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CITATION

Berry, Leonard Eugene. Management Accounting Demystified. US: McGraw-Hill, 2005.

Management Accounting Demystified

Authors: Leonard Eugene Berry

Published:  November 2005

eISBN: 9780071487887 0071487883 | ISBN: 9780071459617
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  • Contents
  • Introduction
  • Chapter 1 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
  • Chapter 2 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
  • Chapter 3 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
  • Chapter 4 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
  • Chapter 5 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
  • Chapter 6 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
  • Chapter 7 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
  • Chapter 8 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
  • Appendix: 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
  • Chapter 9 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
  • Chapter 10 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
  • Chapter 11 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
  • Chapter 12 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
  • Chapter 13 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
  • Chapter 14 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
  • A
  • B
  • C
  • D
  • E
  • F
  • G
  • H
  • I
  • J
  • K
  • L
  • M
  • N
  • O
  • P
  • R
  • S
  • T
  • U
  • V
  • W
  • Index