Beruflich Dokumente
Kultur Dokumente
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MANAGERIAL
ACCOUNTING
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MANAGERIAL
ACCOUNTING
Creating Value in a
Dynamic Business Environment
Seventh Edition
Ronald W. Hilton
Cornell University
Boston Burr Ridge, IL Dubuque, IA Madison, WI New York San Francisco St. Louis
Bangkok Bogot Caracas Kuala Lumpur Lisbon London Madrid Mexico City
Milan Montreal New Delhi Santiago Seoul Singapore Sydney Taipei Toronto
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www.mhhe.com
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VI Preface
Preface VII
VIII Preface
Managerial Accounting.
The world of business is changing dramatically.
As a result, the role of managerial accounting
is very different than it was even a decade
ago. Today, managerial accountants serve as
internal business consultants, working side-by-
side in cross-functional teams with managers
from all areas of the organization. For a
thorough understanding of managerial
accounting, students should not only be able to
produce accounting information, but also
understand how managers are likely to use
and react to the information.
The goal of Managerial Accounting is to
acquaint students of business with the
fundamental tools of management accounting
and to promote their understanding of the
dramatic ways in which the field is changing.
The emphasis throughout the text is on using
accounting information to help manage an
organization.
Preface IX
Focus Companies.
Focus Companies provide a powerful strategy for
fostering learning, and Hiltons integration of focus
The company story acts as a hook to get
companies throughout the text is unmatched by any students interested in the chapter material.
other managerial accounting book. Each chapter Michele Matherly,
University of North Carolina at Charlotte
introduces important managerial accounting topics
within the context of a realistic company. Students
see the immediate impact of managerial accounting
decisions on companies and gain exposure to
different types of organizations.
In today's world, it is important to teach the
student from a standpoint of a variety of
Balanced. different business organizations. Hilton does a
Hiltons Managerial Accounting offers the most great job of diversifying his material among
various types of business organizations.
balanced coverage of manufacturing and service Marilyn Ciolino,
companies. He recognizes that students will be Delgado Community College
Flexible.
Managerial Accounting is written in a modular format
The book goes beyond covering the basics and
allowing topics to be covered in the order you want. organizes and integrates contemporary topics nicely.
For example, Chapter 17 covers absorption, variable Harrison McCraw,
State University of West Georgia
and throughput costing. Many instructors like to cover
this topic early in the course. So, Chapter 17 is
written so that it can be assigned right after Chapter
3. A table showing the text's flexibility is in the
Instructor's Resource Manual.
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X Preface
How Does Managerial Accounting: Creating
Value in a Dynamic Business Environment
Bring the Real World into Your Classroom?
FOCUS COMPANIES
Students need to see the relevance of
managerial accounting information in order
to actively engage in learning the material.
Ron Hilton found that by using Focus
Companies to illustrate concepts, students INSERT tearsheet from
immediately saw the significance of the front endsheet
(to come)
material and became excited about the
content. Hiltons integration of Focus
Companies throughout the text is
unmatched by any other managerial
accounting textbook. Each chapter
introduces important managerial topics
THIS CHAPTERS FOCUS COMPANY
within the context of a realistic company.
is The Walt Disney Company. This entertainment ser-
vices company is a giant in the industry with theme
parks, feature film studios, animation studios, televi-
sion broadcasting, hotels and resorts, and retail stores.
Using the Walt Disney Company as an illustration, we
will introduce the field of managerial accounting. We
will explore how managerial accountants work in part-
Whenever the Focus Company is nership with managers to add value to the organiza-
tion. The major themes of managerial accounting also
are introduced, and we will return to them throughout
the book.
presented in the chapter, its logo is shown
so the student sees its application to the Each chapter is built around a focus
company, in which the chapters key points
are illustrated. This chapters focus is on
The Walt Disney Company. The focus
text topic. companies in subsequent chapters are
not real companies, but they are realistic
scenarios built on actual company
practices. Whenever the focus company
is discussed in the chapter, the company
logo appears in the margin.
Walt D isney
CONTRAST COMPANIES Company
IN CONTRAST
to the entertainment services setting of
New to this edition, a Contrast Company is The Walt Disney Company, we will turn
our attention to Gap, Inc. This major
clothing retailer has over 3,000 stores
now introduced in each chapter. In most around the world, which sell Gap,
Banana Republic, Old Navy, and Forth &
Towne apparel. We will explore Gaps
cases these highlight an industry different value chain, which is the set of linked,
value-creating activities, ranging from
securing basic raw materials and energy
to the ultimate delivery of products and
from that of the Focus Company. This services. As a retailer, Gap focuses on
apparel design, marketing, and sales. All
manufacturing of its clothing lines is
service-industry firms and other non- in an industry that is different from that of the focus company. In this chapter, the focus company (Walt Disney) is an
entertainment services company, whereas the contrast company (The Gap) is a fashion retailer.
Preface XI
REAL-WORLD FOCUS
The Ethical Climate of Business and the Role of the Accountant Real-World Examples
Who among us is not shocked and dismayed by the seemingly endless stream of cor-
LO9
Managerial Accounting:
A Business Partnership with Management
We are looked upon as
The role of managerial accounting is very different now than it was even a decade ago.
In the past, managerial accountants operated in a strictly staff capacity, usually physi-
In Their Own Words
cally separated from the managers for whom they provided reports and information.
Quotes from both practicing managers and
business advisors, more
than just accountants, Nowadays, managerial accountants serve as internal business consultants, working
and that has a lot to do side-by-side in cross-functional teams with managers from all areas of the organiza-
tion. Rather than isolate managerial accountants in a separate accounting department,
managerial accountants are included in the
with the additional
analysis and the companies now tend to locate them in the operating departments where they are work-
forward-looking goals ing with other managers to make decisions and resolve operational problems.
Management
MASS CUSTOMIZATION
Management Accounting Practice
Accounting
Practice
There is no better way to make, sell, and deliver PCs than the way Dell Computer does it, and no-
body executes that model better than Dell. The companys machines are made to order and deliv-
The managerial accounting practices of well-
Dell Computer
ered directly to customers, who get the exact machines they want cheaper than they can get them
from Dells competition. Dell has some 24 facilities in and around Austin and employs more than
18,000 local workers. Dell is improving its earnings and gaining market share even in tough eco-
known, real-world organizations are highlighted in
nomic times.2 Nevertheless, Michael Dell, the companys restless founder, is constantly looking for
ways to improve the companys operations. In one year alone, Dell cut $1 billion out of its costshalf
from manufacturingand Dell executives vowed to cut another $1 billion.
these boxes. They stimulate student interest and
Visit the Topfer Manufacturing Center in Austin, and its hard to conceive how Dell could be
any more efficient. Workers already scuttle about in the 200,000-square-foot plant like ants on a provide a springboard for classroom discussion.
hot plate. Gathered in cramped six-person cells, they assemble computers from batches of parts
that arrive via a computer-directed conveyor system overhead. If a worker encounters a problem,
XII Preface
A FOCUS ON EXCEPTIONAL
END-OF-CHAPTER MATERIAL
Managerial Accounting is known for its comprehensive and reliable end-of-chapter material.
Each chapter includes an extensive selection of assignment material including Review Questions,
Exercises, Problems, and Cases.
Review Problems present both a problem and a Several costs incurred by Myrtle Beach Golf Equipment, Inc. are listed below. For each cost, indicate
which of the following classifications best describe the cost. More than one classification may apply to
the same cost item. For example, a cost may be both a variable cost and a product cost.
Key Terms
For each terms definition refer to the indicated page, or turn to the glossary at the end of the text.
Review Questions, Exercises, Problems, and Problems All applicable Problems are available with McGraw-Hills Homework Manager TM.
the instructor on the difficulty level and time Finished-goods inventory, 12/31/x1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Purchases of raw material in 20x1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Utilities for factory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
15,400
39,000
6,000
Utilities for sales and administrative offices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,500
required for each problem. Numerous adapted Other selling and administrative expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Indirect-labor cost incurred . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Depreciation on factory building . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4,000
29,000
3,800
Preface XIII
Each chapter includes problems and cases exploring key business areas.
Logos next to the problems identify these topics.
Business Excel
International Issues
Communication Template
EXCEL
Spreadsheet applications are essential to contemporary accounting practice. Students must rec-
ognize the power of spreadsheets and know how accounting data are presented in them. We dis-
cuss Excel applications where appropriate in the text.
Exercise 334
Overapplied or Underapplied The following information pertains to Trenton Glass Works for the year just ended.
Overhead Budgeted direct-labor cost: 75,000 hours at $16 per hour
(LO 4, 5) Actual direct-labor cost: 80,000 hours at $17.50 per hour
Budgeted manufacturing overhead: $997,500
Required:
1. Compute the firms predetermined overhead rate, which is based on direct-labor hours.
2. Calculate the overapplied or underapplied overhead for the year.
3. Prepare a journal entry to close out the Manufacturing Overhead account into Cost of Goods Sold.
4. Build a spreadsheet: Construct an Excel spreadsheet to solve requirements (1) and (2) above. Show
how the solution will change if the following data change: budgeted manufacturing overhead was
$990,000, property taxes were $25,000, and purchases of indirect material amounted to $97,000.
Exercise 335
Predetermined Overhead The following data pertain to the Oneida Restaurant Supply Company for the year just ended.
Problem 541
Activity-Based Costing World Gourmet Coffee Company (WGCC) is a distributor and processor of different blends of coffee.
(LO 1, 2, 4, 5, 7) The company buys toffee beans from around the world and roasts, blends, and packages them for resale.
WGCC currently has 15 different coffees that it offers to gourmet shops in one-pound bags. The major
cost is raw materials; however, there is a substantial amount of manufacturing overhead in the predom-
XIV Preface
Preface XV
Heavily revised coverage of key topical areas, brand new pedagogy for the most
challenging topics, and new assignment material make the seventh edition more
useful than ever to students and faculty alike.
Chapter 6: Reorganization and revision of activity- Chapter 14: Introduction of Contrast Company: Interna-
based management coverage. New Focus Company: tional Chocolate Company, a chocolate producer. (In
Patio Grill Company, a manufacturer. Introduction of contrast to the Focus Company: Worldwide Airways, an
Contrast Company: Federal Express, a worldwide ex- airline.)
press delivery service.
Chapter 15: Introduction of Contrast Company: Marine
Chapter 7: Introduction of Contrast Company: Cosmos Services, a marina service and construction company.
Communications Technology, a manufacturer of commu- (In contrast to the Focus Company: Sydney Sailing Sup-
nications satellites. (In contrast to the Focus Company: plies, a sailboat manufacturer.)
Tasty Donuts, a restaurant chain.)
Chapter 16: Introduction of Contrast Company: High
Chapter 8: Introduction of Contrast Company: Accu- Country Department Stores, a retailer. (In contrast to the
Time, a manufacturer of digital clocks. (In contrast to the Focus Organization: City of Mountainview, a city govern-
Focus Company: Seattle Contemporary Theater, a non- ment.)
profit theater organization.)
Chapter 18: Introduction of Contrast Company: Interna-
Chapter 9: Movement of the chapter's appendix cover- tional Chocolate Company, a chocolate producer. (In
ing inventory management to a stand-alone appendix at contrast to the Focus Company: Riverside Clinic, a
the end of the textbook. Introduction of Contrast Com- health care provider.)
pany: Philadelphia Fitness Cooperative, a fitness club.
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XVI Preface
MCGRAW-HILLS MCGRAW-HILLS
HOMEWORK MANAGER HOMEWORK MANAGER
PLUS
McGraw-Hill's Homework Manager is a Web-based
homework management system that gives you unparal- McGraw-Hill's Homework Manager Plus combines the
leled power and flexibility in creating homework assign- power of Homework Manager with the latest interactive
ments, tests, and quizzes. Homework Manager learning technology to create a comprehensive, fully inte-
duplicates problem structures directly from the end-of- grated online study package.
chapter material in your McGraw-Hill textbook, using al-
Students using Homework Manager Plus can access not
gorithms to provide limitless variations of textbook
only Homework Manager itself, but the Interactive On-
problems. Use Homework Manager to supply online self-
line Textbook as well. Far more than a textbook on a
graded practice tests for students, or create assignments
screen, this resource is completely integrated into Home-
and tests with unique versions of every problem: Home-
work Manager, allowing students working on assignments
work Manager can grade assignments automatically, pro-
to click a hotlink and instantly review the appropriate ma-
vide instant feedback to students, and store all results in
terial in the textbook.
your private gradebook. Detailed results let you see at a
glance how each student does and easily track the By including Homework Manager Plus with your textbook
progress of every student in your course. adoption, you're giving your students a vital edge as they
progress through the course and ensuring that the help they
need is never more than a mouse click away.
INTERACTIVE ONLINE
VERSION OF THE TEXTBOOK
In addition to the textbook, students can rely on this online
version of the text for a convenient way to study. While
other publishers offer a simple PDF, this interactive Web-
based textbook contains hotlinks to key definitions and is
integrated with Homework Manager to give students quick
access to relevant content as they work through problems,
exercises, and practice quizzes.
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Preface XVII
TOPIC TACKLER I think this tool is a great way for students to get
additional help in some of the challenging areas of
This software is a complete
Managerial Accounting. It allows them to see the
tutorial focusing on areas in topic explained again, see additional examples, and
the course that give students try extra exercises to help them further their skills and
the most trouble. It provides knowledge.
Laura Rickett,
help on two key topics for
Kent State University
each chapter by use of
Video Clips
PowerPoint Slide Shows
Interactive Exercises
Self-Grading Quizzes
iPOD CONTENT
Harness the power of one of the most popular technology tools students use
todaythe Apple iPod. Our innovative approach allows students to download
audio and video presentations as well as quizzes for each chapter in the text,
right into their iPod and take learning materials with them wherever they go. It
makes review and study time as easy as putting on headphones. Visit the
Managerial Accounting Online Learning Center (www.mhhe.com/hilton7e) to
learn more details on available iPod contentand enhance your learning ex-
perience today.
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XVIII Preface
PAGEOUT
McGraw-Hills Course Management System,
PageOut, is the easiest way to create a Web site
for your accounting course. Theres no need for
HTML coding, graphic design, or a thick how-to
book. Just fill in a series of boxes and click on one
of our professional designs. In no time your course
is online with a Web site that contains your
syllabus. If you need help, our team of product
specialists is ready to take your course materials
and build a custom Web site to your specifications.
Preface XIX
FOR STUDENTS
More and more students are studying online. That's why we offer an Online
Learning Center (OLC) that follows Managerial Accounting chapter by chapter.
It doesn't require any building or maintenance and is ready to go the moment you
type in the URL. The OLC includes:
FOR INSTRUCTORS
The book's password-protected Instructor's site OLC contains essential course
materials. You can pull all of this material into your PageOut course syllabus or
use it as part of another online course management system such as Blackboard,
WebCT or eCollege. You get all the resources available to students, plus...
XX Preface
SUPPLEMENTS
Hiltons instructor and student support materials are comprehensive,
providing you with superior classroom support and bringing out the
best in your students.
The technology supplements and
instructor resources are top notch, and
very appropriate for our students.
Marilyn Okleshen,
Minnesota State University Mankato
Instructor Supplements
Managerial Accounting
Video Library
It has excellent student and instructor
resources.
These short videos, developed by
Michael Tyler, Dallas County Community College,
Barry University provide for classroom discussion.
Excellent illustrations, pictures, The focus is on the preparation,
support materials, etc. analysis, and use of accounting
K.R. Balachandran, information for business decision
New York University
making.
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Preface XXI
Student Supplements
Excel Templates
(Available on the Online Learning Center)
XXII Preface
Acknowledgments
I Am Grateful
I would like to express my appreciation to people who have provided assistance in the development of
this textbook. First, my gratitude goes to the thousands of managerial accounting students I have had
the privilege to teach over many years. Their enthusiasm, comments, and questions have challenged
me to clarify my thinking about many topics in managerial accounting.
Second, I express my sincere thanks to the following professors who provided extensive reviews for
the seventh edition:
REVIEWERS Robert Eskew, Purdue University Hamid Mohammadi, St. Xavier University
Andrew Felo, Pennsylvania State Karl Putnam, University of Texas at El Paso
Linda Brown, St. Ambrose University University at Great Valley Roy Regel, University of Montana at
Jeffrey Archambault, Marshall University Michael Flores, Wichita State University Missoula
Ben Baker, Davidson College Sueann Hely, West Kentucky Community & Laura Rickett, Kent State University
K. R. Balachandran, New York University Technical College Don Samelson, Colorado State University
Michael Blue, Bloomsburg University Paul Juras, Wake Forest University Angela Sandberg, Jacksonville State
Wayne Bremser, Villanova University Sherrie Koechling, Lincoln University University
Richard Campbell, University of Rio Christy Larkin, Bacone College Rebecca Sawyer, Univesity of North
Grande Lois Mahoney, Eastern Michigan Carolina at Wilmington
Marilyn Ciolino, Delgado Community University Pamela Schwer, St. Xavier University
College Maureen Mascha, Marquette University Thomas Selling, Thunderbird, the Garvin
Paul Copley, James Madison University Michele Matherly, University of North School of International Management
Patricia Derrick, George Washington Carolina at Charlotte Michael Tyler, Barry University
University Harrison McCraw, State University of Priscilla Wisner, Thunderbird, the Garvin
Barbara Durham, University of Central West Georgia School of International Management
Florida Jamshed Mistry, Worcester Polytechnic Richard Young, Ohio State University
Institute
PAST EDITION Maureen Crane, California State University, Marilyn Okleshen, Minnesota State
REVIEWERS Fresno University
My grateful appreciation is extended to Stephen Dempsey, University of Vermont Mohamed Onsi, Syracuse University
those who reviewed previous editions: Martha Doran, San Diego State University Samuel Phillips, Shenandoah University
Allan Drebin, Northwestern University Frederick Rankin, Washington University
Denise Guithues Amrhein, Saint Louis James Emig, Villanova University Lanny Solomon, University of Missouri at
University Michael Flores, Wichita State University Kansas City
Florence Atiase, University of Texas at Kimberly Frank, University of Nevada at Lynda Thoman, Purdue University
Austin Las Vegas Wendy Tietz, Kent State University
Rowland Atiase, University of Texas at Alan Friedberg, Florida Atlantic University Ralph Tower, Wake Forest University
Austin Edward Goodhart, Shippensburg University Mark Turner, Stephen F. Austin State
K. R. Balachandran, New York University, Paul Juras, Wake Forest University University
Frederick Bardo, Shippensburg University Stacey Konesky, Kent State University Bill Wempe, Texas Christian University
Linda Bowen, University of North Carolina James Lasseter, Jr. University of South James Williamson, San Diego State
Wayne Bremser, Villanova University Florida University
Richard Brody, University of New Haven Angelo Luciano, Columbia College Priscilla Wisner, Graduate School of
Gyan Chandra, Miami University Ana Marques, University of Texas at Austin International Management
Paul Copley, University of Georgia Sanjay Mehrotra, Northwestern University
Cynthia Nye, Bellevue University
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Preface XXIII
I once again thank those individuals whose input over the last edition has helped the book to evolve
to its present form, especially: Noah Barsky, Villanova University; Mohamed Bayou, University of
Michigan, Dearborn; Bruce Bradford, Fairfield University; Dan Daly, Boston College; Theresa
Hammond, Boston College; and Clifford Nelson, University of Connecticut.
I want to thank Beth Woods and Ilene Persoff for their thorough checking of the text and solutions
manual for accuracy and completeness.
The supplements are a great deal of work to prepare. I appreciate the efforts of those who prepared
them, since these valuable aids make teaching the course easier for everyone who uses the text.
Lanny Solomon of the University of Missouri at Kansas City prepared the Test Bank and the
Instructor's Manual. Peggy Hussey of Northern Kentucky University prepared the PowerPoint slides
and Excel spreadsheet templates. Douglas deVidal of the University of Texas at Austin wrote the
Study Guide. Linda Schain of Hofstra University prepared Topic Tackler. Leland Mansuetti authored
the online quizzes.
I acknowledge the Institute of Management Accountants for permission to use problems from Certified
Management Accountant (CMA) examinations. I also acknowledge the American Institute of Certified
Public Accountants for permission to use problems from the Uniform CPA Examinations, Questions,
and Unofficial Answers. I am indebted to Professors Roland Minch, David Solomons and Michael
Maher for allowing the use of their case materials in the text. The source for the actual company
information in Chapters 1 and 2 regarding The Walt Disney Company, Caterpillar, Wal-Mart, and
Southwest Airlines was the companies published annual reports.
Finally, I wish to express my gratitude to the fine people at McGraw-Hill/Irwin who so professionally
guided this book through the publication process. In particular, I wish to acknowledge Steve
DeLancey, Stewart Mattson, Gail Korosa, Susanne Riedell, Elizabeth Mavetz, Rose Hepburn, Krista
Bettino, Adam Rooke, Lori Kramer, Ira Roberts and Matthew Perry.
Ronald W. Hilton
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Contents in Brief
Contents
xxvi Contents
Problems
Case
Contents xxvii
Choosing the Cost Driver for Overhead Application Other Cost Drivers for Overhead Application
Limitation of Direct Labor as a Cost Driver Subsequent Production Departments
Departmental Overhead Rates Hybrid Product-Costing Systems
M.A.P. Are Layoffs a Good Way to Cut Costs During Operation Costing for Batch Manufacturing
an Economic Downturn? Processes
Two-Stage Cost Allocation Chapter Summary
Project Costing: Job-Order Costing in Nonmanufacturing Key Terms
Organizations Appendix to Chapter 4: Process Costing in Sequential
Changing Technology in Manufacturing Operations Production Departments
Electronic Data Interchange Review Questions
M.A.P. Online Purchasing Exercises
Use of Bar Codes Problems
Focus on Ethics: Did Boeing Exploit Accounting Rules to Cases
Conceal Cost Overruns and Production Snafus?
Chapter Summary Part II
Key Terms Cost Management Systems,
Appendix to Chapter 3: Activity-Based Costing: Activity-Based Costing, and Activity-Based
An Introduction
Management
Review Questions
Exercises
Problems
Cases
5 Activity-Based Costing
Traditional, Volume-Based Product-Costing System
Trouble in Denver
Activity-Based Costing System
4 Process Costing and Hybrid Product- ABC Stage One
Costing Systems ABC Stage Two
Comparison of Job-Order Costing and Process Interpreting the ABC Product Costs
Costing
The Punch Line
Flow of Costs
Why Traditional, Volume-Based Systems
Differences Between Job-Order and Process Distort Product Costs
Costing
M.A.P. Cost Distortion at Rockwell
Equivalent Units: A Key Concept International
Equivalent Units M.A.P. Cost Distortion at DHL
Illustration of Process Costing Activity-Based Costing: Some Key Issues
Basic Data for Illustration Cost Drivers
M.A.P. New York Wine Industry M.A.P. Activity Cost Drivers in the Health Care
Weighted-Average Method of Process Costing Industry
Other Issues in Process Costing Collecting ABC Data
Actual versus Normal Costing Activity Dictionary and Bill of Activities
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xxviii Contents
Contents xxix
xxx Contents
Contents xxxi
12 Responsibility-Accounting, Quality
Control, and Environmental Cost
11 Flexible Budgeting and the Management
Management of Overhead and Responsibility Centers
Support Activity Costs Illustration of Responsibility Accounting
Overhead Budgets Performance Reports
Flexible Budgets Budgets, Variance Analysis, and
Advantages of Flexible Budgets Responsibility Accounting
The Activity Measure Cost Allocation
Flexible Overhead Budget Illustrated Cost Allocation Bases
Overhead Application in a Standard-Costing Allocation Bases Based on Budgets
System Activity-Based Responsibility Accounting
Choice of Activity Measure Behavioral Effects of Responsibility
Criteria for Choosing the Activity Measure Accounting
Changing Manufacturing Technology: Information versus Blame
Computer-Integrated Manufacturing Controllability
Cost Drivers Motivating Desired Behavior
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xxxii Contents
Part IV
13 Investment Centers and Transfer Using Accounting Information in
Pricing Decision Making
Delegation of Decision Making
Obtaining Goal Congruence:
A Behavioral Challenge
Adaptation of Management Control Systems
Measuring Performance in Investment Centers
Return on Investment
Residual Income
Economic Value Added
M.A.P. Pay for Performance Based on EVA 14 Decision Making: Relevant Costs and
Measuring Income and Invested Capital Benefits
Invested Capital The Managerial Accountants Role in Decision Making
Measuring Investment-Center Income Steps in the Decision-Making Process
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Contents xxxiii
xxxiv Contents
Contents xxxv
Chapter Summary
Key Terms
Appendix to Chapter 18:
Reciprocal-Services Method
Review Questions
Exercises
Problems
18 Allocation of Support Activity Costs and Cases
Joint Costs
Section 1: Service Department Cost Allocation
Appendix I: The Sarbanes-Oxley Act,
Direct Method Internal Controls, and Management
Step-Down Method Accounting
Reciprocal-Services Method Appendix II: Compound Interest and the
Fixed versus Variable Costs Concept of Present Value
Dual Cost Allocation
M.A.P. Cost Management in the Health Care
Appendix III: Inventory Management
Industry References for In Their Own Words
Allocate Budgeted Costs
Todays Advanced Manufacturing Environment
Glossary
The Rise of Activity-Based Costing Photo Credits
Section 2: Joint Product Cost Allocation
Index of Companies and
Allocating Joint Costs
Organizations
M.A.P. Joint Cost Allocation in the Petroleum
Industry Index of Subjects
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MANAGERIAL
ACCOUNTING