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Management Accounting Demystified

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ISBN-10: 0071459618

ISBN-13: 9780071459617

Edition: 2006

Authors: Leonard Eugene Berry

List price: $30.00
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Description:

Leonard Berry presents the key aspects of management accounting as applied to both for-profit and nonprofit companies. He covers subjects such as cost accounting, how to develop and use information for costing products and services, decision making, operational budgeting and performance evaluations.
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Book details

List price: $30.00
Copyright year: 2006
Publisher: McGraw-Hill Education
Publication date: 12/14/2005
Binding: Paperback
Pages: 352
Size: 7.50" wide x 9.25" long x 0.75" tall
Weight: 1.496
Language: English

Author Profile Leonard Eugene Berry, Ph.D., C.I.A. is Professor Emeritus and Director Emeritus in the School of Accountancy at Georgia State University. He is a retired C.P.A. as well as the author of Management Accounting DeMYSTiFieD (2005).

Introduction
What Is Management Accounting?
Information for Decision Making
Strategic Analysis Information
Planning Information
Organizing and Directing Information
Performance Evaluation Information
The Key Accounting and Finance Players in a Large Business
Changing Roles of the Controller and Management Accountant
The Profession of Accounting
Management Accounting Compared to Financial Accounting
Summary
Basic Cost Terms and Concepts
Cost as an Asset or Expense
Costs That Become Assets
Costs That Become Expenses
Identification of Costs and Expenses in Three Types of Businesses
Tracing Costs to Cost Objects
Cost Objects
Direct Costs
Indirect Costs
Costs Based on Cost Behavior
Total Variable Costs
Relevant Range
Total Fixed Costs
Mixed Variable Costs
Stepped Fixed Costs
Unit vs. Total Costs
Cost Definitions for Decision Making
Summary of Cost Definitions
Cost Flows in a Manufacturing Business
Preparation of Financial Statements
The Balance Sheet
The Income Statement
Summary
Practice Problems
Solutions to Practice Problems
Job Order Cost Systems
Factors in Designing a Cost System
Job Order Cost System
The Accounting Components of a Job Order Costing System
Source Documents Used in the System
The General Ledger and Subsidiary Ledgers
The Major Steps in Designing a Job Order Cost System
Disposition of Overallocated or Underallocated Overhead
Summary
Practice Problems
Solutions to Practice Problems
Cost Allocation Systems
Why Allocate Indirect Costs?
Nature of Cost Allocation
Issues to Address in Cost Allocation
An Overview of Cost Flows in a Manufacturing Cost Allocation System
Methods of Allocating Support Department Costs
Direct Method
Step-Down Method
Other Methods for Allocating Support Department Overhead
Summary
Practice Problems
Solutions to Practice Problems
Process Cost Systems
Process Costing and Job Order Costing Compared
A Description of Process Costing
Concept of Equivalent Units
An Overview of the Major Steps in a Process Cost System
A Visual Look at Computing Unit Costs Under the Weighted Average Method and the FIFO Method
Weighted Average Method
FIFO Method
Assigning Costs Using the Weighted Average Method
Assigning Costs Using the FIFO Method
Costs Transferred in from Other Departments
Transferred-In Costs Using the Weighted Average Method
Transferred-In Costs Using the FIFO Method
Summary
Practice Problems
Solutions to Practice Problems
Activity-Based Management Systems
Activity-Based Management Systems
ABC as a Management System
ABC in Product Costing
An Overview of the Flow of Costs in an ABM System
Summary
Practice Problems
Solutions to Practice Problems
Costs for Decision Making: Cost Estimation and Cost-Volume-Profit Analysis
Why Cost Behavior and Cost Estimation Is So Important
Review of Cost Behavioral Terms
The Basic Linear Cost Function
Assumptions Underlying the Linear Cost Model
Methods for Estimating Variable and Fixed Costs
The Account Analysis Method
Industrial Engineering Method
Scatter Diagram Method
The High-Low Method
Regression Analysis
Putting It All Together-The Steps in Developing a Cost Estimation or Prediction Formula
Cost-Volume-Profit Analysis (CVP) and Its Uses
The CVP Model
Total Costs vs. Unit Costs
Contribution Margin Approach in CVP Analysis
The Formula Approach in CVP Analysis
Shortcut Approaches to CVP Analysis
CVP Analysis and the Multiproduct Firm
Summary
Practice Problems
Solutions to Practice Problems
Costs for Decision Making: Relevant Costing and Capital Expenditure Analysis
Decision Making Model
Important Accounting Concepts for Decision Making
Hazards in Using Relevant Costing
Problem: Should a Product, Service, or Business Segment Be Dropped?
Problem: How to Make Capital Investment Decisions
The Payback Method of Evaluating Capital Investment Projects
The Discounted Cash Flow (DCF) Method of Evaluating Capital Investment Projects
Problem: Should a Product or Service Be Produced Internally or Outsourced?
Problem: Which Product Mix Provides the Greater Profitability?
Summary
Computing Present Value of a Lump Sum of Money
The Present Value of Money
Computing the Present Value of Money
Practice Problems
Solutions to Practice Problems
Costs for Decision Making: Setting Prices
Economics of Pricing
Short-Term Pricing Decisions
Long-Term Pricing Decisions
Cost-Plus Pricing
Contribution Margin Approach to Pricing
Target Costing
The Basic Concepts of Target Costing
Steps in Computing the Target Cost
Summary
Practice Problems
Solutions to Practice Problems
Profit Planning Using Master Budgets
Purposes and Benefits of Profit Planning
The Behavioral Aspects of Profit Planning and Budgeting
Budgeting Obstacles
The Master Budget Framework
Steps in Preparing the Master Budget
Budget Gap
Activity-Based Budgeting
Summary
Practice Problems
Solutions to Practice Problems
Planning and Performance Evaluation: Using Flexible Budgets
Flexible Budgets for Planning
Flexible Budgets for Activities and Planning of Overhead Costs
General Model for Evaluating Financial Performance
Flexible Budgets for Control
Flexible Budgeting in Action
Illustration of Flexible Budget for Control at the Senior Management Level
Determining the Cause of Flexible Budget Variances
Activity-Based Flexible Budgeting and Variance Analysis
Summary
Practice Problems
Solutions to Practice Problems
Performance Evaluation: Standard Costing and Variances Analysis
What Is a Standard?
Ideal Standards
Practical Standards
Advantages of Standard Costing
Criticisms of Standard Costing
Standard Costing in Performance Evaluation
Who Is Responsible for Setting Standards?
Purchasing
Industrial Engineering
Human Resources
Management Accountant
Using Standard Costing in Material and Labor Cost Variance Analysis
Causes of Direct Material and Direct Labor Variances
Variable Manufacturing Overhead Variances
Explanation and Causes of Variable Manufacturing Overhead Variances
Fixed Manufacturing Overhead Variances
Explanation and Causes of Fixed Manufacturing Overhead Variances
Different Approaches for Analyzing Manufacturing
Cost Variances in the General Ledger
Disposition of Cost Variances
Summary
Practice Problems
Solutions to Practice Problems
Performance Evaluation: Sales Variances and the Balanced Scorecard
Sales Variances
Total Sales Budget Variance
Sales Price Variance
Sales Volume Variance
Sales Mix Variance
Sales Quantity Variance
Sales Market Share Variance
Sales Market Size Variance
Evaluating the Success of a Strategic Initiative
Balancing Financial and Nonfinancial Success Factors
Some Guidelines for Adopting the Balanced Scorecard
Measuring the Key Success Areas
Vision and Strategy
Learning and Innovation
Learning and Innovation Measures of Performance
Internal Business Processes
Internal Business Process Performance Measures
Customer Focus
Customer Performance Measures
Financial Performance
Financial Performance Measures
Six Sigma and the Balanced Scorecard
Six Sigma in Action
Performance Dashboard
Benchmarking
Summary
Practice Problems
Solutions to Practice Problems
Performance Evaluation in Decentralized Companies
Nature of Decentralization
Advantages of Decentralization
Disadvantages of Decentralization
Responsibility Accounting System
The Issue of Controllability
Managerial Evaluation Compared to Segment Evaluation
Responsibility Centers
Measuring Investment Center (Divisional) Performance
Return on Investment (ROI)
Residual Income (RI)
Economic Value Added (EVA)
Measuring Income and the Investment Base
How Is Income Measured?
What Is Included in the Investment Base?
How Is the Investment Base Valued?
Activity-Based Costing and Responsibility Accounting
Transfer Pricing
Transfer Pricing When There Is No External Market
Transfer Pricing When There Is an External Market
Transfer Pricing When the Producing Division Has Excess Capacity
Transfer Pricing When the Producing Division Can Use Idle Facilities for Other Purposes
Transfer Pricing When Producing Division Has No Excess Capacity
Transfer Pricing in a Multinational Environment
A Synthesis of Performance Evaluation Methodologies
Summary
Practice Problems
Solutions to Practice Problems
Final Exam
Glossary
Index