neifa John J. Wild Ken W. Shaw McGraw-Hill Irwin edition University of Wisconsin at Madison University of Missouri at Columbia

Transcription

1 neifa edition John J. Wild University of Wisconsin at Madison Ken W. Shaw University of Missouri at Columbia McGraw-Hill Irwin

2 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 11 Cost Concepts for Service Companies 11 Reporting Manufacturing Activities 12 Manufacturer's Balance Sheet 12 Manufacturer's Income Statement 13 Flow of Manufacturing Activities 16 Manufacturing Statement 17 Trends in Managerial Accounting 19 Decision Analysis Cycle Time and Cycle Efficiency 20 L Job Order Costing and Analysis 46 Job Order Cost Accounting 48 Cost Accounting System 48 Job Order Production 48 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 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 Decision Analysis Pricing for Services 61 J 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 Cbst of Goods Sold 99 Trends in Process Operations 101 Decision Analysis Hybrid Costing System 101 Appendix 3 A FIFO Method of Process Costing 105 xxi

3 xxii Contents 4 Activity-Based Costing and Analysis 128 Assigning Overhead Costs 130 Plantwide Overhead Rate Method 131 Departmental Overhead Rate Method 132 Activity-Based Costing Rates and Method 135 Applying Activity-Based Costing 136 Step 1: Identify Activities and the Costs They Cause 136 Step 2: Trace Overhead Costs to Cost Pools 137 Step 3: Determine Activity Rates 138 Step 4: r Assign Overhead Costs to Cost Objects 139 Assessing Activity-Based Costing 141 Advantages of Activity-Based Costing 141 Disadvantages of Activity-Based Costing 142 Type of Activities 142 Decision Analysis Customer Profitability 143 u Cost Behavior and Cost- Volume-Profit Analysis 168 Identifying Cost Behavior 170 Fixed Costs 170 Variable Costs 171 Mixed Costs 171 Step-Wise Costs 172 Curvilinear Costs 172 Measuring Cost Behavior 173 Scatter Diagrams 173 High-Low Method 174 Least-Squares Regression 175 Comparison of Cost Estimation Methods 175 Using Break-Even Analysis 176 Contribution Margin and Its Measures 176 Computing the Break-Even Point 177 Preparing a Cost-Volume-Profit Chart 178 Making Assumptions in Cost-Volume-Profit Analysis 179 Applying Cost-Volume-Profit Analysis 180 Computing Income from Sales and Costs 173 Computing Sales for a Target Income 181 Computing the Margin of Safety 182 Using Sensitivity Analysis 183 Computing a Multiproduct Break-Even Point 183 Decision Analysis Degree of Operating Leverage 186 Appendix 5A Using Excel to Estimate Least-Squares Regression 188 D Variable Costing and Performance Reporting 206 Introducing Variable Costing and Absorption Costing 208 Computing Unit Cost 209 Performance Reporting (Income) Implications 210 Units Produced Equal Units Sold 210 Units Produced Exceed Units Sold 212 Units Produced Are Less Than Units Sold 213 Summarizing Income Reporting 214 Converting Income under Variable Costing to \ Absorption Costing 215 Comparing Variable Costing and Absorption Costing 215 Planning Production 215 Setting Prices 217 Controlling Costs 218 Limitations of Reports Using Variable Costing 219 Variable Costing for Service Firms 219 Decision Analysis Break-Even Analysis Master Budgets and Performance Planning 238 Budget Process 240 Strategic Budgeting 240 Benchmarking Budgets 240 Budgeting and Human Behavior 241 Budgeting as a Management Tool 241 Budgeting Communication 241 Budget Administration 242 Budget Committee 242 Budget Reporting 242 Budget Timing 243 Master Budget 244 Master Budget Components 244 Operating Budgets 246 Capital Expenditures Budget 250 Financial Budgets 250 Decision Analysis Activity-Based Budgeting 254 Appendix 7A Production and Manufacturing Budgets 260

4 Contents xxiii 0 Flexible Budgets and Standard Costing 282 SECTION 1 FLEXIBLE BUDGETS 284 Budgetary Process 284 Budgetary Control and Reporting 284 Fixed Budget Performance Report 285 Budget Reports for Evaluation 286 Flexible Budget Reports 286 Purpose of Flexible Budgets 286 Preparation of Flexible Budgets 286 Flexible Budget Performance Report 288 SECTION 2 STANDARD COSTS 289 Materials and Labor Standards 290 Identifying Standard Costs 290 Setting Standard Costs 290 Cost Variances 291 Cost Variance Analysis 291 Cost Variance Computation 291 Computing Materials and Labor Variances 292 Overhead Standards and Variances 295 Setting Overhead Standards 295 / Total Overhead Cost Variance 296 Decision Analysis Sales Variances 299 Appendix 8A Expanded Overhead Variances and Standard Cost Accounting System 304 Investment Centers 339 Financial Performance Evaluation Measures 339 Nonfinancial Performance Evaluation Measures 340 Balanced Scorecard 340 Responsibility Accounting 341 Controllable versus Direct Costs 341 Responsibility Accounting System 342 Summary of Cost Allocation 343 Decision Analysis Investment Center Profit Margin and Investment Turnover 344 Appendix 9A Transfer Pricing 348 Appendix 9B Joint Costs and Their Allocation 349 IU Relevant Costing for Managerial Decisions 370 Decisions and Information 372 Decision Making 372 Relevant Costs 373 Managerial Decision Scenarios 373 Additional Business 373 Make or Buy 375 Scrap or Rework 376 Sell or Process 377 Sales Mix Selection 378 Segment Elimination 378 Keep or Replace Equipment 380 Qualitative Decision Factors 380 Decision Analysis Setting Product Price Decentralization and Performance Evaluation 328 Departmental Accounting 330 Motivation for Departmentalization 330 Departmental Evaluation 330 Departmental Expense Allocation 331 Direct and Indirect Expenses 331 Allocation of Indirect Expenses 332 Departmental Income Statements 333 Departmental Contribution to Overhead Capital Budgeting and Investment Analysis 400 Introduction to Capital Budgeting 402 Methods Not Using Time Value of Money 402 Payback Period 403 Accounting Rate of Return 405

5 xxiv Contents Methods Using Time Value of Money 406 Net Present Value 407 Internal Rate of Return 409 Comparison of Capital Budgeting Methods 411 Decision Analysis Break-Even Time 412 Appendix 11A Using Excel to Compute Net Present Value and Internal Rate of Return 415 \L Reporting and Analyzing Cash Flows 430 Basics of Cash Flow Reporting 432 Purpose of the Statement of Cash Flows 432 Importance of Cash Flows 432 Measurement of Cash Flows 433 Classification of Cash Flows 433 Noncash Investing and Financing 435 Format of the Statement of Cash Flows 435 Preparing the Statement of Cash Flows 436 Cash Flows from Operating 438 Indirect and Direct Methods of Reporting 438 Application of the Indirect Method of Reporting 439 Summary of Adjustments for Indirect Method 444 Cash Flows from Investing 445 Three-Stage Process of Analysis 445 Analysis of Noncurrent Assets 445 Analysis of Other Assets 446 Cash Flows from Financing 447 Three-Stage Process of Analysis 447 Analysis of Noncurrent Liabilities 447 Analysis of Equity 448 Proving Cash Balances 449 Decision Analysis Cash Flow Analysis 450 Appendix 12A Spreadsheet Preparation of the Statement of Cash Flows 454 Appendix 12B Direct Method of Reporting Operating Cash Flows 457 I j Analyzing and Interpreting Financial Statements 484 Basics of Analysis 486 Purpose of Analysis 486 Building Blocks of Analysis 487 Information for Analysis 487 Standards for Comparisons 488 Tools of Analysis 488 Horizontal Analysis 488 Comparative Statements 488 Trend Analysis 491 Vertical Analysis 493 Common-Size Statements 493 Common-Size Graphics 495 Ratio Analysis 496 Liquidity and Efficiency 497 Solvency 501 Profitability 502 Market Prospects 503 Summary of Ratios 504 Decision Analysis Analysis Reporting 506 Appendix 13A Sustainable Income 510 Appendix A Financial Statement Information A-l Research In Motion A-2 Apple A-19 Palm A-24 Nokia A-29 Appendix B Time Value of Money B Appendix C* Basic Accounting for Transactions Appendix D* Accounting for Partnerships Glossary G Credits CR Index IIMD-1 Chart of Accounts CA * Appendixes C & D are available on the book's Website, mhhe.com/wildma3e, and as print copy from a McGraw-Hill representative.