1 Managerial Accounting 1-1
Just Add Water . . . and Paddle: Current Designs 1-1
Managerial Accounting Basics 1-3
Comparing Managerial and Financial Accounting 1-3
Management Functions 1-4
Organizational Structure 1-5
Managerial Cost Concepts 1-7
Manufacturing Costs 1-8
Product versus Period Costs 1-9
Illustration of Cost Concepts 1-10
Manufacturing Costs in Financial Statements 1-12
Balance Sheet 1-12
Income Statement 1-13
Cost of Goods Manufactured 1-14
Cost of Goods Manufactured Schedule 1-15
Managerial Accounting Today 1-16
Service Industries 1-16
Focus on the Value Chain 1-17
Balanced Scorecard 1-19
Business Ethics 1-19
Corporate Social Responsibility 1-20
The Value of Data Analytics 1-20
Data Analytics Insight: Using Data in Its Own World 1-21
Data Analytics in Action 1-44
2 Job Order Costing 2-1
Profiting from the Silver Screen: Disney 2-1
Cost Accounting Systems 2-3
Process Cost System 2-3
Job Order Cost System 2-4
Data Analytics Insight: Providing Service Through the Cloud 2-4
Job Order Cost Flow 2-5
Accumulating Manufacturing Costs 2-5
Assigning Manufacturing Costs 2-7
Raw Materials Costs 2-8
Factory Labor Costs 2-10
Predetermined Overhead Rates 2-13
Entries for Jobs Completed and Sold 2-16
Assigning Costs to Finished Goods 2-17
Assigning Costs to Cost of Goods Sold 2-17
Summary of Job Order Cost Flows 2-18
Job Order Costing for Service Companies 2-19
Advantages and Disadvantages of Job Order Costing 2-20
Applied Manufacturing Overhead 2-22
Under- or Overapplied Manufacturing Overhead 2-22
Data Analytics in Action 2-43
3 Process Costing 3-1
The Little Guy Who Could: Jones Soda 3-1
Overview of Process Cost Systems 3-3
Uses of Process Cost Systems 3-3
Process Costing for Service Companies 3-4
Similarities and Differences Between Job Order Cost and Process Cost Systems 3-4
Process Cost Flow and Assigning Costs 3-6
Process Cost Flow 3-6
Assigning Manufacturing Costs-Journal Entries 3-7
Equivalent Units 3-9
Weighted-Average Method 3-10
Refinements on the Weighted-Average Method 3-10
The Production Cost Report 3-13
Compute the Physical Unit Flow (Step 1) 3-14
Compute the Equivalent Units of Production (Step 2) 3-15
Compute Unit Production Costs (Step 3) 3-15
Prepare a Cost Reconciliation Schedule (Step 4) 3-16
Preparing the Production Cost Report 3-17
Costing Systems-Final Comments 3-18
Appendix 3A: FIFO Method for Equivalent Units 3-21
Equivalent Units Under FIFO 3-21
Comprehensive Example 3-22
FIFO and Weighted-Average 3-26
4 Activity-Based Costing 4-1
Precor is on Your Side: Precor 4-1
Traditional vs. Activity-Based Costing 4-3
Traditional Costing Systems 4-3
Illustration of a Traditional Costing System 4-3
The Need for a New Approach 4-4
Activity-Based Costing 4-5
ABC and Manufacturers 4-7
Identify and Classify Activities and Allocate Overhead to Cost Pools (Step 1) 4-8
Identify Cost Drivers (Step 2) 4-8
Compute Activity-Based Overhead Rates (Step 3) 4-9
Assign Overhead Costs to Products (Step 4) 4-10
Comparing Unit Costs 4-10
ABC Benefits and Limitations 4-13
The Advantage of Multiple Cost Pools 4-13
The Advantage of Enhanced Cost Control 4-15
The Advantage of Better Management Decisions 4-18
Some Limitations and Knowing When to Use ABC 4-18
Data Analytics Insight: Delivering People and Packages 4-19
ABC and Service Industries 4-20
Traditional Costing Example 4-20
Activity-Based Costing Example 4-21
Appendix 4A: Just-in-Time Processing 4-24
Objective of JIT Processing 4-25
Elements of JIT Processing 4-26
Benefits of JIT Processing 4-26
5 Cost-Volume-Profit 5-1
Don't Worry-Just Get Big: Amazon.com 5-1
Cost Behavior Analysis 5-3
Variable Costs 5-3
Fixed Costs 5-4
Relevant Range 5-5
Mixed Costs 5-7
Mixed Costs Analysis 5-8
High-Low Method 5-8
Importance of Identifying Variable and Fixed Costs 5-10
Cost-Volume-Profit Analysis 5-11
Basic Components 5-11
CVP Income Statement 5-12
Break-Even Analysis 5-16
Mathematical Equation 5-16
Contribution Margin Techniques 5-17
Graphic Presentation 5-19
Target Net Income and Margin of Safety 5-20
Target Net Income 5-20
Margin of Safety 5-21
CVP and Data Analytics 5-22
Appendix 5A: Regression Analysis 5-24
Data Analytics in Action 5-46
6 Cost-Volume-Profit Analysis: Additional Issues 6-1
Not Even a Flood Could Stop It: Whole Foods Market 6-1
Basic CVP Concepts 6-3
Basic Concepts 6-3
CVP and Changes in the Business Environment 6-5
Sales Mix and Break-Even Sales 6-7
Break-Even Sales in Units 6-8
Data Analytics Insight: Taking No Chances with Its Profits 6-10
Break-Even Sales in Dollars 6-10
Sales Mix with Limited Resources 6-13
Operating Leverage and Profitability 6-15
Effect on Contribution Margin Ratio 6-16
Effect on Break-Even Point 6-17
Effect on Margin of Safety Ratio 6-17
Operating Leverage 6-17
Appendix 6A: Absorption Costing versus Variable Costing 6-21
Example Comparing Absorption Costing with Variable Costing 6-21
Net Income Effects 6-24
Decision-Making Concerns 6-28
Potential Advantages of Variable Costing 6-30
Data Analytics in Action 6-51
7 Incremental Analysis 7-1
Keeping It Clean: Method Products 7-1
Decision-Making and Incremental Analysis 7-3
Incremental Analysis Approach 7-3
How Incremental Analysis Works 7-4
Qualitative Factors 7-5
Relationship of Incremental Analysis and Activity-Based Costing 7-5
Types of Incremental Analysis 7-6
Special Orders 7-6
Make or Buy 7-8
Opportunity Cost 7-9
Sell or Process Further 7-11
Single-Product Case 7-11
Multiple-Product Case 7-12
Repair, Retain, or Replace Equipment 7-14
Eliminate Unprofitable Segment or Product 7-16
8 Pricing 8-1
They've Got Your Size-and Color: Zappos.com 8-1
Target Costing 8-3
Establishing a Target Cost 8-4
Cost-Plus and Variable-Cost Pricing 8-5
Cost-Plus Pricing 8-5
Limitations of Cost-Plus Pricing 8-7
Variable-Cost Pricing 8-8
Time-and-Material Pricing 8-10
Transfer Prices 8-13
Negotiated Transfer Prices 8-14
Cost-Based Transfer Prices 8-18
Market-Based Transfer Prices 8-19
Effect of Outsourcing on Transfer Pricing 8-19
Transfers Between Divisions in Different Countries 8-20
Data Analytics Insight: Setting the Optimal Price 8-20
Appendix 8A: Absorption-Cost and Variable-Cost Pricing 8-22
Absorption-Cost Pricing 8-23
Variable-Cost Pricing 8-24
Appendix 8B: Transfers Between Divisions in Different Countries 8-26
Data Analytics in Action 8-45
9 Budgetary Planning 9-1
What's in Your Cupcake?: Erin McKenna's Bakery NYC 9-1
Effective Budgeting and the Master Budget 9-3
Budgeting and Accounting 9-3
The Benefits of Budgeting 9-3
Essentials of Effective Budgeting 9-4
The Master Budget 9-7
Sales, Production, and Direct Materials Budgets 9-8
Sales Budget 9-8
Production Budget 9-10
Direct Materials Budget 9-10
Direct Labor, Manufacturing Overhead, and S&A Expense Budgets 9-14
Direct Labor Budget 9-14
Manufacturing Overhead Budget 9-15
Selling and Administrative Expense Budget 9-15
Budgeted Income Statement 9-16
Data Analytics Insight: That's Some Tasty Data! 9-17
Cash Budget and Budgeted Balance Sheet 9-18
Cash Budget 9-18
Budgeted Balance Sheet 9-21
Budgeting in Nonmanufacturing Companies 9-23
Merchandisers 9-23
Service Companies 9-24
Not-for-Profit Organizations 9-25
Data Analytics in Action 9-48
10 Budgetary Control and Responsibility Accounting 10-1
Pumpkin Madeleines and a Movie: The Roxy Hotel Tribeca 10-1
Budgetary Control and Static Budget Reports 10-3
Budgetary Control 10-3
Static Budget Reports 10-4
Flexible Budget Reports 10-7
Why Flexible Budgets? 10-7
Developing the Flexible Budget 10-9
Flexible Budget-A Case Study 10-10
Flexible Budget Reports 10-12
Data Analytics Insight: These Forecasts Move with the Times! 10-13
Responsibility Accounting and Responsibility Centers 10-14
Controllable versus Noncontrollable Revenues and Costs 10-16
Principles of Performance Evaluation 10-16
Data Analytics Insight: Hitting the Road with Zero-Based Budgeting 10-18
Responsibility Reporting System 10-18
Types of Responsibility Centers 10-19
Investment Centers 10-24
Return on Investment (ROI) 10-24
Responsibility Report 10-25
Alternative Measures of ROI Inputs 10-26
Improving ROI 10-26
Appendix 10A: ROI versus Residual Income 10-30
Residual Income Compared to ROI 10-31
Residual Income Weakness 10-31
Data Analytics in Action 10-52
11 Standard Costs and Balanced Scorecard 11-1
80,000 Different Caffeinated Combinations: Starbucks 11-2
Overview of Standard Costs 11-3
Distinguishing Between Standards and Budgets 11-4
Setting Standard Costs 11-4
Direct Materials Variances 11-8
Analyzing and Reporting Variances 11-8
Calculating Direct Materials Variances 11-10
Direct Labor and Manufacturing Overhead Variances 11-13
Direct Labor Variances 11-13
Data Analytics Insight: Speedy Data to the Rescue! 11-16
Manufacturing Overhead Variances 11-16
Variance Reports and Balanced Scorecards 11-18
Reporting Variances 11-18
Income Statement Presentation of Variances 11-19
Balanced Scorecard 11-20
Appendix 11A: Standard Cost Accounting System 11-24
Journal Entries 11-24
Ledger Accounts 11-26
Appendix 11B: Overhead Controllable and Volume Variances 11-26
Overhead Controllable Variance 11-27
Overhead Volume Variance 11-28
Data Analytics in Action 11-47
12 Planning for Capital Investments 12-1
Floating Hotels: Holland America Line 12-2
Capital Budgeting and Cash Payback 12-3
Cash Flow Information 12-3
Illustrative Data 12-4
Cash Payback 12-4
Net Present Value Method 12-6
Equal Annual Cash Flows 12-7
Unequal Annual Cash Flows 12-8
Choosing a Discount Rate 12-9
Simplifying Assumptions 12-10
Comprehensive Example 12-10
Capital Budgeting Challenges and Refinements 12-12
Intangible Benefits 12-12
Profitability Index for Mutually Exclusive Projects 12-14
Risk Analysis 12-15
Post-Audit of Investment Projects 12-16
Internal Rate of Return 12-17
Comparing Discounted Cash Flow Methods 12-18
Annual Rate of Return 12-20
Data Analytics Insight: Increasing the Chances of Gaming Wins 12-21
Data Analytics in Action 12-37
13 Statement of Cash Flows 13-1
Got Cash?: Microsoft 13-2
Usefulness and Format of the Statement of Cash Flows 13-3
Usefulness of the Statement of Cash Flows 13-3
Classification of Cash Flows 13-3
Significant Noncash Activities 13-4
Format of the Statement of Cash Flows 13-5
Preparing the Statement of Cash Flows-Indirect Method 13-6
Indirect and Direct Methods 13-7
Indirect Method-Computer Services Company 13-7
Step 1: Operating Activities 13-9
Summary of Conversion to Net Cash Provided by Operating Activities-Indirect Method 13-12
Step 2: Investing and Financing Activities 13-13
Step 3: Net Change in Cash 13-15
Analyzing the Statement of Cash Flows 13-17
Free Cash Flow 13-17
Appendix 13A: Statement of Cash Flows-Direct Method 13-20
Step 1: Operating Activities 13-20
Step 2: Investing and Financing Activities 13-26
Step 3: Net Change in Cash 13-27
Appendix 13B: Worksheet for the Indirect Method 13-27
Preparing the Worksheet 13-28
Appendix 13C: Statement of Cash Flows-T-Account Approach 13-32
14 Financial Analysis: The Big Picture 14-1
It Pays to Be Patient: Warren Buffett 14-2
Sustainable Income and Quality of Earnings 14-3
Sustainable Income 14-3
Quality of Earnings 14-7
Horizontal Analysis and Vertical Analysis 14-9
Horizontal Analysis 14-10
Vertical Analysis 14-12
Ratio Analysis 14-15
Liquidity Ratios 14-16
Solvency Ratios 14-17
Profitability Ratios 14-17
Financial Analysis and Data Analytics 14-18
Comprehensive Example of Ratio Analysis 14-18
Appendix A Time Value of Money A-1
Interest and Future Values A-2
Nature of Interest A-2
Future Value of a Single Amount A-3
Future Value of an Annuity A-5
Present Values A-8
Present Value Variables A-8
Present Value of a Single Amount A-9
Present Value of an Annuity A-11
Time Periods and Discounting A-13
Present Value of a Long-Term Note or Bond A-13
Capital Budgeting Situations A-16
Using Financial Calculators A-18
Present Value of a Single Sum A-19
Present Value of an Annuity A-19
Future Value of a Single Sum A-20
Future Value of an Annuity A-20
Internal Rate of Return A-20
Useful Applications of the Financial Calculator A-21
Cases For Management Decision-Making (Available in Wiley's online course.)
Company Index I-1
Subject Index I-3
Rapid Review: Chapter Content
