Managerial Accounting 10e

Front Cover......Page 1
Title Page......Page 2
Copyright......Page 5
Contents......Page 28
CHAPTER 1 Managerial Accounting Concepts and Principles......Page 34
Managerial Accounting......Page 35
Differences Between Managerial and Financial Accounting......Page 36
The Management Accountant in the Organization......Page 37
Managerial Accounting in the Management Process......Page 38
Manufacturing Operations: Costs and Terminology......Page 40
Direct and Indirect Costs......Page 41
Manufacturing Costs......Page 42
Balance Sheet for a Manufacturing Business......Page 46
Income Statement for a Manufacturing Company......Page 47
Uses of Managerial Accounting......Page 49
Business Connection: Navigating The Information Highway......Page 52
CHAPTER 2 Job Order Costing......Page 71
Cost Accounting System Overview......Page 72
Job Order Cost Systems for Manufacturing Businesses......Page 73
Materials......Page 74
Factory Labor......Page 76
Factory Overhead Cost......Page 78
Work in Process......Page 83
Finished Goods......Page 84
Summary of Cost Flows for Legend Guitars......Page 85
Job Order Costing for Decision Making......Page 87
Job Order Cost Systems for Professional Service Businesses......Page 88
Business Connection: Making Money in the Movie Business......Page 89
CHAPTER 3 Process Cost Systems......Page 113
Process Cost Systems......Page 114
Comparing Job Order and Process Cost Systems......Page 115
Cost Flows for a Process Manufacturer......Page 117
Step 1: Determine the Units to Be Assigned Costs......Page 120
Step 2: Compute Equivalent Units of Production......Page 122
Step 3: Determine the Cost per Equivalent Unit......Page 125
Step 4: Allocate Costs to Units Transferred Out and Partially Completed Units......Page 127
Preparing the Cost of Production Report......Page 129
Journal Entries for a Process Cost System......Page 130
Frozen Delight......Page 133
Yield......Page 134
Just-in-Time Processing......Page 135
Determining Costs Using the Average Cost Method......Page 137
The Cost of Production Report......Page 139
CHAPTER 4 Cost Behavior and Cost-Volume-Profit Analysis......Page 164
Cost Behavior......Page 165
Variable Costs......Page 166
Mixed Costs......Page 167
Cost-Volume-Profit Relationships......Page 170
Contribution Margin Ratio......Page 171
Unit Contribution Margin......Page 172
Break-Even Point......Page 174
Business Connection: Breaking Even on Howard Stern......Page 177
Target Profit......Page 178
Cost-Volume-Profit (Break-Even) Chart......Page 179
Profit-Volume Chart......Page 181
Assumptions of Cost-Volume-Profit Analysis......Page 182
Special Cost-Volume-Profit Relationships......Page 183
Sales Mix Considerations......Page 184
Operating Leverage......Page 185
Margin of Safety......Page 187
CHAPTER 5 Variable Costing for Management Analysis......Page 210
Absorption Costing......Page 211
Variable Costing......Page 212
Units Manufactured Exceed Units Sold......Page 214
Units Manufactured Less Than Units Sold......Page 215
Effects on Income from Operations......Page 217
Income Analysis Under Absorption and Variable Costing......Page 218
Controlling Costs......Page 221
Analyzing Market Segments......Page 222
Sales Territory Profitability Analysis......Page 223
Product Profitability Analysis......Page 224
Salesperson Profitability Analysis......Page 225
Business Connection: McDonald’s Corporation Contribution Margin by Store......Page 226
Contribution Margin Analysis......Page 227
Reporting Income from Operations Using Variable Costing for a Service Company......Page 229
Market Segment Analysis for Service Company......Page 230
Contribution Margin Analysis......Page 231
CHAPTER 6 Budgeting......Page 260
Nature and Objectives Of Budgeting......Page 261
Human Behavior and Budgeting......Page 262
Budgeting Systems......Page 264
Flexile Budget......Page 265
Business Connection: Build Versus Harvest......Page 266
Computerized Budgeting Systems......Page 267
Master Budget......Page 268
Sales Budget......Page 269
Production Budget......Page 270
Direct Materials Purchases Budget......Page 271
Direct Labor Cost Budget......Page 272
Factory Overhead Cost Budget......Page 273
Cost of Goods Sold Budget......Page 274
Balance Sheet Budgets......Page 276
Cash Budget......Page 277
Capital Expenditures Budget......Page 280
Budgeted Balance Sheet......Page 281
CHAPTER 7 Performance Evaluation Using Variances from Standard Costs......Page 306
Standards......Page 307
Types of Standards......Page 308
Business Connection: Making the Grade in the Real World—The 360-Degree Review......Page 309
Budgetary Performance Evaluation......Page 310
Budget Performance Report......Page 311
Manufacturing Cost Variances......Page 312
Direct Materials Variances......Page 313
Direct Labor Variances......Page 315
The Factory Overhead Flexile Budget......Page 318
Variable Factory Overhead Controllable Variance......Page 319
Fixed Factory Overhead Volume Variance......Page 320
Factory Overhead Account......Page 322
Recording and Reporting Variances from Standards......Page 324
Nonfinancial Performance Measures......Page 327
Comprehensive Problem......Page 345
CHAPTER 8 Performance Evaluation for Decentralized Operations......Page 350
Centralized and Decentralized Operations......Page 351
Responsibility Accounting......Page 352
Responsibility Accounting for Cost Centers......Page 353
Service Department Charges......Page 355
Profit Center Reporting......Page 358
Responsibility Accounting for Investment Centers......Page 359
Rate of Return on Investment......Page 360
Residual Income......Page 363
The Balanced Scorecard......Page 365
Transfer Pricing......Page 366
Market Price Approach......Page 367
Negotiated Price Approach......Page 368
Cost Price Approach......Page 370
CHAPTER 9 Differential Analysis and Product Pricing......Page 394
Differential Analysis......Page 395
Lease or Sell......Page 397
Discontinue a Segment or Product......Page 398
Make or Buy......Page 400
Replace Equipment......Page 402
Process or Sell......Page 403
Accept Business at a Special Price......Page 404
Total Cost Concept......Page 406
Product Cost Concept......Page 409
Variable Cost Concept......Page 410
Choosing a Cost-Plus Approach Cost Concept......Page 412
Target Costing......Page 413
Production Bottlenecks and Profits......Page 414
Production Bottlenecks and Pricing......Page 415
Business Connection: What Is a Product?......Page 416
CHAPTER 10 Capital Investment Analysis......Page 438
Nature of Capital Investment Analysis......Page 439
Average Rate of Return Method......Page 440
Cash Payback Method......Page 441
Present Value Concepts......Page 443
Net Present Value Method......Page 446
Internal Rate of Return Method......Page 448
Business Connection: Panera Bread Store Rate of Return......Page 450
Unequal Proposal Lives......Page 451
Changes in Price Levels......Page 453
Capital Rationing......Page 454
CHAPTER 11 Cost Allocation and Activity-Based Costing......Page 476
Product Costing Allocation Methods......Page 477
Single Plantwide Factory Overhead Rate Method......Page 478
Multiple Production Department Factory Overhead Rate Method......Page 480
Department Overhead Rates and Allocation......Page 481
Distortion of Product Costs......Page 482
Activity-Based Costing Method......Page 484
Activity Rates and Allocation......Page 486
Distortion in Product Costs......Page 487
Dangers of Product Cost Distortion......Page 488
Activity-Based Costing for Selling and Administrative Expenses......Page 489
Activity-Based Costing in Service Businesses......Page 491
Business Connection: Finding the Right Niche......Page 494
CHAPTER 12 Cost Management for Just-in-Time Environments......Page 522
Reducing Inventory......Page 523
Reducing Lead Times......Page 524
Reducing Setup Time......Page 525
Emphasizing Product-Oriented Layout......Page 528
Emphasizing Zero Defects......Page 529
Just-in-Time for Nonmanufacturing Processes......Page 530
Accounting for Just-in-Time Manufacturing......Page 532
Combined Accounts......Page 533
Direct Tracing of Overhead......Page 535
Costs of Quality......Page 536
Quality Activity Analysis......Page 537
Value-Added Activity Analysis......Page 539
Process Activity Analysis......Page 540
CHAPTER 13 Statement of Cash Flows......Page 562
Reporting Cash Flows......Page 563
Cash Flows from Operating Activities......Page 564
Business Connection: Too Much Cash!......Page 566
Statement of Cash Flows—The Indirect Method......Page 567
Adjustments to Net Income......Page 569
Common Stock......Page 574
Building......Page 575
Preparing the Statement of Cash Flows......Page 576
Statement of Cash Flows—The Direct Method......Page 577
Cash Received from Customers......Page 578
Cash Payments for Merchandise......Page 579
Interest Expense......Page 580
Reporting Cash Flows from Operating Activities—Direct Method......Page 581
Financial Analysis and Interpretation......Page 582
Retained Earnings......Page 583
Preparing the Statement of Cash Flows......Page 585
CHAPTER 14 Financial Statement Analysis......Page 616
Basic Analytical Methods......Page 617
Horizontal Analysis......Page 618
Vertical Analysis......Page 620
Common-Sized Statements......Page 621
Solvency Analysis......Page 623
Current Position Analysis......Page 624
Accounts Receivable Analysis......Page 626
Inventory Analysis......Page 627
Ratio of Liabilities to Stockholders’ Equity......Page 629
Number of Times Interest Charges Earned......Page 630
Ratio of Net Sales to Assets......Page 631
Rate Earned on Total Assets......Page 632
Rate Earned on Stockholders’ Equity......Page 633
Rate Earned on Common Stockholders’ Equity......Page 634
Earned Per Share on Common Stock......Page 635
Price-Earnings Ratio......Page 636
Summary of Analytical Measures......Page 637
Report on Internal Control......Page 639
Business Connection: Investing Strategies......Page 640
Unusual Items Affecting the Current Period’s Income Statement......Page 641
Unusual Items Affecting the Prior Period’s Income Statement......Page 643
Nike, Inc., Problem......Page 669
APPENDIX A: Interest Tables......Page 675
APPENDIX B: Form 10-K Nike Inc.......Page 680
Glossary......Page 710
Subject Index......Page 718
Company Index......Page 727