Biz/ed estore - Management Accounting for Business

Biz/ed estore ebook chapter abstracts

Management Accounting for Business 3e, Drury

Management Accounting for Business 3e

Colin Drury, University of Huddersfield
ISBN-13: 9781844801527
ISBN: 1844801527

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Management Accounting for Business provides a thorough introduction to the theory and practice of management accounting.Accessible and student friendly, the text excludes the technical and more advanced content that is required by specialist accounting students but offers the general business student on an undergraduate, postgraduate or post-experience course a firm foundation in management accounting. It is the ideal introductory text for all non-accounting students studying management accounting on a modular one or two-semester undergraduate degree course, or as part of an MBA course.

Chapter Abstracts

  • Ch. 1 Introduction to management accounting 
    Chapter One covers how to distinguish between management accounting and financial accounting; the elements involved in the decision-making, planning and control process; the major objective of commercial organizations seeking to maximize the present value of future cash flows; the factors that have influenced the changes in the competitive environment outline and the key success factors that directly affect customer satisfaction and the functions of a management accounting system
  • Ch. 2 An introduction to cost terms and concepts 
    Chapter Two covers the meaning of different cost terms; how to define and illustrate a cost object; the meaning of each of the key terms listed at the end of this chapter; the short term costs and revenues not relevant for decision-making; job costing and process costing and the three purposes for which cost information is required
  • Ch. 3 Cost volume profit analysis 
    Chapter Three covers the differences between the accountant's and the economist's model of cost-volume-profit analysis; the use of linear cost and revenue functions in the accountant's model; the mathematical approach to answer questions similar to those listed in Example 3.1; break-even, contribution and profit-volume graphs; the assumptions on which cost-volume-profit analysis is based amd cost-volume-profit analysis in a multi-product setting
  • Ch. 4 Measuring relevant costs and revenues for decision-making 
    Chapter Four covers relevant and irrelevant costs and revenues; the importance of qualitative factors; relevant and irrelevant costs and revenues for the five decision-making problems described; the key concept that should be applied for presenting information for product-mix decisions when capacity constraints apply; the book value of equipment's irrelevance when making equipment replacement decision and the opportunity cost concept
  • Ch. 5 Cost assignment 
    Chapter Five covers the cause-and-effect and arbitrary cost allocations, different cost information required for different purposes, cost systems in terms of level of sophistication, the factors influencing the choice of an optimal cost system, departmental overhead rates in preference to a single blanket overhead rate, an overhead analysis sheet and cost centre allocation rates, budgeted overhead rates in preference to actual overhead rates and the accounting treatment of the under/over recovery of overheads
  • Ch. 6 Activity-based costing 
    Chapter Six covers cost the accumulation system for generating relevant cost information for decision-making, the differences between activity-based and traditional costing systems, why traditional costing systems can provide misleading information for decision-making, how to compute product costs using an activity-based costing system, the four stages involved in designing ABC systems, the ABC cost hierarchy, the ABC profitability analysis hierarchy and the ABC resource consumption model
  • Ch. 7 Pricing decisions and profitability analysis 
    Chapter Seven covers cost the accumulation system for generating relevant cost information for decision-making, the differences between activity-based and traditional costing systems, why traditional costing systems can provide misleading information for decision-making, how to compute product costs using an activity-based costing system, the four stages involved in designing ABC systems, the ABC cost hierarchy, the ABC profitability analysis hierarchy and the ABC resource consumption model
  • Ch. 8 Decision-making under conditions of risk and uncertainty 
    Chapter Eight covers the meaning of expected values, the meaning of the terms standard deviation and coefficient of variation as measures of risk and outline limitations; a decision tree with a range of alternatives and possible outcomes; the value of perfect and imperfect information, the maximin, maximax and regret criteria and the implications of portfolio analysis
  • Ch. 9 Capital investment decisions 
    Chapter Nine covers the opportunity cost of an investment, how to dustinguish between compounding and discounting, the concepts of net present value (NPV), internal rate of return (IRR), payback method and accounting rate of return (ARR), NPV, IRR, the payback period and ARR, the superiority of NPV over the IRR, the limitations of payback and ARR, why the payback and ARR methods are widely used in practice, the effect of performance measurement on capital investment decisions and the incremental taxation payments arising from a proposed investment
  • Ch. 10 The budgeting process 
    Chapter Ten covers how budgeting fits into the overall planning and control framework, the six different purposes of budgeting;, the various stages in the budget process, functional and master budgets, the use of computer-based financial models for budgeting, the limitations of incremental budgeting, activity-based budgeting and zero-base budgeting (ZBB)
  • Ch. 11 Management control systems 
    Chapter Eleven covers the three different types of controls used in organizations, a cybernetic control system, how to distinguish between feedback and feed-forward controls, the potential harmful side-effects of results controls, the four different types of responsibility centres, the different elements of management accounting control systems, the controllability principle and the methods of implementing it, the different approaches that can be used to determine financial performance targets and discuss the impact of their level of difficulty on motivation and performance, the influence of participation in the budgeting process and distinguish between the three different styles of evaluating performance and identify the circumstances when a particular style is most appropriate
  • Ch. 12 Standard costing and variance analysis 
    Chapter Twelve covers how a standard costing system operates, how standard costs are set, the meaning of standard hours produced, basic, ideal and currently attainable standards, the purposes of a standard costing system, labour, material, overhead and sales margin variances and actual profit with budgeted profit, the causes of labour, material, overhead and sales margin variances and departmental performance report
  • Ch. 13 Divisional financial performance measures 
    Chapter Thirteen covers how to distinguish between functional and divisionalized organizational structures, why it is preferable to distinguish between managerial and economic performance, the factors that should be considered in designing financial performance measures for evaluating divisional managers, the meaning of return on investment, residual income and economic value added, economic value added and the approaches that can be used to reduce the dysfunctional consequences of short-term financial measures
  • Ch. 14 Transfer pricing in divisionalized companies 
    Chapter Fourteen covers the different purposes of a transfer pricing system, the five different transfer pricing methods, why the correct transfer price is the external market price when there is a perfectly competitive market for the intermediate product, why cost-plus transfer prices will not result in the optimum output being achieved, the two methods of transfer pricing that have been advocated to resolve the conflicts between the decision-making and performance evaluation objectives, the additional factors that must be considered when setting transfer prices for multinational transactions and how optimum transfer prices can be determined when there is no external market or an imperfect external market for the intermediate product
  • Ch. 15 Cost management 
    Chapter Fifteen covers how to distinguish between the features of a traditional management accounting control system and cost management, life-cycle costing and describe the typical pattern of cost commitment and cost incurrence during the three stages of a product's life cycle, the target costing approach to cost management, tear-down analysis, value engineering and functional analysis, how to distinguish between target costing and kaizen costing, activity-based cost management, how to distinguish between value added and non-value added activities, the purpose of a cost of quality report, how value chain analysis can be used to increase customer satisfaction and manage costs more effectively, the role of benchmarking within the cost management framework and the main features of a just-in-time philosophy
  • Ch. 16 Strategic management accounting 
    Chapter Sixteen covers the different elements of strategic management accounting, the balanced scorecard, each of the four perspectives of the balanced scorecard, illustrations of performance measures for each of the four perspectives and the distinguishing characteristics of service organizations that influence performance measurement
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