Managerial Accounting, 4th edition presents a modern and practical approach to managerial accounting through a combination of unique and flexible learning units, real-world concepts, and integrated practice, all within the business context. Praised for its decision-making framework, C&C Sports Continuing Case Story, and Data Analytics Cases, this new edition helps students develop a thorough understanding of how businesses make informed decisions and builds the skills required to be successful in tomorrow’s workplace.
TABLE OF CONTENTS
Brief Contents iii Author Biographies iv Preface v The Development Story xiii Acknowledgments xvi Dedication xvi 1 Accounting as a Tool for Management 1-1 Unit 1.1 What is Managerial Accounting? 1-2 Reality Check Checking out the new checkout 1-10 Unit 1.2 Different Strategies, Different Information 1-12 Reality Check What’s the price tag for a new strategy? 1-13 Reality Check When Just-In-Time Isn’t 1-16 Unit 1.3 Ethical Considerations in Managerial Accounting 1-18 Reality Check Blowing the whistle 1-23 Learning Objective Summary 1-24 Key Terms / Exercises / Problems / Cases / Endnotes TF1 C&C Sports, Managerial Accounting Context TF1-1 Learning Objective Summary TF1-7 Endnotes 2 Cost Behavior and Cost Estimation 2-1 Unit 2.1 Cost Behavior Patterns 2-2 Data Analytics in Action 2-5 Reality Check If it looks like a variable cost . . . 2-7 Unit 2.2 Cost Estimation 2-10 Reality Check Making the relevant range irrelevant 2-15 Unit 2.3 Contribution Margin Analysis 2-17 Reality Check The contribution margin recipe 2-19 Learning Objective Summary 2-24 Key Terms / Exercises / Problems / Cases / Data Analytics Problems / Endnotes 3 Cost–Volume–Profit Analysis and Pricing Decisions 3-1 Unit 3.1 Breakeven Analysis 3-3 Reality Check Who really uses breakeven analysis? 3-4 Unit 3.2 Cost–Volume–Profit Analysis 3-8 Data Analytics in Action 3-11 Reality Check Don’t let ghost restaurants scare you 3-13 Unit 3.3 Multiproduct CVP Analysis 3-16 Reality Check Mixing it up on a high flyer 3-17 Unit 3.4 Pricing Decisions 3-21 Reality Check Big data brings dynamic pricing strategies 3-24 Learning Objective Summary 3-26 Key Terms / Exercises / Problems / Cases / Data Analytics Problems / Endnotes 4 Product Costs and Job Order Costing 4-1 Unit 4.1 Product and Period Costs 4-2 Data Analytics in Action 4-5 Reality Check Showing cost classifications in published financial statements 4-7 Unit 4.2 Product Cost Flows 4-9 Reality Check What’s satisfying your sweet tooth going to cost? 4-14 Unit 4.3 Job Order Costing 4-17 Reality Check Will robots win the direct labor battle? 4-22 Unit 4.4 Underapplied and Overapplied Manufacturing Overhead 4-25 Reality Check Missing the Overhead Mark 4-26 Learning Objective Summary 4-30 Key Terms / Exercises / Problems / Cases / Data Analytics Problem TF2 Process Costing TF2-1 Data Analytics in Action TF2-5 Reality Check Costs in the oyster bed TF2-9 Learning Objective Summary TF2-13 Exercises / Problems / Cases / Endnotes TF3 Variable and Absorption Costing TF3-1 Reality Check Variable costing, German style TF3-6 Learning Objective Summary TF3-10 Exercises / Problems / Cases 5 Planning and Forecasting in a Manufacturing Setting 5-1 Unit 5.1 Planning and the Budgeting Process 5-3 Reality Check Starting from Zero 5-6 Unit 5.2 Performance Standards 5-9 Reality Check The diamond standard 5-9 Unit 5.3 Building the Master Budget: The Operating Budget 5-15 Reality Check is there a crystal ball for forecasting sales? 5-17 Data Analytics in Action 5-24 Unit 5.4 Building the Master Budget: The Cash Budget 5-31 Reality Check Budgeting around the world 5-35 Unit 5.5 Pro-Forma Financial Statements 5-40 Reality Check How the pros use pro-formas 5-43 Learning Objective Summary 5-46 Key Terms / Exercises / Problems / Cases / Data Analytics Problems / Endnotes 6 Performance Evaluation: Variance Analysis 6-1 Unit 6.1 Flexible Budgets: A Performance Evaluation Tool 6-3 Reality Check Who’s being flexible? 6-5 Data Analytics in Action 6-9 Unit 6.2 Variance Analysis: Direct Materials 6-14 Reality Check Going nuts over almonds 6-16 Reality Check A variance to remember 6-18 Unit 6.3 Variance Analysis: Direct Labor 6-21 Reality Check Labor efficiency strike out 6-24 Unit 6.4 Variance Analysis: Overhead 6-27 Learning Objective Summary 6-32 Key Terms / Exercises / Problems / Cases / Data Analytics Problems / Endnotes TF4 Standard Costing Systems TF4-1 Reality Check are standard costing systems headed for extinction? TF4-5 Learning Objective Summary TF4-12 Exercises / Problems / Endnotes 7 Activity-Based Costing and Activity-Based Management 7-1 Unit 7.1 Activity-Based Costing 7-3 Reality Check Making a package deal 7-6 Unit 7.2 Developing Activity-Based Product Costs 7-10 Reality Check ABC isn’t just for manufacturing 7-16 Unit 7.3 Activity-Based Management 7-20 Data Analytics in Action 7-22 Reality Check Working to add value 7-24 Learning Objective Summary 7-27 Key Terms / Exercises / Problems / Cases / Data Analytics Problems / Endnotes TF5 Customer Profitability TF5-1 Data Analytics in Action TF5-6 Reality Check All customers are not created equal TF5-7 Learning Objective Summary TF5-10 Exercises / Problems / Endnotes 8 Using Accounting Information to Make Managerial Decisions 8-1 Unit 8.1 Identifying Relevant Information 8-3 Reality Check How big is big data? 8-4 Unit 8.2 Special Order Pricing 8-9 Reality Check The dynamics of pricing 8-10 Unit 8.3 Outsourcing 8-14 Reality Check It’s time to shore up production 8-15 Unit 8.4 Allocating Constrained Resources 8-20 Data Analytics in Action 8-22 Reality Check Money doesn’t grow on trees 8-23 Unit 8.5 Keeping or Eliminating Operations 8-26 Reality Check Sometimes less is more 8-29 Learning Objective Summary 8-32 Key Terms / Exercises / Problems / Cases / Data Analytics Problems / Endnotes 9 Capital Budgeting 9-1 Unit 9.1 Capital Budgeting Decisions 9-2 Reality Check How much capital are we talking about? 9-5 Unit 9.2 Time Value of Money 9-8 Reality Check If you build it, they will stay 9-13 Unit 9.3 Discounted Cash Flow Techniques 9-15 Reality Check Don’t discount the choice of a discount rate 9-17 Data Analytics in Action 9-22 Unit 9.4 Other Capital Budgeting Techniques 9-25 Reality Check So many choices, so little money 9-28 Learning Objective Summary 9-31 Key Terms / Exercises / Problems / Cases / Data Analytics Problems / Endnotes 10 Decentralization and Performance Evaluation 10-1 Unit 10.1 Centralized versus Decentralized Organizations 10-2 Reality Check Taking center stage—or not 10-5 Unit 10.2 Segment Evaluation 10-8 Reality Check The whole isn’t always greater than the sum of its parts 10-9 Unit 10.3 Return on Investment 10-13 Data Analytics in Action 10-17 Reality Check Getting a healthy ROI 10-18 Unit 10.4 Residual Income and EVA® 10-20 Reality Check Finding value in compensation 10-24 Appendix Transfer Pricing 10-27 Reality Check The taxing transfer 10-28 Learning Objective Summary 10-33 Key Terms / Exercises / Problems / Cases / Data Analytics Problem / Endnotes 11 Performance Evaluation Revisited: A Balanced Approach 11-1 Unit 11.1 Performance Measures 11-2 Reality Check Batter up 11-5 Unit 11.2 The Balanced Scorecard 11-10 Data Analytics in Action 11-12 Reality Check Not your typical balanced scorecard 11-16 Unit 11.3 Benchmarking 11-20 Reality Check Benchmarking in health care 11-22 Appendix Measures of Meeting Delivery Expectations 11-23 Learning Objective Summary 11-28 Key Terms / Exercises / Problems / Cases / Data Analytics Problems / Endnotes 12 Financial Statement Analysis 12-1 Unit 12.1 Horizontal Analysis of Financial Statements 12-2 Reality Check How to slice an apple 12-6 Unit 12.2 Common-Size Financial Statements 12-8 Reality Check Hospitals suffer from bad debts 12-11 Unit 12.3 Ratio Analysis 12-15 Reality Check Don’t cash in too quickly 12-19 Unit 12.4 Industry Analysis 12-28 Reality Check Growing strong farms 12-29 Learning Objective Summary 12-33 Key Terms / Exercises / Problems / Cases / Endnotes 13 Statement of Cash Flows 13-1 Unit 13.1 Categorizing Cash Flows 13-2 Reality Check What’s in your wallet? 13-4 Unit 13.2 Cash Flows Provided by Operating Activities: The Indirect Method 13-8 Reality Check Running out of cash? 13-11 Unit 13.3 Cash Flows Provided by Investing and Financing Activities 13-13 Unit 13.4 Constructing and Interpreting the Statement of Cash Flows 13-19 Appendix Cash Flows Provided by Operating Activities: The Direct Method 13-24 Learning Objective Summary 13-30 Key Terms / Exercises / Problems / Cases / Endnotes Glossary G-1 Index I-1
NEW TO THIS EDITION
New alternate Chapter 5 that presents budgeting in a retail environment rather than a manufacturing environment
C&C product costs have been updated to better reflect current market conditions
Data Analytics in Action stories added in most chapters provide real-life examples of how data analytics are being used in managerial accounting contexts
A second data analytics problem has been added to eight chapters to provide instructors additional data analytics resources
16 new Reality Checks and 14 revised Reality Checks provide current examples of managerial accounting contexts
52% of end of chapter materials have been revised or are new
Revised author-created PowerPoint Lecture Videos
Business decision-making context relates to the real-world. Students learn managerial accounting through the context of business decision-making with a continuing case story and flexible learning units. The flexible order of chapters is designed around the context of a story that places business decisions in temporal order, helping students learn about managerial accounting and how to use managerial accounting to support decision-making.Engaging learning design builds student confidence. The learning design with integrated Active Learning units, Topic Focus units, and practice questions and exercises, keeps students engaged as they read manageable units of content written in a conversational style. Students interact more with managerial accounting topics and gain confidence with active demonstrations, exercises, and explorations before moving onto a new topic.Data Analytics coverage prepares students for the future of work. Data Analytics content, stories, and problems integrated throughout the text provide students with an appropriate introduction to data analytics and enhances their skills in manipulating and interpreting data.