Management Accounting:Information for Decision-Making and Strategy Execution

Name: Management Accounting:Information for Decision-Making and Strategy Execution | International Edition
Brand: Pearson Education Limited
Price: 61.09 EUR
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International Edition

Anthony A. Atkinson Robert S. Kaplan Ella Mae Matsumura S. Mark Young(Author)

Pearson Education Limited (Publisher)

1st Edition

Published on 6. November 2013

552 pages

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978-1-4479-3056-3 (ISBN)

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Content

Cover
Contents
Preface
Acknowledgments
About the Authors
CHAPTER 1 How Management Accounting Information Supports Decision Making
What Is Management Accounting?
Management Accounting and Financial Accounting
A Brief History of Management Accounting
IN PRACTICE: Definition of Management Accounting (2008), Issued by the Institute of Management Accountants
Strategy
The Plan-Do-Check-Act (PDCA) Cycle
IN PRACTICE: Company Mission Statements
Behavioral Implications of Management Accounting Information
Summary
Key Terms
Assignment Materials
CHAPTER 2 The Balanced Scorecard and Strategy Map
The Balanced Scorecard
Strategy
IN PRACTICE: Infosys Develops a Balanced Scorecard to Describe and Implement Its Strategy
Balanced Scorecard Objectives, Measures, and Targets
Creating a Strategy Map
Financial Perspective
Customer Perspective
Process Perspective
Learning and Growth Perspective
Strategy Map and Balanced Scorecard at Pioneer Petroleum
Financial Perspective
Customer Perspective
Process Perspective
Learning and Growth Perspective
Applying the Balanced Scorecard to Nonprofit and Government Organizations
IN PRACTICE: A Balanced Scorecard for a Nonprofit Organization
Managing with the Balanced Scorecard
Barriers to Effective Use of the Balanced Scorecard
Epilogue to Pioneer Petroleum
Summary
Key Terms
Assignment Materials
CHAPTER 3 Using Costs in Decision Making
How Management Accounting Supports Internal Decision Making
Pricing
Product Planning
Budgeting
Performance Evaluation
Contracting
Variable and Fixed Costs
Variable Costs
Fixed Costs
Cost-Volume-Profit Analysis
Developing and Using the CVP Equation
IN PRACTICE: Introducing Uncertainty into Cost Volume Profit Analysis
Variations on the Theme
IN PRACTICE: Breakeven on a Development Project
Financial Modeling and What-If Analysis
IN PRACTICE: Cost-Volume-Profit Analysis
The Multiproduct Firm
IN PRACTICE: Estimating the Effect of Unit Sales on Share Price
The Assumptions Underlying CVP Analysis
Other Useful Cost Definitions
Mixed Costs
Step Variable Costs
Incremental Costs
Sunk Costs
IN PRACTICE: Sunk Costs
IN PRACTICE: Overcoming the Sunk Cost Effect
IN PRACTICE: Human Behavior and Sunk Costs
Relevant Cost
Opportunity Cost
Avoidable Cost
Make-or-Buy-The Outsourcing Decision
IN PRACTICE: Contracting Out
Manufacturing Costs
The Decision to Drop a Product
IN PRACTICE: Be Wary When Labeling Departments Losers
Costing Orders
Costing Orders and Opportunity Cost Considerations
Relevant Cost and Short-Term Product Mix Decisions
Multiple Resource Constraints
IN PRACTICE: Choosing the Least Cost Materials Mix
Building the Linear Program
The Graphical Approach to Solving Linear Programs
Epilogue to Nolan Industries
IN PRACTICE: Excel's Goal Seek and Solver
Summary
Key Terms
Assignment Materials
CHAPTER 4 Accumulating and Assigning Costs to Products
IN PRACTICE: On the Importance of Understanding Costs in the Restaurant Business
Cost Management Systems
Cost Flows in Organizations
Manufacturing Organizations
Retail Organizations
Service Organizations
Some Important Cost Terms
Cost Object
Consumable Resources
Capacity-Related Resources
Direct and Indirect Costs
IN PRACTICE: Cost Objects
IN PRACTICE: Indirect Costs
Cost Classification and Context
Going Forward
Handling Indirect Costs in a Manufacturing Environment
Multiple Indirect Cost Pools
Cost Pool Homogeneity
Overhead Allocation: Further Issues
Using Planned Capacity Cost
IN PRACTICE: Why Costing Matters
Reconciling Actual and Applied Capacity Costs
Estimating Practical Capacity
Job Order and Process Systems
Job Order Costing
Process Costing
Some Process Costing Wrinkles
Final Comments on Process Costing
Epilogue to Strict's Custom Framing
Summary
Appendix 4-1 Allocating Service Department Costs
Key Terms
Assignment Materials
CHAPTER 5 Activity-Based Cost Systems
Traditional Manufacturing Costing Systems
Limitations of Madison's Existing Standard Cost System
Vanilla Factory and Multiflavor Factory
Activity-Based Costing
Calculating Resource Capacity Cost Rates
Calculating Resource Time Usage per Product
Calculating Product Cost and Profitability
Possible Actions as a Result of the More Accurate Costing
IN PRACTICE: Using Activity-Based Costing to Increase Bank Profitability
Measuring the Cost of Unused Resource Capacity
Fixed Costs and Variable Costs in Activity-Based Cost Systems
Using the ABC Model to Forecast Resource Capacity
Updating the ABC Model
IN PRACTICE: W.S. Industries Uses ABC Information for Continuous Improvement
Service Companies
Capacity Cost Rate
Calculating the Time Equation for the Consumption of Broker's Capacity
Implementation Issues
Lack of Clear Business Purpose
Lack of Senior Management Commitment
Delegating the Project to Consultants
Poor ABC Model Design
Individual and Organizational Resistance to Change
People Feel Threatened
Epilogue to Madison Dairy
Summary
Appendix 5-1 Historical Origins of Activity-Based Costing
Key Terms
Assignment Materials
CHAPTER 6 Measuring and Managing Customer Relationships
Measuring Customer Profitability: Extending the Madison Dairy Case
Reporting and Displaying Customer Profitability
IN PRACTICE: Building a Whale Curve of Customer Profitability
Customer Costs in Service Companies
Increasing Customer Profitability
Process Improvements
Activity-Based Pricing
Managing Relationships
The Pricing Waterfall
Salesperson Incentives
Life-Cycle Profitability
Measuring Customer Performance with Nonfinancial Metrics
Customer Satisfaction
Customer Loyalty
The Net Promoter Score
Epilogue to Madison Dairy
Summary
Key Terms
Assignment Materials
CHAPTER 7 Measuring and Managing Process Performance
Process Perspective and the Balanced Scorecard
Facility Layout Systems
Process Layouts
Product Layouts
IN PRACTICE: Manufacturing a CD
Group Technology
Inventory Costs and Processing Time
Inventory and Processing Time
Inventory-Related Costs
Costs and Benefits of Changing to a New Layout: An Example Using Group Technology
Summary of Costs and Benefits
IN PRACTICE: History of Lean Manufacturing
Cost of Nonconformance and Quality Issues
Quality Standards
Costs of Quality Control
Just-in-Time Manufacturing
Implications of JIT Manufacturing
JIT Manufacturing and Management Accounting
IN PRACTICE: Using Lean Manufacturing in a Hospital Setting
Kaizen Costing
Comparing Traditional Cost Reduction to Kaizen Costing
Concerns about Kaizen Costing
Benchmarking
Stage 1: Internal Study and Preliminary Competitive Analyses
Stage 2: Developing Long-Term Commitment to the Benchmarking Project and Coalescing the Benchmarking Team
Stage 3: Identifying Benchmarking Partners
Stage 4: Information Gathering and Sharing Methods
Stage 5: Taking Action to Meet or Exceed the Benchmark
IN PRACTICE: Benchmarking Mobile Web Experiences
Epilogue to Blast from the Past Robot Company
Production Flows
Effects on Work-in-Process Inventory
Effect on Production Costs
Cost of Rework
Cost of Carrying Work-in-Process Inventory
Benefits from Increased Sales
Summary of Costs and Benefits
Summary
Key Terms
Assignment Materials
CHAPTER 8 Measuring and Managing Life-Cycle Costs
Managing Products over Their Life Cycle
Research, Development, and Engineering Stage
Manufacturing Stage
Postsale Service and Disposal Stage
Target Costing
A Target Costing Example
Concerns about Target Costing
IN PRACTICE: Target Costing and the Mercedes-Benz M-Class
Breakeven Time: A Comprehensive Metric for New Product Development
Innovation Measures on the Balanced Scorecard
Market Research and Generation of New Product Ideas
Design, Development, and Launch of New Products
IN PRACTICE: Life-Cycle Revenues: The Case of Motion Pictures
Environmental Costing
Controlling Environmental Costs
IN PRACTICE: The Cisco Take-Back and Recycle Program
IN PRACTICE: Scientific Progress and the Reduction of Environmental Costs: The Case of Chromium in Groundwater
Summary
Key Terms
Assignment Materials
CHAPTER 9 Behavioral and Organizational Issues in Management Accounting and Control Systems
What Are Management Accounting and Control Systems?
The Meaning of "Control"
Characteristics of a Well-Designed MACS
Technical Considerations
Behavioral Considerations
The Human Resource Management Model of Motivation
The Organization's Ethical Code of Conduct and MACS Design
Avoiding Ethical Dilemmas
Dealing with Ethical Conflicts
IN PRACTICE: Does Cheating at Golf Lead to Cheating in Business?
The Elements of an Effective Ethical Control System
Steps in Making an Ethical Decision
Motivation and Congruence
Task and Results Control Methods
IN PRACTICE: Monitoring in the Workplace
Using a Mix of Performance Measures: A Balanced Scorecard Approach
The Need for Multiple Measures of Performance: Non-Goal-Congruent Behavior
Dysfunctional Behavior
Using the Balanced Scorecard to Align Employees to Corporate Goals and Business Unit Objectives
Change Management
Empowering Employees to Be Involved in MACS Design
Participation in Decision Making
Education to Understand Information
Behavioral Aspects of MACS Design: An Example from Budgeting
Designing the Budget Process
Influencing the Budget Process
Developing Appropriate Incentive Systems to Reward Performance
Choosing between Intrinsic and Extrinsic Rewards
Extrinsic Rewards Based on Performance
Effective Performance Measurement and Reward Systems
Conditions Favoring Incentive Compensation
Incentive Compensation and Employee Responsibility
Rewarding Outcomes
Managing Incentive Compensation Plans
Types of Incentive Compensation Plans
IN PRACTICE: UNIBANCO-Tying the Balanced Scorecard to Compensation
Epilogue to Advanced Cellular International and Chapter Summary
Key Terms
Assignment Materials
CHAPTER 10 Using Budgets for Planning and Coordination
Determining the Levels of Capacity-Related and Flexible Resources
The Budgeting Process
The Role of Budgets and Budgeting
The Elements of Budgeting
Behavioral Considerations in Budgeting
Budget Components
Operating Budgets
Financial Budgets
The Budgeting Process Illustrated
Oxford Tole Art, Buoy Division
Demand Forecast
The Production Plan
Developing the Spending Plans
Choosing the Capacity Levels
Handling Infeasible Production Plans
Interpreting the Production Plan
The Financial Plans
Understanding the Cash Flow Statement
Using the Financial Plans
Using the Projected Results
What-If Analysis
Evaluating Decision-Making Alternatives
Sensitivity Analysis
Comparing Actual and Planned Results
Variance Analysis
Basic Variance Analysis
Canning Cellular Services
First-Level Variances
Decomposing the Variances
Planning and Flexible Budget Variances
Quantity and Price Variances for Material and Labor
Sales Variances
The Role of Budgeting in Service and Not-For-Profit Organizations
Periodic and Continuous Budgeting
Controlling Discretionary Expenditures
Incremental Budgeting
Zero-Based Budgeting
Project Funding
Managing the Budgeting Process
Criticisms of the Traditional Budgeting Model and the "Beyond Budgeting" Approach
Epilogue to the California Budget Crisis
Summary
Key Terms
Assignment Materials
CHAPTER 11 Financial Control
The Environment of Financial Control
Financial Control
The Motivation for Decentralization
IN PRACTICE: Standard Operating Precedures at Mercedes-Benz USA
IN PRACTICE: Evaluating Performance at McDonald's Corporation Restaurants
Responsibility Centers and Evaluating Unit Performance
Coordinating Responsibility Centers
IN PRACTICE: The High Cost of Coordination
Responsibility Centers and Financial Control
IN PRACTICE: Nonfinancial Performance Measures at Federal Express: The Service Quality Indicator
Responsibility Center Types
IN PRACTICE: Investment Centers at General Electric in 2010
Evaluating Responsibility Centers
IN PRACTICE: Financial Statement Business Segment Reporting
Transfer Pricing
Approaches to Transfer Pricing
IN PRACTICE: International Transfer Pricing
Transfer Prices Based on Equity Considerations
Assigning and Valuing Assets in Investment Centers
The Efficiency and Productivity Elements of Return on Investment
Assessing Productivity Using Financial Control
Questioning the Return on Investment Approach
IN PRACTICE: Labor Productivity in a Consultancy
IN PRACTICE: Managing Productivity in Airlines
Using Residual Income
IN PRACTICE: Organization Adopt Economic Value Added for Different Reasons
The Efficacy of Financial Control
Epilogue to Adrian's Home Services
Summary
Key Terms
Assignment Materials
Glossary
Subject Index
Name and Company Index

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Management Accounting:Information for Decision-Making and Strategy Execution

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