John J.Wild. University of Wisconsin at Madison. Ken W. Shaw. University of Missouri at Columbia

Transcription

1 John J.Wild University of Wisconsin at Madison Ken W. Shaw University of Missouri at Columbia S LT-"" 1

2 c Preface in 1 Managerial Accounting Concepts and Principles 2 Managerial Accounting Basics 4 Purpose of Managerial Accounting 4 Nature of Managerial Accounting 5 Managerial Decision Making 7 Fraud and Ethics in Managerial Accounting 7 Managerial Cost Concepts 8 Types of Cost Classifications 8 Identification of Cost Classifications II Cost Concepts for Service Companies II Reporting Manufacturing Activities 12 Manufacturer's Costs 12 Manufacturer's Balance Sheet 13 Manufacturer's Income Statement 14 Flow of Manufacturing Activities 16 Manufacturing Statement 17 Trends in Managerial Accounting 19 Global View 21 Decision Analysis Raw Materials Inventory Turnover and Days'Sales ol Raw Materials Inventory 22 2 Job Order Costing and Analysis 46 Job Order Cost Accounting 48 Cost Accounting System 48 Job Order Production 48 Job Order Costing of Services 49 Events in Job Order Costing 49 Job Cost Sheet 50 Job Order Cost Flows and Reports 52 Materials Cost Flows and Documents 52 Labor Cost Flows and Documents 54 t 3 Overhead Cost Flows and Documents 55 Summary of Cost Flows 57 Adjusting Factory Overhead 59 Factory Overhead T-Account 59 Underapplied or Overapplied Overhead 60 Global View 60 Decision Analysis Pricinu for Services 61 Process Costing and Analysis 84 Process Operations 86 Comparing Job Order and Process Operations 87 Organization of Process Operations 87 GenX Company An Illustration 87 Process Cost Accounting 89 Comparing Job Order and Process Cost Accounting Systems 89 Direct and Indirect Costs 89 Accounting for Materials Costs 90 Accounting for Labor Costs 91 Accounting for Factory Overhead 91 Equivalent Units of Production 93 Accounting for Goods in Process 93 Differences in Equivalent Units for Materials, Labor, and Overhead 93 Process Costing Illustration 94 Step 1: Determine the Physical Flow of Units 95 Step 2: Compute Equivalent Units of Production 95 Step 3: Compute the Cost per Equivalent Unit 96 Step 4: Assign and Reconcile Costs 96 Transfers to Finished Goods Inventory and Cost of Goods Sold 99 Trends in Process Operations 101 Global View 101 Decision Analysis Hybrid Costing System 101 Appendix 3A FIFO Method of Process Costing 103 xxvi

3 xxvii Activity-Based Costing and Analysis 130 Assigning Overhead Costs 132 Plantwide Overhead Rate Method 133 Departmental Overhead Rate Method 134 Activity-Based Costing Rates and Method 137 Applying Activity-Based Costing 138 Step 1: Identify Activities and the Costs They Cause 138 Step 2: Trace Overhead Costs to Cost Pools 139 Step 3: Determine Activity Rates 140 Step 4: Assign Overhead Costs to Cost Objects 140 Assessing Activity-Based Costing 142 Advantages of Activity-Based Costing 142 Disadvantages of Activity-Based Costing 144 ABC for Service Providers 144 Types of Activities 144 Glnb.il View 146 Division Analysis Customer Profitability 146 Cost Behavior and Cost-Volume- Profit Analysis 170 Identifying Cost Behavior 172 Fixed Costs 172 Variable Costs 174 Mixed Costs 174 Step-Wise Costs 174 Curvilinear Costs 175 Measuring Cost Behavior 175 Scatter Diagrams 176 High-Low Method 176 Least-Squares Regression 177 Comparison of Cost Estimation Methods 178 Using Break-Even Analysis 178 Contribution Margin and Its Measures 178 Computing the Break-Even Point 179 Computing the Margin of Safety 180 Preparing a Cost-Volume-Profit Chart 181 Making Assumptions in Cost-Volume-Profit Analysis 182 Applying Cost-Volume-Profit Analysis 183 Computing Income from Sales and Costs 183 Computing Sales for a Target Income Using Sensitivity Analysis 186 Computing a Multiproduct Break-Even Point 187 Global View 189 Decision Analysis Degree of Operating Leverage 189 Appendix 5A Using Excel to Estimate Least-Squares Regression 191 Variable Costing and Performance Reporting 208 Introducing Variable Costing and Absorption Costing 210 Computing Unit Cost 211 Performance Reporting (Income) Implications 212 Units Produced Equal Units Sold 212 Units Produced Exceed Units Sold 214 Units Produced Are Less Than Units Sold 215 Summarizing Income Reporting 216 Converting Income under Variable Costing to Absorption Costing 217 Comparing Variable Costing and Absorption Costing 217 Planning Production 217 Setting Prices 219 Controlling Costs 220 Limitations of Reports Using Variable Costing 220 Variable Costing for Service Firms 221 Global View 221 Decision Analysis Break-Lven Analysis Master Budgets and Performance Planning 240 Budget Process 242 Strategic Budgeting 242 Benchmarking Budgets 242 Budgeting and Human Behavior 243 Budgeting as a Management Tool 243 Budgeting Communication 243 Budget Administration 244 Budget Committee 244 Budget Reporting 244 Budget Timing 245

4 Master Budget 246 Master Budget Components 246 Operating Budgets 248 Capital Expenditures Budget 252 Financial Budgets 252 Global View 2.v> Decision Anaksi. : K i.\cd Budgeting Appendix 7 \l'n : Uanidacuniug Budgets 2 v; Flexible Budgets and Standard Costing 288 SECTION 1 FLEXIBLE BUDGETS 290 Budgetary Process 290 Budgetary Control and Reporting 290 Fixed Budget Performance Report 291 Budget Reports for Evaluation 292 Flexible Budget Reports 292 Purpose of Flexible Budgets 292 Preparation o f Flexible Budgets 292 Flexible Budget Performance Report 294 SECTION 2 STANDARD COSTS 295 Materials and Labor Standards 296 Identifying Standard Costs 296 Setting Standard Costs 296 Cost Variances 297 Cost Variance Analysis 297 Cost Variance Computation 297 Computing Materials and Labor Variances 298 Overhead Standards and Variances 301 Setting Overhead Standards 301 Predicting Activity Levels 302 Computing Overhead Cost Variances 302 Global V in -i; ; l )ecisim.. i. Suics Variance.-, 305 Appendix XA: Expanded Overhead \ arianccs and Standard l usi Accounting S Wem Performance Measurement and Responsibility Accounting 334 Responsibility Accounting 336 Motivation for Departmentalization 336 Departmental Evaluation 336 Controllable versus Uncontrollable Costs 337 Cost Centers 338 Responsibility Accounting System 338 Evaluating Cost Center Performance 338 Profit Center 339 Direct and Indirect Expenses 339 Allocation of Indirect Expenses 340 Departmental Income Statements 341 Departmental Contribution to Overhead 345 Evaluating Investment Center Performance 347 Financial Performance Evaluation Measures 347 Nonfinancial Performance Evaluation Measures 349 ' ' Innal \ icu / S I 't. i --m An.il;. (vele linie and C\cle l.ttickno ^ I Appendi X { '\ '11 an ilei Pricing 355 Appendix '/B.luim Coïts and Their Allocation Relevant Costing for Managerial Decisions 378 Decisions and Information 380 Decision Making 380 Relevant Costs 380 Managerial Decision Scenarios 381 Additional Business 381 Make or Buy 383 Scrap or Rework 384 Sell or Process 384 Sales Mix Selection 385 Segment Elimination 387 Keep or Replace Equipment 387 Qualitative Decision Factors 388 «Ík Décision Analysis Setting Product Price 38X

5 Capital Budgeting and Investment Analysis Analyzing and Interpreting Financial Statements 492 Introduction to Capital Budgeting 410 Methods Not Using Time Value of Money 410 Payback Period 410 Accounting Rate of Return 413 Methods Using Time Value of Money 414 Net Present Value 414 Internal Rate of Return 417 Comparison of Capital Budgeting Methods 419 ( i lohn I View 420 Decision Analysis Break-F-'veil Time 420 Appendix 11A Using Fxcel to Compute Net Present Willie and Internal Rate of Return Reporting and Analyzing Cash Flows 438 Basics of Cash Flow Reporting 440 Purpose of the Statement of Cash Flows 440 Importance of Cash Flows 440 Measurement of Cash Flows 441 Classification of Cash Flows 411 Noncash Investing and Financing 443 Format of the Statement of Cash Flows 443 Preparing the Statement of Cash Flows 444 Cash Flows from Operating 446 Indirect and Direct Methods of Reporting 446 Application of the Indirect Method of Reporting 447 Summary of Adjustments for Indirect Method 452 Cash Flows from Investing 453 Three-Stage Process of Analysis 453 Analysis of Noncurrent Assets 453 Analysis of Other Assets 454 Cash Flows from Financing 455 Three-Stage Process of Analysis 455 Analysis of Noncurrent Liabilities 455 Analysis of Equity 456 Proving Cash Balances 457 Global View 457 Decision Analysis Cash Flow Analysis 458 Appendix 12A Spreadsheet Preparation of the Statement of Cash Rows 462 Appendix 12B Direct Method of Reporting Operating Cash Flows 465 Basics of Analysis 494 Purpose of Analysis 494 Building Blocks of Analysis 494 Information for Analysis 495 Standards for Comparisons 495 Tools of Analysis 496 Horizontal Analysis 496 Comparative Statements 496 Trend Analysis 499 Vertical Analysis 501 Common-Size Statements 501 Common-Size Graphics 503 Ratio Analysis 504 Liquidity and Efficiency 505 Solvency 509 Profitability 510 Market Prospects 511 Summary of Ratios 512 Global View 514 Decision Analysis Anal)sis Reporting 514 Appendix I J A Sustainable Income 518 Appendix A Appendix B»Appendix C 'Appendix D Glossary G Credits CR Index IND-1 Chart of Accounts CA Financial Statement Information A-l Polaris A-2 Arctic Cat A-10 KTM A-14 Piaggio A-18 Time Value of Money B Basic Accounting for Transactions Accounting for Partnerships f Appendices C&D are available on the book's Website, mhhe.com/wiidma4e, and as print copy from a McGraw-Hill representative.