
		Transferred-In Costs and the Weighted-Average Method
		Transferred-In Costs and the FIFO Method
		Points to Remember About Transferred-In Costs
	Hybrid Costing Systems
		Overview of Operation-Costing Systems
		Concepts in Action: Hybrid Costing for Adidas Customized 3D Printed Shoes
		Illustrating an Operation-Costing System
		Journal Entries
	Problem for Self-Study
	Decision Points
	Appendix: Standard-Costing Method of Process Costing
	Terms to Learn
	Assignment Material
		Questions
		Multiple-Choice Questions
		Exercises
		Problems
19. Spoilage, Rework, and Scrap
	Rework Hampers Tesla Model 3 Production
	Defining Spoilage, Rework, and Scrap
	Two Types of Spoilage
		Normal Spoilage
		Abnormal Spoilage
	Spoilage in Process Costing Using Weighted-Average and FIFO
		Count All Spoilage
		Five-Step Procedure for Process Costing With Spoilage
		Weighted-Average Method and Spoilage
		FIFO Method and Spoilage
		Journal Entries
	Inspection Points and Allocating Costs of Normal Spoilage
	Job Costing and Spoilage
	Job Costing and Rework
	Accounting for Scrap
		Recognizing Scrap at the Time of Its Sale
		Recognizing Scrap at the Time of Its Production
		Concepts in Action: Google’s Zero Waste to Landfill Initiative
	Problem for Self-Study
	Decision Points
	Appendix: Standard-Costing Method and Spoilage
	Terms to Learn
	Assignment Material
		Questions
		Multiple-Choice Questions
		Exercises
		Problems
20. Balanced Scorecard: Quality and Time
	“Dieselgate” Derails Volkswagen’s Grand Ambitions
	Quality as a Competitive Tool
		The Financial Perspective: The Costs of Quality
	Using Nonfinancial Measures to Evaluate and Improve Quality
		The Customer Perspective: Nonfinancial Measures of Customer Satisfaction
		The Internal-Business-Process Perspective: Analyzing Quality Problems and Improving Quality
		The Learning-and-Growth Perspective: Quality Improvements
	Weighing the Costs and Benefits of Improving Quality
	Evaluating a Company’s Quality Performance
	Time as a Competitive Tool
		Customer-Response Time and On-Time Performance
		Time Drivers and Bottlenecks
		Concepts in Action: Facebook Works to Overcome Mobile Data Bottlenecks
	Relevant Revenues and Costs of Delays
	Balanced Scorecard and Time-Based Measures
	Problem for Self-Study
	Decision Points
	Terms to Learn
	Assignment Material
		Questions
		Multiple-Choice Questions
		Exercises
		Problems
21. Inventory Management, Just-in-Time, and Simplified Costing Methods
	Target Leverages the Internet of Things to Respond to the Changing Retail Landscape
	Inventory Management in Retail Organizations
		Costs Associated With Goods for Sale
	The Economic-Order-Quantity Decision Model
		When to Order, Assuming Certainty
		Safety Stock
	Estimating Inventory-Related Relevant Costs and Their Effects
		Cost of a Prediction Error
		Conflicts Between the EOQ Decision Model and Managers’ Performance Evaluation
	Just-in-Time Purchasing
		JIT Purchasing and EOQ Model Parameters
		Relevant Costs of JIT Purchasing
		Supplier Evaluation and Relevant Costs of Quality and Timely Deliveries
		JIT Purchasing, Planning and Control, and Supply-Chain Analysis
	Inventory Management, MRP, and JIT Production
		Materials Requirements Planning
		Just-in-Time (JIT) Production
	Features of JIT Production Systems
		Concepts in Action: Just-in-Time Live Concert Recordings
		Costs and Benefits of JIT Production
		JIT in Service Industries
		Enterprise Resource Planning (ERP) Systems
		Performance Measures and Control in JIT Production
		Effect of JIT Systems on Product Costing
	Backflush Costing
		Simplified Normal or Standard-Costing Systems
	Lean Accounting
	Problems for Self-Study
	Decision Points
	Terms to Learn
	Assignment Material
		Questions
		Multiple-Choice Questions
		Exercises
		Problems
22. Capital Budgeting and Cost Analysis
	NPV and California’s New Residential Solar Panel Rules
	Stages of Capital Budgeting
		Concepts in Action: AkzoNobel Integrates Sustainability Into Capital Budgeting
	Discounted Cash Flow
		Net Present Value Method
		Internal Rate-of-Return Method
		Comparing the Net Present Value and Internal Rate-of-Return Methods
		Sensitivity Analysis
	Payback Method
		Uniform Cash Flows
		Nonuniform Cash Flows
	Accrual Accounting Rate-of-Return Method
	Relevant Cash Flows in Discounted Cash Flow Analysis
		Relevant After-Tax Flows
		Categories of Cash Flows
	Project Management and Performance Evaluation
		Post-Investment Audits
		Performance Evaluation
	Strategic Considerations in Capital Budgeting
		Investment in Research and Development
		Customer Value and Capital Budgeting
	Problem for Self-Study
	Decision Points
	Appendix: Capital Budgeting and Inflation
	Terms to Learn
	Assignment Material
		Questions
		Multiple-Choice Questions
		Exercises
		Problems
		Answers to Exercises in Compound Interest (Exercise 22-21)
23. Management Control Systems, Transfer Pricing, and Multinational Considerations
	Apple Forced to Pay Ireland €14.3 Billion in Tax Settlement
	Management Control Systems
		Formal and Informal Systems
		Effective Management Control
	Decentralization
		Benefits of Decentralization
		Costs of Decentralization
		Comparing Benefits and Costs
		Decentralization in Multinational Companies
		Choices About Responsibility Centers
	Transfer Pricing
		Criteria for Evaluating Transfer Prices
	Calculating Transfer Prices
		An Illustration of Transfer Pricing
	Market-Based Transfer Prices
		Perfect Competition
		Imperfect Competition
	Cost-Based Transfer Prices
		Full-Cost Bases
		Variable-Cost Bases
	Hybrid Transfer Prices
		Prorating the Difference Between Maximum and Minimum Transfer Prices
		Negotiated Pricing
		Dual Pricing
	A General Guideline for Transfer-Pricing Situations
	How Multinationals Use Transfer Pricing to Minimize Their Income Taxes
		Concepts in Action: IRS Accuses Medtronic of Unfair Tax Deal
		Transfer Prices Designed for Multiple Objectives
	Problem for Self-Study
	Decision Points
	Terms to Learn
	Assignment Material
		Questions
		Exercises
		Problems
24. Performance Measurement, Compensation, and Multinational Considerations
	CEO Compensation at General Electric
	Financial and Nonfinancial Performance Measures
	Accounting-Based Measures for Business Units
		Return on Investment
		Residual Income
		Economic Value Added
		Return on Sales
		Comparing Performance Measures
	Choosing the Details of the Performance Measures
		Alternative Time Horizons
		Alternative Definitions of Investment
		Alternative Asset Measurements
	Target Levels of Performance and Feedback
		Choosing Target Levels of Performance
		Choosing the Timing of Feedback
	Performance Measurement in Multinational Companies
		Calculating a Foreign Division’s ROI in the Foreign Currency
		Calculating a Foreign Division’s ROI in U.S. Dollars
	Distinguishing the Performance of Managers From the Performance of Their Subunits
		The Basic Tradeoff: Creating Incentives Versus Imposing Risk
		Intensity of Incentives and Financial and Nonfinancial Measurements
		Concepts in Action: Performance Measurement at Unilever
		Benchmarks and Relative Performance Evaluation
		Performance Measures at the Individual Activity Level
		Executive Performance Measures and Compensation
	Strategy and Levers of Control
		Boundary Systems
		Belief Systems
		Interactive Control Systems
	Problem for Self-Study
	Decision Points
	Terms to Learn
	Assignment Material
		Questions
		Multiple-Choice Questions
		Exercises
		Problems
Appendix A: Notes on Compound Interest and Interest Tables
Glossary
Index
	Author
		A
		B
		C
		D
		E
		F
		G
		H
		I
		J
		K
		L
		M
		N
		O
		P
		R
		S
		T
		V
		W
		Y
	Company
		A
		B
		C
		D
		E
		F
		G
		H
		I
		J
		K
		L
		M
		N
		O
		P
		R
		S
		T
		U
		V
		W
		X
		Y
		Z
	Subject
		A
		B
		C
		D
		E
		F
		G
		H
		I
		J
		K
		L
		M
		N
		O
		P
		Q
		R
		S
		T
		U
		V
		W
		Y
		Z