eBook - MANAGEMENT AND COST ACCOUNTING Sixth Edition by Alnoor Bhimani, Charles T. Horngren, Srikant M. Datar

PART I Management and cost accounting fundamentals — p. 1 CHAPTER 1 The accountant’s role in the organisation — p. 2 Accounting, costing and strategy — p. 3 Accounting systems and management controls — p. 6 Costs, benefits and context — p. 10 Themes in the design of management accounting systems — p. 12 Forces of change in management accounting — p. 16 CHAPTER 2 An introduction to cost terms and purposes — p. 30 Costs in general — p. 31 Direct costs and indirect costs — p. 32 Cost drivers and cost management — p. 33 Two types of cost behaviour pattern: variable costs and fixed costs — p. 34 Total costs and unit costs — p. 37 Financial statements and cost terminology — p. 40 Service-sector companies — p. 41 Merchandising- and manufacturing-sector companies — p. 41 The many meanings of product costs — p. 44 Classification of costs — p. 45 CHAPTER 3 Job-costing systems — p. 56 The building block concept of costing systems — p. 57 Job-costing and process-costing systems — p. 57 Job costing in service organisations using actual costing — p. 58 Normal costing — p. 61 Job costing in manufacturing — p. 62 An illustration of a job-costing system in manufacturing — p. 66 Budgeted indirect costs and end-of-period adjustments — p. 71 CHAPTER 4 Process-costing systems — p. 85 Illustrating process costing — p. 86 Case 1: Process costing with no opening or closing work-in-progress stock — p. 87 Case 2: Process costing with no opening but a closing work-in-progress stock — p. 88 Case 3: Process costing with both some opening and some closing work-in-progress stock — p. 92 Weighted-average method — p. 92 First-in, first-out method — p. 95 Comparison of weighted-average and FIFO methods — p. 100 Standard-costing method of process costing — p. 101 Transferred-in costs in process costing — p. 105 Hybrid-costing systems — p. 111 CHAPTER 5 Cost allocation — p. 123 Purposes of cost allocation — p. 124 Cost allocation and costing systems — p. 125 Indirect cost pools and cost allocation — p. 126 Allocating costs from one department to another — p. 128 Allocating costs of support departments — p. 132 Support department cost-allocation methods — p. 132 Allocating common costs — p. 138 Cost-allocation bases and cost hierarchies — p. 139 Is the product-costing system broken? — p. 141 CHAPTER 6 Cost allocation: joint-cost situations — p. 152 Meaning of joint products and by-products terms — p. 153 Why allocate joint costs? — p. 154 Approaches to allocating joint costs — p. 155 No allocation of joint costs — p. 163 Irrelevance of joint costs for decision making — p. 164 Accounting for by-products — p. 166 CHAPTER 7 Income effects of alternative stock-costing methods — p. 178 PART ONE: Stock-costing methods — p. 179 Variable costing and absorption costing — p. 179 Comparison of variable costing and absorption costing — p. 183 Capsule comparison of stock-costing methods — p. 188 Performance measures and absorption costing — p. 189 PART TWO: Denominator-level concepts and absorption costing — p. 191 Alternative denominator-level concepts — p. 191 Effect on financial statements — p. 193 PART II Accounting information for decision making — p. 215 CHAPTER 8 Cost–volume–profit relationships — p. 216 Revenue drivers and cost drivers — p. 217 CVP assumptions — p. 218 The breakeven point — p. 218 The PV graph — p. 222 Impact of income taxes — p. 223 Sensitivity analysis and uncertainty — p. 224 Cost planning and CVP — p. 226 Effects of revenue mix on profit — p. 228 Not-for-profit organisations and CVP — p. 229 Contribution margin and gross margin — p. 229 CHAPTER 9 Determining how costs behave — p. 244 General issues in estimating cost functions — p. 245 The cause-and-effect criterion in choosing cost drivers — p. 248 Cost estimation approaches — p. 249 Steps in estimating a cost function — p. 250 Evaluating and choosing cost drivers — p. 256 Cost drivers and activity-based costing — p. 257 Non-linearity and cost functions — p. 258 Learning curves and non-linear cost functions — p. 260 CHAPTER 10 Relevant information for decision making — p. 282 Information and the decision process — p. 283 The concept of relevance — p. 284 An illustration of relevance: choosing output levels — p. 286 Outsourcing and make-or-buy decisions — p. 288 Opportunity costs, outsourcing and capacity constraints — p. 291 Product-mix decisions under capacity constraints — p. 295 Customer profitability and relevant costs — p. 296 Irrelevance of past costs and equipment-replacement decisions — p. 299 CHAPTER 11 Activity-based costing — p. 312 Undercosting and overcosting — p. 313 Costing system at Plastim Limited — p. 314 Refining a costing system — p. 317 Activity-based costing systems — p. 318 Implementing ABC at Plastim Limited — p. 322 Comparing alternative costing systems — p. 327 Using ABC systems for cost and profit management — p. 328 ABC and department-costing systems — p. 330 Implementing ABC systems — p. 331 ABC and the organisational context — p. 334 CHAPTER 12 Pricing, target costing and customer profitability analysis — p. 344 Major influences on pricing — p. 345 Product-cost categories and time horizon — p. 346 Costing and pricing for the short run — p. 346 Costing and pricing for the long run — p. 348 Target costing for target pricing — p. 352 Achieving the target cost per unit for Provalue — p. 355 Cost-plus pricing — p. 358 Life-cycle product budgeting and costing — p. 361 Customer profitability analysis — p. 363 Customer revenues — p. 363 Customer costs — p. 364 Customer profitability profiles — p. 367 CHAPTER 13 Capital investment decisions — p. 380 Two focuses of cost analysis — p. 381 Stages of capital budgeting — p. 382 Discounted cash-flow methods — p. 384 Sensitivity analysis — p. 389 Relevant cash flows in discounted cash-flow analysis — p. 390 Payback method — p. 392 Accounting rate-of-return method — p. 394 Managing the project — p. 396 Income tax factors — p. 396 Capital budgeting and inflation — p. 397 Choosing between the net present-value and the internal rate-of-return decision approaches — p. 399 PART III Planning and budgetary control systems — p. 423 CHAPTER 14 Motivation, budgets and responsibility accounting — p. 424 Major features of budgets — p. 425 Roles of budgets — p. 425 Types of budget — p. 430 Computer-based financial planning models — p. 440 Kaizen budgeting — p. 442 Activity-based budgeting — p. 442 Budgeting and responsibility accounting — p. 443 Responsibility and controllability — p. 445 Budgeting: a discipline in transition — p. 446 CHAPTER 15 Flexible budgets, variances and management control: I — p. 462 Static budgets and flexible budgets — p. 463 Static-budget variances — p. 463 Steps in developing a flexible budget — p. 465 Flexible-budget variances and sales-volume variances — p. 466 Price variances and efficiency variances for inputs — p. 468 Impact of stocks — p. 472 Management uses of variances — p. 474 Flexible budgeting and activity-based costing — p. 477 An illustration of journal entries using standard costs — p. 479 Benchmarking and variance analysis — p. 481 CHAPTER 16 Flexible budgets, variances and management control: II — p. 492 Planning of variable- and fixed-overhead costs — p. 493 Developing budgeted variable-overhead rates — p. 494 Variable-overhead cost variances — p. 494 Developing budgeted fixed-overhead rates — p. 499 Fixed-overhead cost variances — p. 499 Production-volume variance — p. 500 Integrated analysis of overhead cost variances — p. 502 Different purposes of manufacturing overhead cost analysis — p. 503 Journal entries for overhead costs and variances — p. 505 Engineered, discretionary and infrastructure costs — p. 507 Financial and non-financial performance measures — p. 508 Actual, normal and standard costing — p. 509 Activity-based costing and variance analysis — p. 512 CHAPTER 17 Measuring yield, mix and quantity effects — p. 526 Input variances — p. 527 Direct materials yield and mix variances — p. 527 Direct manufacturing labour yield and mix variances — p. 531 Revenue and sales variances — p. 534 Variance analysis for multiple products — p. 535 PART IV Management control systems and performance issues — p. 559 CHAPTER 18 Control systems and transfer pricing — p. 560 Management control systems — p. 561 Evaluating management control systems — p. 561 Organisational structure and decentralisation — p. 562 Choices about responsibility centres — p. 564 Transfer pricing — p. 565 An illustration of transfer pricing — p. 566 Market-based transfer prices — p. 568 Cost-based transfer prices — p. 569 Negotiated transfer prices — p. 572 A general guideline for transfer-pricing situations — p. 573 Transfer pricing and tax considerations — p. 574 CHAPTER 19 Control systems and performance measurement — p. 586 Financial and non-financial performance measures — p. 587 Designing an accounting-based performance measure — p. 587 Different performance measures — p. 588 Alternative definitions of investment — p. 595 Alternative performance measures — p. 595 Choosing targeted levels of performance and timing of feedback — p. 598 Distinction between managers and organisational units — p. 599 Performance measures at the individual activity level — p. 602 Environmental and ethical responsibilities — p. 603 Strategy and levers of control — p. 603 PART V Quality, time and the strategic management of costs — p. 635 CHAPTER 20 Quality and throughput concerns in managing costs — p. 636 Quality as a competitive weapon — p. 637 Costs of quality — p. 638 Techniques used to identify quality problems — p. 641 Relevant costs and benefits of quality improvement — p. 643 Non-financial measures of quality and customer satisfaction — p. 646 Evaluating quality performance — p. 647 Theory of constraints — p. 647 CHAPTER 21 Accounting for just-in-time systems — p. 659 Just-in-time systems — p. 660 Major features of JIT production systems — p. 660 Enterprise resource planning (ERP) systems — p. 664 Backflush costing — p. 665 Managing goods for sale in retail organisations — p. 673 Challenges in estimating stock-related costs and their effects — p. 678 Just-in-time purchasing — p. 680 Stock costs and their management in manufacturing organisations — p. 683 CHAPTER 22 Strategic management accounting and emerging issues — p. 695 Conceptions of strategy — p. 696 What is strategic management accounting? — p. 699 The balanced scorecard — p. 700 Evaluating the success of a strategy — p. 707 The tableau de bord — p. 709 Enterprise governance and strategy — p. 711 The strategic management accounting potential — p. 712 Emerging issues impacting management accounting — p. 713