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Management Accounting 3e WileyPLUS Learning Space

Management Accounting 3e WileyPLUS Learning Space

ISBN: 978-0-730-33563-4

352 pages

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Description

Eldenburg’s third edition covers all the core topics across the two undergraduate management accounting courses, with an increased New Zealand business focus and more in-depth coverage of not-for-profit organisations. Delivered for the first time as a WileyPLUS Learning Space interactive textbook, this third edition brings course content to life, with rich media such as practitioner videos, case studies and ‘In a Nutshell’ revision materials embedded at the point of learning.

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About the authors xi

Preface xii

Part 1 Management accounting and cost management 1

Chapter 1 The role of accounting information in management decision making 2

1.1 Management decision making 4

1.2 Cost and management accounting for decision making 6

1.3 Management accounting information and the quality of decision making 10

1.4 Value chain analysis: a framework for management accounting 11

Chapter 2 Cost concepts, behaviour and estimation 29

2.1 Cost behaviour 31

2.2 Variable, fixed and mixed costs 31

2.3 Cost estimation techniques 34

2.4 Estimating the cost function 38

2.5 Regression analysis 41

2.6 Uses and limitations of cost estimates 48

Chapter 3 A costing framework and cost allocation 71

3.1 Cost objects — need for cost information 73

3.2 Direct and indirect costs 74

3.3 Process of indirect cost allocation 76

3.4 A costing framework 78

3.5 Applying the costing framework in a service entity setting 79

3.6 Applying the costing framework in a support department setting 83

3.7 Limitations of cost allocation data 93

Chapter 4 Cost–volume–profit (CVP) analysis 122

4.1 Cost–volume–profit (CVP) analysis 124

4.2 Breakeven point 125

4.3 CVP analysis for a single product 125

4.4 CVP analysis for multiple products 128

4.5 Assumptions and limitations of CVP analysis 130

4.6 Margin of safety and degree of operating leverage 130

Chapter 5 Planning — budgeting and behaviour 163

5.1 The role of planning and budgeting for improved performance and value creation: testing alternative actions 165

5.2 Impact of likely actions on profit, assets and cash flow management 166

5.3 Planning in cost centres 172

5.4 Contemporary approaches to budgeting 173

5.5 The behavioural implications of budgeting 175

5.6 Beyond Budgeting 177

Chapter 6 Operational budgets 194

6.1 Budgeting — a tool for short- and long-term planning 196

6.2 The role of the master budget 198

6.3 Developing a cash budget 204

6.4 Budgets as performance benchmarks 208

6.5 Budgets, incentives and rewards 211

Chapter 7 Job and process costing systems 242

7.1 The flow of costs through the manufacturing process 244

7.2 Calculating the inventoriable product cost for customised products 246

7.3 Allocating manufacturing overhead 248

7.4 Accounting for the cost of mass-produced goods 256

7.5 Work in process and equivalent units 258

7.6 Process costing methods 258

7.7 Spoilage, rework and scrap in job and process costing 259

7.8 Uses and limitations of job and process cost information 262

Chapter 8 Flexible budgets, standard costs and variance analysis 282

8.1 Flexible budgets 284

8.2 Standard costs 284

8.3 Variance analysis 286

8.4 Flexible budgeting in practice 288

Chapter 9 Variance analysis: revenue and cost 307

9.1 Identifying variances 309

9.2 Profit- and revenue-related variances 310

9.3 Direct cost variances 316

9.4 Analysing direct cost variance information 320

9.5 Overhead variances 322

9.6 Using overhead variance information 327

9.7 Cost variance adjustments in the general ledger 329

Chapter 10 Activity analysis: costing and management 355

10.1 Activity-based costing (ABC) and conventional costing 357

10.2 ABC cost hierarchy 360

10.3 Understanding and implementing an ABC model 362

10.4 Activity-based management (ABM) 365

10.5 Benefits, costs and issues related to ABC 367

Chapter 11 Relevant costs for decision making 394

11.1 Non-routine operating decisions 396

11.2 Special orders 397

11.3 Product line and business segment (keep or drop) decisions 400

11.4 Insource or outsource (make or buy) decisions 402

11.5 Constrained resources 404

11.6 Qualitative factors important to non-routine operating decisions 406

11.7 Joint products and costs 408

PART 2 Management accounting, extending performance measurement and strategy 451

Chapter 12 Strategy and control 452

12.1 Management accounting and control in a ‘flat world’ 454

12.2 Introduction to strategy and control 455

12.3 Frameworks for strategy and control 457

12.4 Management responsibility and accountability practices 465

Chapter 13 Capital budgeting and strategic investment decisions 476

13.1 Capital investment decisions 478

13.2 Relevant cash flows 479

13.3 Net present value (NPV) method 480

13.4 Uncertainties and sensitivity analysis 483

13.5 Alternative methods used for capital investment decisions 486

13.6 Strategic considerations for investment decisions 489

13.7 Income taxes and the net present value method 496

13.8 Inflation and the net present value method 497

Chapter 14 The strategic management of costs and revenues 522

14.1 Value chain activities for continuous cost improvement 524

14.2 Customer profitability 525

14.3 Building desired profit into decisions 533

14.4 Kaizen costing 538

14.5 Life cycle costing 541

14.6 Price management: pricing methods 542

Chapter 15 Strategic management control: a lean perspective 566

15.1 Lean thinking philosophy 568

15.2 Theory of constraints 571

15.3 Just-in-time (JIT) production 578

15.4 Total quality management (TQM): managing quality 579

Chapter 16 Responsibility accounting, performance evaluation and transfer pricing 595

16.1 Decision-making authority and responsibility 597

16.2 Responsibility accounting 599

16.3 Income-based performance evaluation 602

16.4 Transfer pricing 609

16.5 Additional transfer price considerations 614

Chapter 17 The balanced scorecard and strategy maps 630

17.1 Measuring organisational performance 632

17.2 Strategy maps 633

17.3 The balanced scorecard 635

17.4 Steps in implementing a balanced scorecard 643

17.5 Strengths and weaknesses of the balanced scorecard 651

Chapter 18 Rewards, incentives and risk management 673

18.1 Agency theory and rewards 675

18.2 The structure of reward systems 677

18.3 Forms of incentives 678

18.4 Structuring reward systems containing incentives 679

18.5 Emerging themes in reward systems 683

18.6 Risk management 685

Chapter 19 Sustainability management accounting 707

19.1 Sustainability and management accounting 709

19.2 Sustainability, ethics and integrated thinking 717

19.3 Scope and benefits of sustainability management accounting 720

19.4 Sustainability management accounting tools 724

19.5 Sustainability management accounting — issues relating to successful integration 733

Summary 736

Key terms 738

Management accounting case discussion 739

Self-study problems 740

Questions 741

Exercises 741

Problems 742

Endnotes 751

Acknowledgements 753

  • Expansive Coverage: Eldenburg’s third edition is designed specifically to cover all the core topics from the two management accounting courses – Cost Accounting and Strategic Management Accounting
  • Hear From Practitioners: Exclusive videos from high-profile ANZ practitioners to provide insights into real-world application of accounting
  • Interactive Case Studies: Interactive management accounting cases motivate students to test their comprehension and critically apply course concepts to real world contexts
  • Revision Modules: ‘In a Nutshell’ revision materials integrated throughout to help students engage with the course content and enhance their learning
  • Interactive Online Textbook: The WileyPLUS Learning space interactive textbook is full rich media and activities embedded at the point of learning
  • Personalised Practise: The Student Adaptive Pathway powered by ORION provides personalised practise and instant feedback to motivate and build students’ proficiency