Principles of Accounting, Volume 2: Managerial Accounting

Preface
	1. About OpenStax
	2. About OpenStax resources
	3. About Principles of Accounting
	4. Additional resources
	5. About the authors
Chapter 1. Accounting as a Tool for Managers
	Table of Contents
	Why It Matters*
	1.1. Define Managerial Accounting and Identify the Three Primary Responsibilities of Management*
	1.2. Distinguish between Financial and Managerial Accounting*
	1.3. Explain the Primary Roles and Skills Required of Managerial Accountants*
	1.4. Describe the Role of the Institute of Management Accountants and the Use of Ethical Standards*
	1.5. Describe Trends in Today’s Business Environment and Analyze Their Impact on Accounting*
	Glossary
	Summary
	Multiple Choice
	Questions
	Exercise Set A
	Exercise Set B
	Thought Provokers
Chapter 2. Building Blocks of Managerial Accounting
	Table of Contents
	Why It Matters*
	2.1. Distinguish between Merchandising, Manufacturing, and Service Organizations*
	2.2. Identify and Apply Basic Cost Behavior Patterns*
	2.3. Estimate a Variable and Fixed Cost Equation and Predict Future Costs*
	Glossary
	Summary
	Multiple Choice
	Questions
	Exercise Set A
	Exercise Set B
	Problem Set A
	Problem Set B
	Thought Provokers
Chapter 3. Cost-Volume-Profit Analysis
	Table of Contents
	Why It Matters*
	3.1. Explain Contribution Margin and Calculate Contribution Margin per Unit, Contribution Margin Ratio, and Total Contribution Margin*
	3.2. Calculate a Break-Even Point in Units and Dollars*
	3.3. Perform Break-Even Sensitivity Analysis for a Single Product Under Changing Business Situations*
	3.4. Perform Break-Even Sensitivity Analysis for a Multi-Product Environment Under Changing Business Situations*
	3.5. Calculate and Interpret a Company’s Margin of Safety and Operating Leverage*
	Glossary
	Summary
	Multiple Choice
	Questions
	Exercise Set A
	Exercise Set B
	Problem Set A
	Problem Set B
	Thought Provokers
Chapter 4. Job Order Costing
	Table of Contents
	Why It Matters*
	4.1. Distinguish between Job Order Costing and Process Costing*
	4.2. Describe and Identify the Three Major Components of Product Costs under Job Order Costing*
	4.3. Use the Job Order Costing Method to Trace the Flow of Product Costs through the Inventory Accounts*
	4.4. Compute a Predetermined Overhead Rate and Apply Overhead to Production*
	4.5. Compute the Cost of a Job Using Job Order Costing*
	4.6. Determine and Dispose of Underapplied or Overapplied Overhead*
	4.7. Prepare Journal Entries for a Job Order Cost System*
	4.8. Explain How a Job Order Cost System Applies to a Nonmanufacturing Environment*
	Glossary
	Summary
	Multiple Choice
	Questions
	Exercise Set A
	Exercise Set B
	Problem Set A
	Problem Set B
	Thought Provokers
Chapter 5. Process Costing
	Table of Contents
	Why It Matters*
	5.1. Compare and Contrast Job Order Costing and Process Costing*
	5.2. Explain and Identify Conversion Costs*
	5.3. Explain and Compute Equivalent Units and Total Cost of Production in an Initial Processing Stage*
	5.4. Explain and Compute Equivalent Units and Total Cost of Production in a Subsequent Processing Stage*
	5.5. Prepare Journal Entries for a Process Costing System*
	Glossary
	Summary
	Multiple Choice
	Questions
	Exercise Set A
	Exercise Set B
	Problem Set A
	Problem Set B
	Thought Provokers
Chapter 6. Activity-Based, Variable, and Absorption Costing
	Table of Contents
	Why It Matters*
	6.1. Calculate Predetermined Overhead and Total Cost under the Traditional Allocation Method*
	6.2. Describe and Identify Cost Drivers*
	6.3. Calculate Activity-Based Product Costs*
	6.4. Compare and Contrast Traditional and Activity-Based Costing Systems*
	6.5. Compare and Contrast Variable and Absorption Costing*
	Glossary
	Summary
	Multiple Choice
	Questions
	Exercise Set A
	Exercise Set B
	Problem Set A
	Problem Set B
	Thought Provokers
Chapter 7. Budgeting
	Table of Contents
	Why It Matters*
	7.1. Describe How and Why Managers Use Budgets*
	7.2. Prepare Operating Budgets*
	7.3. Prepare Financial Budgets*
	7.4. Prepare Flexible Budgets*
	7.5. Explain How Budgets Are Used to Evaluate Goals*
	Glossary
	Summary
	Multiple Choice
	Questions
	Exercise Set A
	Exercise Set B
	Problem Set A
	Problem Set B
	Thought Provokers
Chapter 8. Standard Costs and Variances
	Table of Contents
	Why It Matters*
	8.1. Explain How and Why a Standard Cost Is Developed*
	8.2. Compute and Evaluate Materials Variances*
	8.3. Compute and Evaluate Labor Variances*
	8.4. Compute and Evaluate Overhead Variances*
	8.5. Describe How Companies Use Variance Analysis*
	Glossary
	Summary
	Multiple Choice
	Questions
	Exercise Set A
	Exercise Set B
	Problem Set A
	Problem Set B
	Thought Provokers
Chapter 9. Responsibility Accounting and Decentralization
	Table of Contents
	Why It Matters*
	9.1. Differentiate between Centralized and Decentralized Management*
	9.2. Describe How Decision-Making Differs between Centralized and Decentralized Environments*
	9.3. Describe the Types of Responsibility Centers*
	9.4. Describe the Effects of Various Decisions on Performance Evaluation of Responsibility Centers*
	Glossary
	Summary
	Multiple Choice
	Questions
	Exercise Set A
	Exercise Set B
	Problem Set A
	Problem Set B
	Thought Provokers
Chapter 10. Short-Term Decision Making
	Table of Contents
	Why It Matters*
	10.1. Identify Relevant Information for Decision-Making*
	10.2. Evaluate and Determine Whether to Accept or Reject a Special Order*
	10.3. Evaluate and Determine Whether to Make or Buy a Component*
	10.4. Evaluate and Determine Whether to Keep or Discontinue a Segment or Product*
	10.5. Evaluate and Determine Whether to Sell or Process Further*
	10.6. Evaluate and Determine How to Make Decisions When Resources Are Constrained*
	Glossary
	Summary
	Multiple Choice
	Questions
	Exercise Set A
	Exercise Set B
	Problem Set A
	Problem Set B
	Thought Provokers
Chapter 11. Capital Budgeting Decisions
	Table of Contents
	Why It Matters*
	11.1. Describe Capital Investment Decisions and How They Are Applied*
	11.2. Evaluate the Payback and Accounting Rate of Return in Capital Investment Decisions*
	11.3. Explain the Time Value of Money and Calculate Present and Future Values of Lump Sums and Annuities*
	11.4. Use Discounted Cash Flow Models to Make Capital Investment Decisions*
	11.5. Compare and Contrast Non-Time Value-Based Methods and Time Value-Based Methods in Capital Investment Decisions*
	Glossary
	Summary
	Multiple Choice
	Questions
	Exercise Set A
	Exercise Set B
	Problem Set A
	Problem Set B
	Thought Provokers
Chapter 12. Balanced Scorecard and Other Performance Measures
	Table of Contents
	Why It Matters*
	12.1. Explain the Importance of Performance Measurement*
	12.2. Identify the Characteristics of an Effective Performance Measure*
	12.3. Evaluate an Operating Segment or a Project Using Return on Investment, Residual Income, and Economic Value Added*
	12.4. Describe the Balanced Scorecard and Explain How It Is Used*
	Glossary
	Summary
	Multiple Choice
	Questions
	Exercise Set A
	Exercise Set B
	Problem Set A
	Problem Set B
	Thought Provokers
Chapter 13. Sustainability Reporting
	Table of Contents
	Why It Matters*
	13.1. Describe Sustainability and the Way It Creates Business Value*
	13.2. Identify User Needs for Information*
	13.3. Discuss Examples of Major Sustainability Initiatives*
	13.4. Future Issues in Sustainability*
	Glossary
	Summary
	Multiple Choice
	Questions
	Thought Provokers
Appendix A. Financial Statement Analysis*
	A.1. Financial Statement Analysis
	A.2. Horizontal Analysis
	A.3. Vertical Analysis
	A.4. Overview of Financial Ratios
	A.5. Advantages and Disadvantages of Financial Statement Analysis
Appendix B. Time Value of Money*
	B.1. Present Value of $1 Table
	B.2. Present Value of an Ordinary Annuity Table
	B.3. Future Value of $1 Table
	B.4. Future Value of an Ordinary Annuity Table
Appendix C. Suggested Resources*
	C.1. Sample Financial Statements
	C.2. Accounting Software and Tools
	C.3. Personal Finance
	C.4. Accounting-Related Organizations
	C.5. Accounting Exams and Certificates
Solutions
	Chapter 1
	Chapter 2
	Chapter 3
	Chapter 4
	Chapter 5
	Chapter 6
	Chapter 7
	Chapter 8
	Chapter 9
	Chapter 10
	Chapter 11
	Chapter 12
	Chapter 13
Index
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