Cost management: a strategic emphasis
Gespeichert in:
| Format: | Buch |
|---|---|
| Sprache: | English |
| Veröffentlicht: |
Boston, Mass. [u.a.]
McGraw-Hill Irwin
2008
|
| Ausgabe: | 4. ed., internat. ed. |
| Schlagworte: | |
| Online-Zugang: | Inhaltsverzeichnis http://highered.mcgraw-hill.com/sites/0072818360/student_view0/ Inhaltsverzeichnis |
| Beschreibung: | XXIV, 902 S. Ill., graph. Darst. |
| ISBN: | 007110111X 9780071101110 |
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| 300 | |a XXIV, 902 S. |b Ill., graph. Darst. | ||
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| 650 | 4 | |a Contabilidad administrativa | |
| 650 | 4 | |a Contabilidad de costos | |
| 650 | 4 | |a Cost accounting | |
| 650 | 4 | |a Managerial accounting | |
| 650 | 4 | |a Cost accounting |v Problems, exercises, etc. | |
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Datensatz im Suchindex
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|---|---|
| adam_text | Brief Contents
PART ONE
Introduction to Cost Management 2
1 Cost Management and Strategy:
An Overview 2
2 Implementing Strategy: The Balanced
Scorecard and the Value Chain 30
3 Basic Cost Management Concepts 54
4 Job Costing 84
5 Activity Based Costing and Management 120
PART TWO
Planning and Decision Making 170
6 Cost Estimation 170
7 Cost Volume Profit Analysis 218
8 Strategy and the Master Budget 254
9 Decision Making with Relevant Costs
and a Strategic Emphasis 316
10 Cost Planning for the Product Life Cycle:
Target Costing, Theory of Constraints,
and Strategic Pricing 360
PART THREE
Process Costing and Cost Allocation 404
11 Process Costing 404
12 Cost Allocation: Service Departments and Joint
Product Costs 454
xvi
PART FOUR
Operational Control 494
13 The Flexible Budget and Standard Costing:
Direct Materials and Direct Labor 494
14 The Flexible Budget: Factory Overhead 550
15 The Flexible Budget: Further Analysis of
Productivity and Sales 610
16 The Management and Control of Quality 648
PART FIVE
Management Control 698
17 Management Control and Strategic
Performance Measurement 698
18 Strategic Investment Units and Transfer
Pricing 742
PART SIX
Advanced Topics in Cost Management 784
19 Management Compensation, Business Analysis,
and Business Valuation 784
20 Capital Budgeting 818
PRESENT VALUE TABLES 870
GLOSSARY 872
INDEX 882
Contents
PART ONE
INTRODUCTION TO COST
MANAGEMENT 2
Chapter 1 Cost Management and Strategy:
An Overview 2
The Uses of Cost Management 3
The Four Functions of Management 4
Strategic Management and Strategic Cost Management 6
Types of Organizations 6
The Contemporary Business Environment 7
The Global Business Environment 7
Manufacturing Technologies 8
The New Economy: Use of Information Technology,
the Internet, and E Commerce 8
Focus on the Customer 8
Management Organization 9
Social, Political, and Cultural Considerations 9
The Strategic Focus of Cost Management 10
Contemporary Management Techniques 10
Benchmarking 10
Total Quality Management 11
Business Process Improvement 11
Activity Based Costing and Management 11
Reengineering 11
The Theory of Constraints II
Mass Customization 12
Target Costing 12
Life Cycle Costing 12
The Value Chain 12
The Balanced Scorecard 12
How a Firm Succeeds: The Competitive Strategy 13
Strategic Measures of Success 14
Developing a Competitive Strategy: Strategic
Positioning 15
Cost Leadership 15
Differentiation 16
Other Strategic Issues 16
The Professional Environment of Cost Management 17
Professional Organizations 17
Professional Certifications 19
Professional Ethics 20
Summary 21
Appendix A: More about Strategy 22
Key Terms 23
Comments on Cost Management in Action 23
Self Study Problem 24
Questions 24
Brief Exercises 25
Exercises 25
ZD
Problems 26
Solution to Self Study Problem 29
Chapter 2 Implementing Strategy: The Balanced
Scorecard and the Value Chain 30
Strengths Weaknesses Opportunities Threats (SWOT)
Analysis 31
Execution 33
Value Chain Analysis 35
Value Chain Analysis in Computer Manufacturing 37
The Balanced Scorecard 38
The Balanced Scorecard Reflects Strategy 39
The Strategy Map 40
Expanding the Balanced Scorecard Sustainability 42
Summary 43
Key Terms 43
Comments on Cost Management in Action 43
Self Study Problems 44
Questions 44
Brief Exercises 45
Exercises 45
Problems 45
Solutions to Self Study Problems 52
Chapter 3 Basic Cost Management Concepts 54
Cost Drivers, Cost Pools, and Cost Objects 55
Cost Assignment and Cost Allocation: Direct and Indirect
Costs 55
Cost Drivers and Cost Behavior 58
Activity Based Cost Drivers 58
Volume Based Cost Drivers 59
Structural and Executional Cost Drivers 63
Cost Concepts for Product and Service Costing 64
Cost Accounting for Products and Sendees 64
Product Costs and Period Costs 64
Manufacturing, Merchandising, and Sen ice Costing 65
Cost Concepts for Planning and Decision Making 68
Relevant Cost 68
Attributes of Cost Information for Decision Making 69
Cost Concepts for Management and Operational
Control 70
Controllability 70
Summary 70
Key Terms 71
Comments on Cost Management in Action 71
Self Study Problem 71
Questions 72
Brief Exercises 72
Exercises 73 xvi
xviii Contents
Problems 78
Solution to Self Study Problem 82
Chapter 4 Job Costing 84
Product Costing Systems 84
Cost Accumulation: Job or Process Costing? 85
Cost Measurement: Actual, Normal, or Standard Costing? 85
Overhead Assignment under Normal Costing: Volume Based
or Activity Based? 85
The Strategic Role of Product Costing 86
Job Costing: The Cost Flows 86
Direct Materials Costs 87
Direct Labor Costs 89
Factory Overhead Costs 91
Actual Costing 91
Normal Costing 91
The Application of Factory Overhead in Normal
Costing 93
Cost Drivers for Factory Overhead Application 93
Applying Factory Overhead Costs 93
Departmental Overhead Rates 94
Disposition of Underapplied and Overapplied Overhead 95
Job Costing in Service Industries 97
Operation Costing 98
Summary 100
Appendix A: Spoilage, Rework, and Scrap in Job
Costing 101
Key Terms 103
Comments on Cost Management in Action 103
Self Study Problem 103
Questions 104
Brief Exercises 104
Exercises 105
Problems 108
Solution to Self Study Problem 118
Chapter 5 Activity Based Costing
and Management 120
The Strategic Role of Activity Based Costing 120
Role of Volume Based Costing 121
Activity Based Costing 122
Resources, Activities, Resource Consumption Cost Drivers,
and Activity Consumption Cost Drivers 122
What Is A ctivity Based Costing? 122
The Two Stage Cost Assignment Procedure 123
Steps in Developing an Activity Based Costing System 124
Step 1: Identify Resource Costs and Activities 124
Step 2: Assign Resource Costs to Activities 125
Step 3: Assign Activity Costs to Cost Objects 126
Benefits and Limitations of Activity Based Costing 126
Benefits 126
Limitations 127
A Comparison of Volume Based and Activity Based
Costing 128
Volume Based Costing 128
Activity Based Costing 129
Activity Based Management 130
What Is Activity Based Management? 130
Activity Analysis 131
Value Added Analysis 131
Activity Based Costing/Management (ABC/M)
Applications 133
ABC/M in Manufacturing: Industrial Air Conditioner
Units 133
ABC/M Application in the Service Industry: A Retirement
and Assisted Living Community 135
ABC/M Applications in Government 136
Customer Profitability Analysis 13 8
Customer Cost Analysis 139
Customer Profitability Analysis 140
Customer Value Assessment 141
Implementation Issues 142
Multiple Stage Activity Based Costing 143
Time Driven A ctivity Based Costing 143
Summary 144
Key Terms 144
Comments on Cost Management in Action 145
Self Study Problem 145
Questions 146
Brief Exercises 146
Exercises 147
Problems 153
Solution to Self Study Problem 167
PART TWO
PLANNING AND DECISION MAKING 170
Chapter 6 Cost Estimation 170
Strategic Role of Cost Estimation 170
Using Cost Estimation to Predict Future Costs 171
Using Cost Estimation to Identify Cost Drivers 171
Six Steps of Cost Estimation 172
Step 1: Define the Cost Object to Be Estimated 172
Step 2: Determine the Cost Drivers 172
Step 3: Collect Consistent and Accurate Data 172
Step 4: Graph the Data 172
Step 5: Select and Employ the Estimation Method 173
Step 6: Assess the Accuracy of the Cost Estimation 173
Cost Estimation Methods 173
An Illustration of Cost Estimation 173
High Low Method 173
Work Measurement 176
Regression A nalysis 176
Using Spreadsheet Software for Regression Analysis 182
Data Requirements and Implementation Problems 183
Data Accuracy 183
Selecting the Time Period 183
Nonlinearity Problems 184
Summary 185
Appendix A: Learning Curve Analysis 186
Appendix B: Regression Analysis 189
Key Terms 195
Comments on Cost Management in Action 195
Self Study Problems 196
Questions 197
Brief Exercises 198
Exercises 199
Problems 202
Solutions to Self Study Problems 214
Chapter 7 Cost Volume Profit Analysis 218
Cost Volume Profit Analysis 218
Contribution Margin and Contribution Income Statement 219
Strategic Role of CVP Analysis 220
CVP Analysis for Breakeven Planning 222
Equation Method: For Breakeven in Units 222
Equation Method: For Breakeven in Dollars 222
Contribution Margin Method 223
CVP Analysis for Profit Planning 225
Revenue Planning 225
Cost Planning 225
Including Income Taxes in CVP Analysis 228
CVP Analysis for Activity Based Costing 229
Sensitivity Analysis of CVP Results 231
What lfAnalysis of Sales: Contribution Margin
and Contribution Margin Ratio 231
Margin of Safety 231
Operating Leverage 232
CVP Analysis with Two or More Products 234
CVP Analysis for Not for Profit Organizations 236
Assumptions and Limitations of CVP Analysis 236
Linearity and the Relevant Range 236
Identifying Fixed and Variable Costs for CVP Analysis 237
Summary 238
Key Terms 239
Comments on Cost Management in Action 239
Self Study Problem 239
Questions 239
Brief Exercises 240
Exercises 240
Problems 242
Solution to Self Study Problem 253
Chapter 8 Strategy and the Master Budget 254
Role of Budgets 255
Strategy, the Long Term Plan, and the Master
Budget 256
Importance of Strategy in Budgeting 256
Formulation of Strategy 258
Strategic Coals and Long Term Objectives 258
Short Term Objectives and the Master Budget 258
Budgeting Process 260
Budget Committee 260
Budget Period 261
Budget Guidelines 262
Initial Budget Proposal 262
Negotiation, Review, and Approval 262
Revision 263
Contents xix
Master Budget 263
Sales Budget 263
Manufacturing Budgets 265
Merchandise Purchases Budget 269
Selling and General Administrative Expense Budget 271
Cash Receipts (Collections) Budget 272
Cash Budget 272
Budgeted Income Statement 274
Budgeted Balance Sheet 2 74
Budgeting in Service Companies and International Firms,
and Not for Profit Organizations 276
Budgeting in Service Industries 276
Budgeting in Not for Profit Organizations 278
Budgeting in International Settings 278
Alternative Budgeting Approaches 279
Zero Base Budgeting (ZBB) 2 79
Activity Based Budgeting (ABB) 280
Kaizen (Continuous Improvement) Budgeting 281
Computer Software in Budgeting and Planning 282
Ethical and Behavioral Issues in Budgeting 284
Ethics in Budgeting 284
Goal Congruence 284
Difficulty Level of the Budget Target 285
Authoritative or Participative Budgeting? 286
Role of the Budget Department or Controller 286
Summary 287
Key Terms 287
Comments on Cost Management in Action 287
Self Study Problems 288
Questions 289
Brief Exercises 290
Exercises 291
Problems 299
Solutions to Self Study Problems 313
Chapter 9 Decision Making with Relevant Costs
and a Strategic Emphasis 316
The Decision Making Process 317
Relevant Cost Analysis 318
Relevant Cost Information 318
Batch Level Cost Drivers 319
Fixed Costs and Depreciation 320
Other Relevant Information: Opportunity Costs 320
Strategic Cost Analysis 321
Special Order Decisions 322
Cost Analysis 322
Strategic Analysis 323
Is TTS Now Operating at Full Capacity? 323
Excessive Relevant Cost Pricing 324
Other Important Factors 325
Make, Lease, or Buy Decision 325
Cost Analysis 325
Strategic Analysis 327
Sell Before or After Additional Processing 327
Cost Analysis 327
Strategic Analysis 328
XX Contents
Profitability Analysis 329
Profitability Analysis: Keep or Drop a Product Line 329
Strategic Analysis 330
Profitability Analysis: Evaluating Programs 331
Profitability Analysis: Service and Not for Profit
Organizations 331
Multiple Products and Limited Resources 332
Case 1: One Production Constraint 332
Case 2: Two or More Production Constraints 333
Behavioral and Implementation Issues 335
Consideration of Strategic Objectives 335
Predatory Pricing 335
Replacement of Variable Costs with Fixed Costs 336
Proper Identification of Relevant Factors 336
Summary 337
Appendix A: Linear Programming and the Product Mix
Decision 337
Key Terms 340
Comments on Cost Management in Action 340
Self Study Problems 340
Questions 341
Brief Exercises 341
Exercises 342
Problems 346
Solutions to Self Study Problems 358
Chapter 10 Cost Planning for the Product Life
Cycle: Target Costing, Theory of Constraints,
and Strategic Pricing 360
Target Costing 362
Value Engineering 363
Target Costing and Kaizen 365
An Illustration: Target Costing in Health Product
Manufacturing 366
An Illustration Using Quality Function Deployment (QFD) 367
Benefits of Target Costing 368
The Theory of Constraints 369
The Use of the Theory of Constraints Analysis in Health
Product Manufacturing 370
Steps in the Theory of Constraints Analysis 370
Theory of Constraints Reports 375
Activity Based Costing and the Theory of Constraints 375
Life Cycle Costing 376
The Importance of Design 377
The Use of Life Cycle Costing in a Software Firm 378
Strategic Pricing Using the Product Life Cycle 379
Pricing Using the Cost Life Cycle 379
Strategic Pricing for Phases of the Sales Life Cycle 381
The Use of the Sales Life Cycle in Computer
Manufacturing 381
Summary 382
Appendix A: Using the Flow Diagram to Identify
Constraints 382
Key Terms 384
Comments on Cost Management in Action 384
Self Study Problem 384
Questions 385
Brief Exercises 385
Exercises 386
Problems 391
Solution to Self Study Problem 401
PART THREE
PROCESS COSTING AND COST
ALLOCATION 404
Chapter 11 Process Costing 404
Characteristics of Process Costing Systems 405
Equivalent Units 405
Flow of Costs in Process Costing 406
Steps in Process Costing 407
Process Costing Methods 408
Illustration of Process Costing 408
Weighted Average Method 409
First In, First Out (FIFO) Method 412
Comparison of Weighted Average and FIFO Methods 419
Process Costing with Multiple Departments 419
Transferred In Costs 420
Weighted Average Method 420
The FIFO Method 422
Journal Entries for Process Costing 425
Implementation and Enhancement of Process Costing 426
Activity Based Costing and the Theory of Constraints 426
Just in Time Systems and Backflush Costing 427
Summary 428
Appendix A: Spoilage in Process Costing 428
Key Terms 432
Comments on Cost Management in Action 432
Self Study Problems 432
Questions 433
Brief Exercises 434
Exercises 434
Problems 437
Solutions to Self Study Problems 448
Chapter 12 Cost Allocation: Service Departments
and Joint Product Costs 454
The Strategic Role of Cost Allocation 455
The Ethical Issues of Cost Allocation 456
Cost Allocation to Service and Production
Departments 456
Departmental Approach 457
Cost Allocation in Service Industries 468
Joint Product Costing 470
Methods for Allocating Joint Costs to Joint Products 471
Summary 475
Appendix A: By Product Costing 475
Key Terms 478
Comments on Cost Management in Action 478
Self Study Problem 478
Questions 478
Brief Exercises 479
Exercises 480
Problems 481
Solution to Self Study Problem 492
PART FOUR
OPERATIONAL CONTROL 494
Chapter 13 The Flexible Budget and Standard
Costing: Direct Materials and Direct Labor 494
Management Accounting and Control Systems 495
Evaluating Operating Performance 495
Effectiveness 495
Standard Costs 497
Standard Costs versus a Standard Cost System 497
Types of Standards 498
Selection of Standards 499
Sources of Standards 499
Standard Setting Procedures 501
Establishing Standard Costs 501
Standard Cost Sheet 502
Flexible Budgets and Operational Control 504
The Flexible Budget 504
Assessing Efficiency 505
Breakdown of the Total Flexible Budget Variance 507
Selling Price Variance 508
Variable Cost Flexible Budget Variances 508
Further Analysis of the Total Variable Cost Flexible Budget
Variance 509
General Model for Analysis of Variable Cost Variances 509
Direct Materials Variances 510
Direct Labor Variances 513
Timing of Variance Recognition 515
Effect of the New Manufacturing Technology 516
Behavioral and Implementation Issues 516
Summary 517
Appendix A: Recording Cost Flows and Variances
in a Standard Cost System 519
Key Terms 522
Comments on Cost Management in Action 522
Self Study Problems 523
Questions 524
Brief Exercises 525
Exercises 526
Problems 534
Solutions to Self Study Problems 547
Chapter 14 The Flexible Budget: Factory
Overhead 550
Standard Overhead Costs: Planning versus Control 551
Variance Analysis for Factory Overhead Costs 552
Variable Overhead Cost Analysis 553
Interpretation and Implications of Variable Overhead
Variances 554
Contents xxi
Fixed Overhead Cost Analysis 555
Interpretation of Fixed Factory Overhead Variances 559
Alternative Analyses of Factory Overhead Variances 559
Summary of Factory Overhead Variances 561
Recording Standard Factory Overhead Costs 562
Journal Entries and Variances for Factory Overhead
Costs 562
Variance Disposition 563
Standard Costs in Service Organizations 565
Overhead Variances in ABC Systems 568
ABC Based Flexible Budgets for Control 569
Investigation of Variances 572
Type of Standard 572
Expectations of the Organization 572
Magnitude, Pattern, and Impact of a Variance 572
Causes and Controllability 573
Company Practices 576
Summary 576
Appendix A: Variance Investigation Decisions Under
Uncertainty 578
Key Terms 580
Comments on Cost Management in Action 580
Self Study Problems 581
Questions 582
Brief Exercises 583
Exercises 583
Problems 593
Solutions to Self Study Problems 606
Chapter 15 The Flexible Budget: Further Analysis
of Productivity and Sales 610
The Strategic Role of the Flexible Budget in Analyzing
Sales and Productivity 610
Analyzing Productivity 612
Partial Productivity 613
Total Productivity 618
Analyzing Sales: Comparison with the Master
Budget 619
Sales Volume Variance Decomposed: Sales Quantity
and Sales Mix Variances 620
Sales Quantity Variance Decomposed: Market Size
and Market Share Variances 624
Analyzing Sales: Comparison with Prior Year
Results 627
Analysis of Selling Price and Volume Variances 628
Analysis of Mix and Quantity Variances 629
Analysis of Variable Cost Variances 629
Summary 630
Key Terms 631
Comments on Cost Management in Action 631
Self Study Problems 631
Questions 632
Brief Exercises 633
Exercises 634
Problems 636
Solutions to Self Study Problems 644
xxii Contents
Chapter 16 The Management and Control
of Quality 648
The Strategic Importance of Quality 649
Baldrige Quality Award 649
ISO 9000 and ISO 14000 649
Quality and Profitability: Conceptual Linkage 650
Empirical Evidence—Does TQM Matter? 651
Accounting s Role in the Management and Control of
Quality 652
Chapter Preview 652
Total Quality Management (TQM) 652
The Meaning of Quality 652
Characteristics of Total Quality Management 654
The Need for a New Accounting System 654
Comprehensive Framework for Managing and Controlling
Quality 654
Knowledge of Business Processes 654
Role of the Customer 655
Financial Component 656
Nonfinancial Performance Indicators 656
Feedback Loops 656
Relevant Cost Analysis 656
Link to Operations Management 656
Breadth of the System 656
Setting Quality Related Expectations 657
Setting Quality Expectations: A Six Sigma Approach 657
Setting Quality Expectations: Goalpost versus Absolute
Conformance Standards 659
Goalpost Conformance 659
Absolute Quality Conformance 660
Goalpost or Absolute Conformance? 660
Financial Measures and Costs of Quality 661
Relevant Cost Analysis 661
Cost of Quality (COQ) Reporting 662
Quality Cost Reports 664
Data Definition, Sources, and Collection 664
Report Format 665
Illustration of a Cost of Quality Report 665
COQ and Activity Based Costing (ABC) 666
Nonfinancial Quality Indicators 666
Internal Nonfinancial Quality Metrics 666
External (Customer Satisfaction) Quality Metrics 667
Role of Nonfinancial Performance Measures 667
Detecting and Correcting Poor Quality 668
Detecting Poor Quality 668
Taking Corrective A ction 6 70
Summary 673
Appendix A: Taguchi Quality Loss Functions 673
Key Terms 676
Comments on Cost Management in Action 677
Self Study Problems 677
Questions 678
Brief Exercises 679
Exercises 680
Problems 687
Solutions to Self Study Problems 696
PART FIVE
MANAGEMENT CONTROL 698
Chapter 17 Management Control and
Strategic Performance Measurement 698
Performance Evaluation and Control 699
Operational Control versus Management Control 699
Objectives of Management Control 699
Employment Contracts 700
Design of Management Control Systems for Motivation
and Evaluation 702
Informal Control Systems 703
Formal Control Systems 704
Strategic Performance Measurement 704
Decentralization 704
Types of Strategic Business Units 705
The Balanced Scorecard 706
Cost Strategic Business Units 706
Strategic Issues Related to Implementing Cost SBUs 706
Implementing Cost SBUs in Departments 708
Outsourcing Cost SBUs 710
Cost Allocation 710
Revenue Strategic Business Units 711
Profit Strategic Business Units 712
Strategic Role of Profit SBUs 712
The Contribution Income Statement 713
Variable Costing versus Full Costing 714
Strategic Performance Measurement and the Balanced
Scorecard 716
Management Control in Service Firms and Not for Profit
Organizations 720
Summary 722
Key Terms 722
Comments on Cost Management in Action 722
Self Study Problem 723
Questions 723
Brief Exercises 724
Exercises 725
Problems 727
Solution to Self Study Problem 740
Chapter 18 Strategic Investment Units
and Transfer Pricing 742
Part One: Strategic Investment Units 743
The Strategic Role of Investment Units 743
Return on Investment 744
ROI Equals Return on Sales Times Asset Turnover 744
Illustration of Evaluation Using Return on Investment 744
Use of Return on Investment 747
Strategic Issues in Using Return on Investment 751
Residual Income 753
Limitations of Residual Income 754
Economic Value Added 755
Using Average Total Assets 755
Part Two: Transfer Pricing 756
When Is Transfer Pricing Important? 756
Objectives of Transfer Pricing 757
International Transfer Pricing Objectives 75 7
Transfer Pricing Methods 758
Choosing the Right Transfer Pricing Method 758
International Tax Issues in Transfer Pricing 761
The Arm s Length Standard 761
Advance Pricing Agreements 762
Summary 763
Key Terms 763
Comments on Cost Management in Action 763
Self Study Problems 764
Questions 764
Brief Exercises 764
Exercises 765
Problems 771
Solutions to Self Study Problems 782
PART SIX
ADVANCED TOPICS IN COST
MANAGEMENT 784
Chapter 19 Management Compensation, Business
Analysis, and Business Valuation 784
Part One: Management Compensation 784
Types of Management Compensation 785
Strategic Role and Objectives of Management
Compensation 786
Design the Compensation Plan for Existing Strategic
Conditions 786
Risk Aversion and Management Compensation 786
Ethical Issues 787
Objectives of Management Compensation 787
Bonus Plans 788
Bases for Bonus Compensation 788
Bonus Compensation Pools 790
Bonus Payment Options 790
Tax Planning and Financial Reporting 792
Management Compensation in Service Firms 793
Part Two: Business Analysis and Business
Valuation 794
Business Analysis 795
The Balanced Scorecard 795
Financial Ratio A nalysis 795
Business Valuation 798
The Discounted Cash Flow Method 798
Multiples Based Valuation 800
Enterprise Value 800
Contents xxiii
Summary 801
Key Terms 801
Comments on Cost Management in Action 801
Self Study Problem 802
Questions 802
Brief Exercises 803
Exercises 803
Problems 807
Solution to Self Study Problem 816
Chapter 20 Capital Budgeting 818
Strategy and the Capital Budgeting Process 819
Underlying Nature of Capital Expenditures 819
Organizational Strategy and the Nature of Capital
Investment Analysis 819
Effect of Capital Expenditures on Strategic Cost Drivers 820
Chapter Overview—Where Are We Headed? 821
The Role of Accounting in the Capital Budgeting
Process 821
Linkage to Master Budget 821
Linkage to the Balanced Scorecard (BSC) 821
Generation of Relevant Financial Data for Decision Making
Purposes 823
Conducting Post Audits 823
Identification of Relevant Cash Flow Data for Capital
Expenditure Analysis 824
Why Focus on Cash Flows? 824
Cash Flows—A Framework for Analysis 825
Sample Data Set: Mendoza Company—Equipment Replacement
Decision 825
Determining After Tax Cash Flows for Capital Investment
Analysis 827
Recap—Cash Flow Information for the Mendoza Companv
Investment Proposal 832
Discounted Cash Flow (DCF) Capital Budgeting
Decision Models 832
Types of Capital Budgeting Decision Models 832
DCF Models: Specifying the Discount Rate 832
Estimating the WACC 834
Net Present Value (NPV) Decision Model 836
Internal Rate of Return (IRR) Decision Model 837
Comparison of NPV and IRR Methods: Which to Use? 839
Sensitivity Analysis 839
What lfAnalyses 839
Scenario Analysis 841
Monte Carlo Simulation 841
Other Capital Budgeting Decision Models 842
Payback Period 842
Accounting (Book) Rate of Return 844
Behavioral Issues in Capital Budgeting 846
Common Behavioral Problems: Cost Escalation,
Incrementalism, and Uncertainty Intolerance 846
Goal Congruency Issues 847
Addressing the Goal Congruency Problem 847
xxiv Contents
Summary 848
Appendix A: DCF Models: Some Advanced
Considerations 848
Key Terms 851
Comments on Cost Management in Action 851
Self Study Problem 852
Questions 853
Brief Exercises 854
Exercises 855
Problems 858
Solution to Self Study Problem 866
Present Value Tables 870
Glossary 872
Index 882
|
| adam_txt |
Brief Contents
PART ONE
Introduction to Cost Management 2
1 Cost Management and Strategy:
An Overview 2
2 Implementing Strategy: The Balanced
Scorecard and the Value Chain 30
3 Basic Cost Management Concepts 54
4 Job Costing 84
5 Activity Based Costing and Management 120
PART TWO
Planning and Decision Making 170
6 Cost Estimation 170
7 Cost Volume Profit Analysis 218
8 Strategy and the Master Budget 254
9 Decision Making with Relevant Costs
and a Strategic Emphasis 316
10 Cost Planning for the Product Life Cycle:
Target Costing, Theory of Constraints,
and Strategic Pricing 360
PART THREE
Process Costing and Cost Allocation 404
11 Process Costing 404
12 Cost Allocation: Service Departments and Joint
Product Costs 454
xvi
PART FOUR
Operational Control 494
13 The Flexible Budget and Standard Costing:
Direct Materials and Direct Labor 494
14 The Flexible Budget: Factory Overhead 550
15 The Flexible Budget: Further Analysis of
Productivity and Sales 610
16 The Management and Control of Quality 648
PART FIVE
Management Control 698
17 Management Control and Strategic
Performance Measurement 698
18 Strategic Investment Units and Transfer
Pricing 742
PART SIX
Advanced Topics in Cost Management 784
19 Management Compensation, Business Analysis,
and Business Valuation 784
20 Capital Budgeting 818
PRESENT VALUE TABLES 870
GLOSSARY 872
INDEX 882
Contents
PART ONE
INTRODUCTION TO COST
MANAGEMENT 2
Chapter 1 Cost Management and Strategy:
An Overview 2
The Uses of Cost Management 3
The Four Functions of Management 4
Strategic Management and Strategic Cost Management 6
Types of Organizations 6
The Contemporary Business Environment 7
The Global Business Environment 7
Manufacturing Technologies 8
The New Economy: Use of Information Technology,
the Internet, and E Commerce 8
Focus on the Customer 8
Management Organization 9
Social, Political, and Cultural Considerations 9
The Strategic Focus of Cost Management 10
Contemporary Management Techniques 10
Benchmarking 10
Total Quality Management 11
Business Process Improvement 11
Activity Based Costing and Management 11
Reengineering 11
The Theory of Constraints II
Mass Customization 12
Target Costing 12
Life Cycle Costing 12
The Value Chain 12
The Balanced Scorecard 12
How a Firm Succeeds: The Competitive Strategy 13
Strategic Measures of Success 14
Developing a Competitive Strategy: Strategic
Positioning 15
Cost Leadership 15
Differentiation 16
Other Strategic Issues 16
The Professional Environment of Cost Management 17
Professional Organizations 17
Professional Certifications 19
Professional Ethics 20
Summary 21
Appendix A: More about Strategy 22
Key Terms 23
Comments on Cost Management in Action 23
Self Study Problem 24
Questions 24
Brief Exercises 25
Exercises 25
ZD
Problems 26
Solution to Self Study Problem 29
Chapter 2 Implementing Strategy: The Balanced
Scorecard and the Value Chain 30
Strengths Weaknesses Opportunities Threats (SWOT)
Analysis 31
Execution 33
Value Chain Analysis 35
Value Chain Analysis in Computer Manufacturing 37
The Balanced Scorecard 38
The Balanced Scorecard Reflects Strategy 39
The Strategy Map 40
Expanding the Balanced Scorecard Sustainability 42
Summary 43
Key Terms 43
Comments on Cost Management in Action 43
Self Study Problems 44
Questions 44
Brief Exercises 45
Exercises 45
Problems 45
Solutions to Self Study Problems 52
Chapter 3 Basic Cost Management Concepts 54
Cost Drivers, Cost Pools, and Cost Objects 55
Cost Assignment and Cost Allocation: Direct and Indirect
Costs 55
Cost Drivers and Cost Behavior 58
Activity Based Cost Drivers 58
Volume Based Cost Drivers 59
Structural and Executional Cost Drivers 63
Cost Concepts for Product and Service Costing 64
Cost Accounting for Products and Sendees 64
Product Costs and Period Costs 64
Manufacturing, Merchandising, and Sen'ice Costing 65
Cost Concepts for Planning and Decision Making 68
Relevant Cost 68
Attributes of Cost Information for Decision Making 69
Cost Concepts for Management and Operational
Control 70
Controllability 70
Summary 70
Key Terms 71
Comments on Cost Management in Action 71
Self Study Problem 71
Questions 72
Brief Exercises 72
Exercises 73 xvi
xviii Contents
Problems 78
Solution to Self Study Problem 82
Chapter 4 Job Costing 84
Product Costing Systems 84
Cost Accumulation: Job or Process Costing? 85
Cost Measurement: Actual, Normal, or Standard Costing? 85
Overhead Assignment under Normal Costing: Volume Based
or Activity Based? 85
The Strategic Role of Product Costing 86
Job Costing: The Cost Flows 86
Direct Materials Costs 87
Direct Labor Costs 89
Factory Overhead Costs 91
Actual Costing 91
Normal Costing 91
The Application of Factory Overhead in Normal
Costing 93
Cost Drivers for Factory Overhead Application 93
Applying Factory Overhead Costs 93
Departmental Overhead Rates 94
Disposition of Underapplied and Overapplied Overhead 95
Job Costing in Service Industries 97
Operation Costing 98
Summary 100
Appendix A: Spoilage, Rework, and Scrap in Job
Costing 101
Key Terms 103
Comments on Cost Management in Action 103
Self Study Problem 103
Questions 104
Brief Exercises 104
Exercises 105
Problems 108
Solution to Self Study Problem 118
Chapter 5 Activity Based Costing
and Management 120
The Strategic Role of Activity Based Costing 120
Role of Volume Based Costing 121
Activity Based Costing 122
Resources, Activities, Resource Consumption Cost Drivers,
and Activity Consumption Cost Drivers 122
What Is A ctivity Based Costing? 122
The Two Stage Cost Assignment Procedure 123
Steps in Developing an Activity Based Costing System 124
Step 1: Identify Resource Costs and Activities 124
Step 2: Assign Resource Costs to Activities 125
Step 3: Assign Activity Costs to Cost Objects 126
Benefits and Limitations of Activity Based Costing 126
Benefits 126
Limitations 127
A Comparison of Volume Based and Activity Based
Costing 128
Volume Based Costing 128
Activity Based Costing 129
Activity Based Management 130
What Is Activity Based Management? 130
Activity Analysis 131
Value Added Analysis 131
Activity Based Costing/Management (ABC/M)
Applications 133
ABC/M in Manufacturing: Industrial Air Conditioner
Units 133
ABC/M Application in the Service Industry: A Retirement
and Assisted Living Community 135
ABC/M Applications in Government 136
Customer Profitability Analysis 13 8
Customer Cost Analysis 139
Customer Profitability Analysis 140
Customer Value Assessment 141
Implementation Issues 142
Multiple Stage Activity Based Costing 143
Time Driven A ctivity Based Costing 143
Summary 144
Key Terms 144
Comments on Cost Management in Action 145
Self Study Problem 145
Questions 146
Brief Exercises 146
Exercises 147
Problems 153
Solution to Self Study Problem 167
PART TWO
PLANNING AND DECISION MAKING 170
Chapter 6 Cost Estimation 170
Strategic Role of Cost Estimation 170
Using Cost Estimation to Predict Future Costs 171
Using Cost Estimation to Identify Cost Drivers 171
Six Steps of Cost Estimation 172
Step 1: Define the Cost Object to Be Estimated 172
Step 2: Determine the Cost Drivers 172
Step 3: Collect Consistent and Accurate Data 172
Step 4: Graph the Data 172
Step 5: Select and Employ the Estimation Method 173
Step 6: Assess the Accuracy of the Cost Estimation 173
Cost Estimation Methods 173
An Illustration of Cost Estimation 173
High Low Method 173
Work Measurement 176
Regression A nalysis 176
Using Spreadsheet Software for Regression Analysis 182
Data Requirements and Implementation Problems 183
Data Accuracy 183
Selecting the Time Period 183
Nonlinearity Problems 184
Summary 185
Appendix A: Learning Curve Analysis 186
Appendix B: Regression Analysis 189
Key Terms 195
Comments on Cost Management in Action 195
Self Study Problems 196
Questions 197
Brief Exercises 198
Exercises 199
Problems 202
Solutions to Self Study Problems 214
Chapter 7 Cost Volume Profit Analysis 218
Cost Volume Profit Analysis 218
Contribution Margin and Contribution Income Statement 219
Strategic Role of CVP Analysis 220
CVP Analysis for Breakeven Planning 222
Equation Method: For Breakeven in Units 222
Equation Method: For Breakeven in Dollars 222
Contribution Margin Method 223
CVP Analysis for Profit Planning 225
Revenue Planning 225
Cost Planning 225
Including Income Taxes in CVP Analysis 228
CVP Analysis for Activity Based Costing 229
Sensitivity Analysis of CVP Results 231
What lfAnalysis of Sales: Contribution Margin
and Contribution Margin Ratio 231
Margin of Safety 231
Operating Leverage 232
CVP Analysis with Two or More Products 234
CVP Analysis for Not for Profit Organizations 236
Assumptions and Limitations of CVP Analysis 236
Linearity and the Relevant Range 236
Identifying Fixed and Variable Costs for CVP Analysis 237
Summary 238
Key Terms 239
Comments on Cost Management in Action 239
Self Study Problem 239
Questions 239
Brief Exercises 240
Exercises 240
Problems 242
Solution to Self Study Problem 253
Chapter 8 Strategy and the Master Budget 254
Role of Budgets 255
Strategy, the Long Term Plan, and the Master
Budget 256
Importance of Strategy in Budgeting 256
Formulation of Strategy 258
Strategic Coals and Long Term Objectives 258
Short Term Objectives and the Master Budget 258
Budgeting Process 260
Budget Committee 260
Budget Period 261
Budget Guidelines 262
Initial Budget Proposal 262
Negotiation, Review, and Approval 262
Revision 263
Contents xix
Master Budget 263
Sales Budget 263
Manufacturing Budgets 265
Merchandise Purchases Budget 269
Selling and General Administrative Expense Budget 271
Cash Receipts (Collections) Budget 272
Cash Budget 272
Budgeted Income Statement 274
Budgeted Balance Sheet 2 74
Budgeting in Service Companies and International Firms,
and Not for Profit Organizations 276
Budgeting in Service Industries 276
Budgeting in Not for Profit Organizations 278
Budgeting in International Settings 278
Alternative Budgeting Approaches 279
Zero Base Budgeting (ZBB) 2 79
Activity Based Budgeting (ABB) 280
Kaizen (Continuous Improvement) Budgeting 281
Computer Software in Budgeting and Planning 282
Ethical and Behavioral Issues in Budgeting 284
Ethics in Budgeting 284
Goal Congruence 284
Difficulty Level of the Budget Target 285
Authoritative or Participative Budgeting? 286
Role of the Budget Department or Controller 286
Summary 287
Key Terms 287
Comments on Cost Management in Action 287
Self Study Problems 288
Questions 289
Brief Exercises 290
Exercises 291
Problems 299
Solutions to Self Study Problems 313
Chapter 9 Decision Making with Relevant Costs
and a Strategic Emphasis 316
The Decision Making Process 317
Relevant Cost Analysis 318
Relevant Cost Information 318
Batch Level Cost Drivers 319
Fixed Costs and Depreciation 320
Other Relevant Information: Opportunity' Costs 320
Strategic Cost Analysis 321
Special Order Decisions 322
Cost Analysis 322
Strategic Analysis 323
Is TTS Now Operating at Full Capacity? 323
Excessive Relevant Cost Pricing 324
Other Important Factors 325
Make, Lease, or Buy Decision 325
Cost Analysis 325
Strategic Analysis 327
Sell Before or After Additional Processing 327
Cost Analysis 327
Strategic Analysis 328
XX Contents
Profitability Analysis 329
Profitability Analysis: Keep or Drop a Product Line 329
Strategic Analysis 330
Profitability Analysis: Evaluating Programs 331
Profitability Analysis: Service and Not for Profit
Organizations 331
Multiple Products and Limited Resources 332
Case 1: One Production Constraint 332
Case 2: Two or More Production Constraints 333
Behavioral and Implementation Issues 335
Consideration of Strategic Objectives 335
Predatory Pricing 335
Replacement of Variable Costs with Fixed Costs 336
Proper Identification of Relevant Factors 336
Summary 337
Appendix A: Linear Programming and the Product Mix
Decision 337
Key Terms 340
Comments on Cost Management in Action 340
Self Study Problems 340
Questions 341
Brief Exercises 341
Exercises 342
Problems 346
Solutions to Self Study Problems 358
Chapter 10 Cost Planning for the Product Life
Cycle: Target Costing, Theory of Constraints,
and Strategic Pricing 360
Target Costing 362
Value Engineering 363
Target Costing and Kaizen 365
An Illustration: Target Costing in Health Product
Manufacturing 366
An Illustration Using Quality Function Deployment (QFD) 367
Benefits of Target Costing 368
The Theory of Constraints 369
The Use of the Theory of Constraints Analysis in Health
Product Manufacturing 370
Steps in the Theory of Constraints Analysis 370
Theory of Constraints Reports 375
Activity Based Costing and the Theory of Constraints 375
Life Cycle Costing 376
The Importance of Design 377
The Use of Life Cycle Costing in a Software Firm 378
Strategic Pricing Using the Product Life Cycle 379
Pricing Using the Cost Life Cycle 379
Strategic Pricing for Phases of the Sales Life Cycle 381
The Use of the Sales Life Cycle in Computer
Manufacturing 381
Summary 382
Appendix A: Using the Flow Diagram to Identify
Constraints 382
Key Terms 384
Comments on Cost Management in Action 384
Self Study Problem 384
Questions 385
Brief Exercises 385
Exercises 386
Problems 391
Solution to Self Study Problem 401
PART THREE
PROCESS COSTING AND COST
ALLOCATION 404
Chapter 11 Process Costing 404
Characteristics of Process Costing Systems 405
Equivalent Units 405
Flow of Costs in Process Costing 406
Steps in Process Costing 407
Process Costing Methods 408
Illustration of Process Costing 408
Weighted Average Method 409
First In, First Out (FIFO) Method 412
Comparison of Weighted Average and FIFO Methods 419
Process Costing with Multiple Departments 419
Transferred In Costs 420
Weighted Average Method 420
The FIFO Method 422
Journal Entries for Process Costing 425
Implementation and Enhancement of Process Costing 426
Activity Based Costing and the Theory of Constraints 426
Just in Time Systems and Backflush Costing 427
Summary 428
Appendix A: Spoilage in Process Costing 428
Key Terms 432
Comments on Cost Management in Action 432
Self Study Problems 432
Questions 433
Brief Exercises 434
Exercises 434
Problems 437
Solutions to Self Study Problems 448
Chapter 12 Cost Allocation: Service Departments
and Joint Product Costs 454
The Strategic Role of Cost Allocation 455
The Ethical Issues of Cost Allocation 456
Cost Allocation to Service and Production
Departments 456
Departmental Approach 457
Cost Allocation in Service Industries 468
Joint Product Costing 470
Methods for Allocating Joint Costs to Joint Products 471
Summary 475
Appendix A: By Product Costing 475
Key Terms 478
Comments on Cost Management in Action 478
Self Study Problem 478
Questions 478
Brief Exercises 479
Exercises 480
Problems 481
Solution to Self Study Problem 492
PART FOUR
OPERATIONAL CONTROL 494
Chapter 13 The Flexible Budget and Standard
Costing: Direct Materials and Direct Labor 494
Management Accounting and Control Systems 495
Evaluating Operating Performance 495
Effectiveness 495
Standard Costs 497
Standard Costs versus a Standard Cost System 497
Types of Standards 498
Selection of Standards 499
Sources of Standards 499
Standard Setting Procedures 501
Establishing Standard Costs 501
Standard Cost Sheet 502
Flexible Budgets and Operational Control 504
The Flexible Budget 504
Assessing Efficiency 505
Breakdown of the Total Flexible Budget Variance 507
Selling Price Variance 508
Variable Cost Flexible Budget Variances 508
Further Analysis of the Total Variable Cost Flexible Budget
Variance 509
General Model for Analysis of Variable Cost Variances 509
Direct Materials Variances 510
Direct Labor Variances 513
Timing of Variance Recognition 515
Effect of the New Manufacturing Technology 516
Behavioral and Implementation Issues 516
Summary 517
Appendix A: Recording Cost Flows and Variances
in a Standard Cost System 519
Key Terms 522
Comments on Cost Management in Action 522
Self Study Problems 523
Questions 524
Brief Exercises 525
Exercises 526
Problems 534
Solutions to Self Study Problems 547
Chapter 14 The Flexible Budget: Factory
Overhead 550
Standard Overhead Costs: Planning versus Control 551
Variance Analysis for Factory Overhead Costs 552
Variable Overhead Cost Analysis 553
Interpretation and Implications of Variable Overhead
Variances 554
Contents xxi
Fixed Overhead Cost Analysis 555
Interpretation of Fixed Factory Overhead Variances 559
Alternative Analyses of Factory Overhead Variances 559
Summary of Factory Overhead Variances 561
Recording Standard Factory Overhead Costs 562
Journal Entries and Variances for Factory Overhead
Costs 562
Variance Disposition 563
Standard Costs in Service Organizations 565
Overhead Variances in ABC Systems 568
ABC Based Flexible Budgets for Control 569
Investigation of Variances 572
Type of Standard 572
Expectations of the Organization 572
Magnitude, Pattern, and Impact of a Variance 572
Causes and Controllability 573
Company Practices 576
Summary 576
Appendix A: Variance Investigation Decisions Under
Uncertainty 578
Key Terms 580
Comments on Cost Management in Action 580
Self Study Problems 581
Questions 582
Brief Exercises 583
Exercises 583
Problems 593
Solutions to Self Study Problems 606
Chapter 15 The Flexible Budget: Further Analysis
of Productivity and Sales 610
The Strategic Role of the Flexible Budget in Analyzing
Sales and Productivity 610
Analyzing Productivity 612
Partial Productivity 613
Total Productivity 618
Analyzing Sales: Comparison with the Master
Budget 619
Sales Volume Variance Decomposed: Sales Quantity
and Sales Mix Variances 620
Sales Quantity Variance Decomposed: Market Size
and Market Share Variances 624
Analyzing Sales: Comparison with Prior Year
Results 627
Analysis of Selling Price and Volume Variances 628
Analysis of Mix and Quantity Variances 629
Analysis of Variable Cost Variances 629
Summary 630
Key Terms 631
Comments on Cost Management in Action 631
Self Study Problems 631
Questions 632
Brief Exercises 633
Exercises 634
Problems 636
Solutions to Self Study Problems 644
xxii Contents
Chapter 16 The Management and Control
of Quality 648
The Strategic Importance of Quality 649
Baldrige Quality Award 649
ISO 9000 and ISO 14000 649
Quality and Profitability: Conceptual Linkage 650
Empirical Evidence—Does TQM Matter? 651
Accounting's Role in the Management and Control of
Quality 652
Chapter Preview 652
Total Quality Management (TQM) 652
The Meaning of Quality 652
Characteristics of Total Quality Management 654
The Need for a New Accounting System 654
Comprehensive Framework for Managing and Controlling
Quality 654
Knowledge of Business Processes 654
Role of the Customer 655
Financial Component 656
Nonfinancial Performance Indicators 656
Feedback Loops 656
Relevant Cost Analysis 656
Link to Operations Management 656
Breadth of the System 656
Setting Quality Related Expectations 657
Setting Quality Expectations: A Six Sigma Approach 657
Setting Quality Expectations: Goalpost versus Absolute
Conformance Standards 659
Goalpost Conformance 659
Absolute Quality Conformance 660
Goalpost or Absolute Conformance? 660
Financial Measures and Costs of Quality 661
Relevant Cost Analysis 661
Cost of Quality (COQ) Reporting 662
Quality Cost Reports 664
Data Definition, Sources, and Collection 664
Report Format 665
Illustration of a Cost of Quality Report 665
COQ and Activity Based Costing (ABC) 666
Nonfinancial Quality Indicators 666
Internal Nonfinancial Quality Metrics 666
External (Customer Satisfaction) Quality Metrics 667
Role of Nonfinancial Performance Measures 667
Detecting and Correcting Poor Quality 668
Detecting Poor Quality 668
Taking Corrective A ction 6 70
Summary 673
Appendix A: Taguchi Quality Loss Functions 673
Key Terms 676
Comments on Cost Management in Action 677
Self Study Problems 677
Questions 678
Brief Exercises 679
Exercises 680
Problems 687
Solutions to Self Study Problems 696
PART FIVE
MANAGEMENT CONTROL 698
Chapter 17 Management Control and
Strategic Performance Measurement 698
Performance Evaluation and Control 699
Operational Control versus Management Control 699
Objectives of Management Control 699
Employment Contracts 700
Design of Management Control Systems for Motivation
and Evaluation 702
Informal Control Systems 703
Formal Control Systems 704
Strategic Performance Measurement 704
Decentralization 704
Types of Strategic Business Units 705
The Balanced Scorecard 706
Cost Strategic Business Units 706
Strategic Issues Related to Implementing Cost SBUs 706
Implementing Cost SBUs in Departments 708
Outsourcing Cost SBUs 710
Cost Allocation 710
Revenue Strategic Business Units 711
Profit Strategic Business Units 712
Strategic Role of Profit SBUs 712
The Contribution Income Statement 713
Variable Costing versus Full Costing 714
Strategic Performance Measurement and the Balanced
Scorecard 716
Management Control in Service Firms and Not for Profit
Organizations 720
Summary 722
Key Terms 722
Comments on Cost Management in Action 722
Self Study Problem 723
Questions 723
Brief Exercises 724
Exercises 725
Problems 727
Solution to Self Study Problem 740
Chapter 18 Strategic Investment Units
and Transfer Pricing 742
Part One: Strategic Investment Units 743
The Strategic Role of Investment Units 743
Return on Investment 744
ROI Equals Return on Sales Times Asset Turnover 744
Illustration of Evaluation Using Return on Investment 744
Use of Return on Investment 747
Strategic Issues in Using Return on Investment 751
Residual Income 753
Limitations of Residual Income 754
Economic Value Added 755
Using Average Total Assets 755
Part Two: Transfer Pricing 756
When Is Transfer Pricing Important? 756
Objectives of Transfer Pricing 757
International Transfer Pricing Objectives 75 7
Transfer Pricing Methods 758
Choosing the Right Transfer Pricing Method 758
International Tax Issues in Transfer Pricing 761
The Arm 's Length Standard 761
Advance Pricing Agreements 762
Summary 763
Key Terms 763
Comments on Cost Management in Action 763
Self Study Problems 764
Questions 764
Brief Exercises 764
Exercises 765
Problems 771
Solutions to Self Study Problems 782
PART SIX
ADVANCED TOPICS IN COST
MANAGEMENT 784
Chapter 19 Management Compensation, Business
Analysis, and Business Valuation 784
Part One: Management Compensation 784
Types of Management Compensation 785
Strategic Role and Objectives of Management
Compensation 786
Design the Compensation Plan for Existing Strategic
Conditions 786
Risk Aversion and Management Compensation 786
Ethical Issues 787
Objectives of Management Compensation 787
Bonus Plans 788
Bases for Bonus Compensation 788
Bonus Compensation Pools 790
Bonus Payment Options 790
Tax Planning and Financial Reporting 792
Management Compensation in Service Firms 793
Part Two: Business Analysis and Business
Valuation 794
Business Analysis 795
The Balanced Scorecard 795
Financial Ratio A nalysis 795
Business Valuation 798
The Discounted Cash Flow Method 798
Multiples Based Valuation 800
Enterprise Value 800
Contents xxiii
Summary 801
Key Terms 801
Comments on Cost Management in Action 801
Self Study Problem 802
Questions 802
Brief Exercises 803
Exercises 803
Problems 807
Solution to Self Study Problem 816
Chapter 20 Capital Budgeting 818
Strategy and the Capital Budgeting Process 819
Underlying Nature of Capital Expenditures 819
Organizational Strategy and the Nature of Capital
Investment Analysis 819
Effect of Capital Expenditures on Strategic Cost Drivers 820
Chapter Overview—Where Are We Headed? 821
The Role of Accounting in the Capital Budgeting
Process 821
Linkage to Master Budget 821
Linkage to the Balanced Scorecard (BSC) 821
Generation of Relevant Financial Data for Decision Making
Purposes 823
Conducting Post Audits 823
Identification of Relevant Cash Flow Data for Capital
Expenditure Analysis 824
Why Focus on Cash Flows? 824
Cash Flows—A Framework for Analysis 825
Sample Data Set: Mendoza Company—Equipment Replacement
Decision 825
Determining After Tax Cash Flows for Capital Investment
Analysis 827
Recap—Cash Flow Information for the Mendoza Companv
Investment Proposal 832
Discounted Cash Flow (DCF) Capital Budgeting
Decision Models 832
Types of Capital Budgeting Decision Models 832
DCF Models: Specifying the Discount Rate 832
Estimating the WACC 834
Net Present Value (NPV) Decision Model 836
Internal Rate of Return (IRR) Decision Model 837
Comparison of NPV and IRR Methods: Which to Use? 839
Sensitivity Analysis 839
What lfAnalyses 839
Scenario Analysis 841
Monte Carlo Simulation 841
Other Capital Budgeting Decision Models 842
Payback Period 842
Accounting (Book) Rate of Return 844
Behavioral Issues in Capital Budgeting 846
Common Behavioral Problems: Cost Escalation,
Incrementalism, and Uncertainty Intolerance 846
Goal Congruency Issues 847
Addressing the Goal Congruency Problem 847
xxiv Contents
Summary 848
Appendix A: DCF Models: Some Advanced
Considerations 848
Key Terms 851
Comments on Cost Management in Action 851
Self Study Problem 852
Questions 853
Brief Exercises 854
Exercises 855
Problems 858
Solution to Self Study Problem 866
Present Value Tables 870
Glossary 872
Index 882 |
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| ctrlnum | (OCoLC)69734455 (DE-599)BVBBV022523384 |
| dewey-full | 658.15/52 |
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| dewey-search | 658.15/52 |
| dewey-sort | 3658.15 252 |
| dewey-tens | 650 - Management and auxiliary services |
| discipline | Wirtschaftswissenschaften |
| discipline_str_mv | Wirtschaftswissenschaften |
| edition | 4. ed., internat. ed. |
| format | Book |
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| genre | 1\p (DE-588)4123623-3 Lehrbuch gnd-content |
| genre_facet | Lehrbuch |
| id | DE-604.BV022523384 |
| illustrated | Illustrated |
| index_date | 2024-07-02T18:04:03Z |
| indexdate | 2024-07-09T20:59:27Z |
| institution | BVB |
| isbn | 007110111X 9780071101110 |
| language | English |
| oai_aleph_id | oai:aleph.bib-bvb.de:BVB01-015730095 |
| oclc_num | 69734455 |
| open_access_boolean | |
| owner | DE-1049 DE-11 |
| owner_facet | DE-1049 DE-11 |
| physical | XXIV, 902 S. Ill., graph. Darst. |
| publishDate | 2008 |
| publishDateSearch | 2008 |
| publishDateSort | 2008 |
| publisher | McGraw-Hill Irwin |
| record_format | marc |
| spelling | Cost management a strategic emphasis Edward Blocher ... 4. ed., internat. ed. Boston, Mass. [u.a.] McGraw-Hill Irwin 2008 XXIV, 902 S. Ill., graph. Darst. txt rdacontent n rdamedia nc rdacarrier Contabilidad administrativa Contabilidad de costos Cost accounting Managerial accounting Cost accounting Problems, exercises, etc. Mangerial accounting Problems, exercises, etc. Management (DE-588)4037278-9 gnd rswk-swf Rechnungswesen (DE-588)4048732-5 gnd rswk-swf Finanzmanagement (DE-588)4139075-1 gnd rswk-swf Kostenmanagement (DE-588)4323274-7 gnd rswk-swf 1\p (DE-588)4123623-3 Lehrbuch gnd-content Kostenmanagement (DE-588)4323274-7 s Finanzmanagement (DE-588)4139075-1 s Rechnungswesen (DE-588)4048732-5 s Management (DE-588)4037278-9 s 2\p DE-604 DE-604 Blocher, Edward Sonstige oth http://digitool.hbz-nrw.de:1801/webclient/DeliveryManager?pid=1829850&custom_att_2=simple_viewer Cost management Inhaltsverzeichnis http://highered.mcgraw-hill.com/sites/0072818360/student_view0/ HBZ Datenaustausch application/pdf http://bvbr.bib-bvb.de:8991/F?func=service&doc_library=BVB01&local_base=BVB01&doc_number=015730095&sequence=000002&line_number=0001&func_code=DB_RECORDS&service_type=MEDIA Inhaltsverzeichnis 1\p cgwrk 20201028 DE-101 https://d-nb.info/provenance/plan#cgwrk 2\p cgwrk 20201028 DE-101 https://d-nb.info/provenance/plan#cgwrk |
| spellingShingle | Cost management a strategic emphasis Contabilidad administrativa Contabilidad de costos Cost accounting Managerial accounting Cost accounting Problems, exercises, etc. Mangerial accounting Problems, exercises, etc. Management (DE-588)4037278-9 gnd Rechnungswesen (DE-588)4048732-5 gnd Finanzmanagement (DE-588)4139075-1 gnd Kostenmanagement (DE-588)4323274-7 gnd |
| subject_GND | (DE-588)4037278-9 (DE-588)4048732-5 (DE-588)4139075-1 (DE-588)4323274-7 (DE-588)4123623-3 |
| title | Cost management a strategic emphasis |
| title_auth | Cost management a strategic emphasis |
| title_exact_search | Cost management a strategic emphasis |
| title_exact_search_txtP | Cost management a strategic emphasis |
| title_full | Cost management a strategic emphasis Edward Blocher ... |
| title_fullStr | Cost management a strategic emphasis Edward Blocher ... |
| title_full_unstemmed | Cost management a strategic emphasis Edward Blocher ... |
| title_short | Cost management |
| title_sort | cost management a strategic emphasis |
| title_sub | a strategic emphasis |
| topic | Contabilidad administrativa Contabilidad de costos Cost accounting Managerial accounting Cost accounting Problems, exercises, etc. Mangerial accounting Problems, exercises, etc. Management (DE-588)4037278-9 gnd Rechnungswesen (DE-588)4048732-5 gnd Finanzmanagement (DE-588)4139075-1 gnd Kostenmanagement (DE-588)4323274-7 gnd |
| topic_facet | Contabilidad administrativa Contabilidad de costos Cost accounting Managerial accounting Cost accounting Problems, exercises, etc. Mangerial accounting Problems, exercises, etc. Management Rechnungswesen Finanzmanagement Kostenmanagement Lehrbuch |
| url | http://digitool.hbz-nrw.de:1801/webclient/DeliveryManager?pid=1829850&custom_att_2=simple_viewer http://highered.mcgraw-hill.com/sites/0072818360/student_view0/ http://bvbr.bib-bvb.de:8991/F?func=service&doc_library=BVB01&local_base=BVB01&doc_number=015730095&sequence=000002&line_number=0001&func_code=DB_RECORDS&service_type=MEDIA |
| work_keys_str_mv | AT blocheredward costmanagementastrategicemphasis |
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