| COST CONCEPTS FOR DECISION MAKERS Chapter 1. Basic Cost Concepts for Managers Feature Story: What a Difference a Day Makes Managerial Accounting Basics Comparing Managerial and Financial Accounting Management Functions Organizational Structure Business Ethics Managerial Cost Concepts Manufacturing Costs Product versus Period Costs Manufacturing Costs in Financial Statements Income Statement Balance Sheet Cost Concepts—A Review Managerial Accounting Today Service Industry Trends Managerial Accounting Practices Appendix. Accounting Cycle for a Manufacturing Company Work Sheet Closing Entries Chapter 2. Job Order Costing Feature Story: “…And We’d Like It in Red” Cost Accounting Systems Job Order Cost System Process Cost System Job Order Cost Flow Accumulating Manufacturing Costs Assigning Manufacturing Costs to Work in Process Assigning Costs to Finished Goods Assigning Costs to Cost of Goods Sold Summary of Job Order Cost Flows Reporting Job Cost Data Under- or Overapplied Manufacturing Overhead Year-End Balance Chapter 3. Process Costing Feature Story: Ben & Jerry’s Tracks Its Mix-Ups The Nature of Process Cost Systems Uses of Process Cost Systems Similarities and Differences Between Job Order Cost and Process Cost Systems Process Cost Flow Assignment of Manufacturing Costs—Journal Entries Equivalent Units Weighted-Average Method Refinements on the Weighted-Average Method Production Cost Report Comprehensive Example of Process Costing Compute the Physical Unit Flow (Step 1) Compute Equivalent Units of Production (Step 2) Compute Unit Production Costs (Step 3) Prepare a Cost Reconciliation Schedule (Step 4) Preparing the Production Cost Report Costing Systems—Final Comments Appendix. FIFO Method Equivalent Units Under FIFO Comprehensive Example Compute the Physical Unit Flow (Step 1) Compute Equivalent Units of Production (Step 2) Compute Unit Production Costs (Step 3) Prepare a Cost Reconciliation Schedule (Step 4) Preparing the Production Cost Report FIFO and Weighted Average Chapter 4. Activity-Based Costing Traditional Costing and Activity-Based Costing Traditional Costing Systems The Need for a New Approach Activity-Based Costing Illustration of Traditional Costing versus ABC Unit Costs Under Traditional Costing Unit Costs Under ABC Comparing Unit Costs Activity-Based Costing: A Closer Look Benefits of ABC Limitations of ABC When to Use ABC Value-Added versus Non-Value-Added Activities Classification of Activity Levels Activity-Based Costing in Service Industries Traditional Costing Example Activity-Based Costing Example Appendix. Just-in-Time Processing Objective of JIT Processing Elements of JIT Processing Benefits of JIT Processing DECISION-MAKING CONCEPTS Chapter 5. Cost-Volume-Profit Feature Story: Growing by Leaps and Leotards Cost Behavior Analysis Variable Costs Fixed Costs Relevant Range Mixed Costs Importance of Identifying Variable and Fixed Costs Cost-Volume-Profit Analysis Basic Components CVP Income Statement Break-Even Analysis Target Net Income Margin of Safety CVP and Changes in the Business Environment Chapter 6. Incremental Analysis Feature Story: Make It or Buy It? Management’s Decision-Making Process Incremental Analysis Approach How Incremental Analysis Works Types of Incremental Analysis Accept an Order at a Special Price Make or Buy Sell or Process Further Retain or Replace Equipment Eliminate an Unprofitable Segment Limited Resources Other Considerations in Decision Making Qualitative Factors Relationship of Incremental Analysis and Activity-Based Costing Chapter 7. Variable Costing: A Decision-Making Perspective Feature Story: What Goes Up (fast), Must Come Down (fast) Absorption Costing versus Variable Costing . Illustration Comparing Absorption Costing and Variable Costing An Extended Example Decision-Making Concerns Potential Advantages of Variable Costing Sales Mix Break-Even Sales in Units Break-Even Sales in Dollars Cost Structure and Operating Leverage Effect on Contribution Margin Ratio Degree of Operating Leverage Effect on Break-Even Point Effect on Margin of Safety Ratio Chapter 8. PricingFeature Story: “I’ll Call Your Bluff, and Raise You 43 Percent” Section 1. External Sales Target Costing Cost-Plus Pricing
Variable Cost Pricing Time and Material Pricing Section 2. Internal Sales Negotiated Transfer Pricing
Cost-Based Transfer Prices Market-Based Transfer Prices Effect of Outsourcing on Transfer Pricing Transfers Between Divisions in Different Countries Appendix. Other Cost Approaches to Pricing Absorption Cost Approach Contribution (Variable Cost) Approach PLANNING AND CONTROL CONCEPTSChapter 9. Budgetary Planning Feature Story: The Next Amazon.com? Not Quite Budgeting Basics Budgeting and Accounting The Benefits of Budgeting Essentials of Effective Budgeting Length of the Budget Period The Budgeting Process Budgeting and Human Behavior Budgeting and Long-Range Planning The Master Budget Preparing the Operating Budgets Sales Budget Production Budget Direct Materials Budget Direct Labor Budget Manufacturing Overhead Budget Selling and Administrative Expense Budget Budgeted Income Statement Preparing the Financial Budgets Cash Budget Budgeted Balance Sheet Budgeting in Nonmanufacturing Companies Merchandisers Service Enterprises Not-for-Profit Organizations Chapter 10. Budgetary Control and Responsibility AccountingFeature Story: Trying to Avoid an Electric Shock The Concept of Budgetary Control Static Budget Reports Illustrations Uses and Limitations Flexible Budgets Why Flexible Budgets? Developing the Flexible Budget Flexible Budget—A Case Study Flexible Budget Reports Management by Exception The Concept of Responsibility Accounting Controllable versus Noncontrollable Revenues and Costs Responsibility Reporting System Types of Responsibility Centers Responsibility Accounting for Cost Centers Responsibility Accounting for Profit Centers Responsibility Accounting for Investment Centers Principles of Performance Evaluation Appendix. Residual Income—Another Performance Measurement Residual Income Compared to ROI Residual Income Weakness Chapter 11. Standard Costs and Balanced ScorecardFeature Story: Highlighting Performance Efficiency The Need for Standards Distinguishing between Standards and Budgets Why Standard Costs? Setting Standard Costs—A Difficult Task Ideal versus Normal Standards A Case Study Variances from Standards Analyzing Variances Reporting Variances Statement Presentation of Variances Balanced Scorecard Appendix. The Standard Cost Accounting System Journal Entries Ledger Accounts Chapter 12. Planning for Capital InvestmentsFeature Story: Soup Is Good Food The Capital Budgeting Evaluation Process Cash Flow Information Illustrative Data Cash Payback Net Present Value Method Equal Annual Cash Flows Unequal Annual Cash Flows Choosing a Discount Rate Simplifying Assumptions Comprehensive Example Additional Considerations Intangible Benefits Mutually Exclusive Projects Risk Analysis Post-Audit of Investment Projects Other Capital Budgeting Techniques Internal Rate of Return Method Comparing Discounted Cash Flow Methods Annual Rate of Return Method PERFORMANCE EVALUATION CONCEPTSChapter 13. The Statement of Cash FlowsFeature Story:. I’ve Got $38 Billion Burning a Hole in My Pocket! The Statement of Cash Flows: Usefulness and Format Usefulness of the Statement of Cash Flows Classification of Cash Flows Significant Noncash Activities Format of the Statement of Cash Flows The Corporate Life Cycle Preparing the Statement of Cash Flows Indirect and Direct Methods Section 1. Statement of Cash Flows—Indirect Method Step
1: Operating
Activities Step 2: Investing
and Financing Activities Step 3: Net Change in Cash Section 2. Statement of Cash Flows—Direct Method Step 1: Operating Activities Step 2: Investing and Financing Activities Statement of Cash Flows--2005 Step 3: Net Change
in Cash Chapter 14. Financial Analysis: The Big PictureFeature Story: Making the Numbers Comparative Analysis Horizontal Analysis Vertical Analysis Ratio Analysis Liquidity Ratios Solvency Ratios Profitability Ratios Quality of Earnings Alternative Accounting Methods Pro Forma Income Improper Recognition APPENDIXESA. Present Value ConceptsPresent Value of a Single Future Amount Present Value of a Series of Future Amounts (Annuities) Time Periods and Discounting Computing the Present Value of a Bond Use of Calculators to Solve Present Value Problems B. Ethical StandardsCompetence Confidentiality Integrity Objectivity Cases for Management Decision MakingPhoto Credits Company Index Subject Index |
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