Managerial Accounting (6th Edition) – James Jiambalvo

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Download Managerial Accounting (6th Edition) – James Jiambalvo written by James Jiambalvo in PDF format. This book is under the category Accounting and bearing the isbn/isbn13 number 111915801X/9781119158011. You may reffer the table below for additional details of the book.

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Specifications

book-author

James Jiambalvo

publisher

Wiley; 6th edition

file-type

PDF

pages

544 pages

language

English

asin

B01AKSZA56

isbn10

111915801X

isbn13

9781119158011


Book Description

Identifying that most students will pursue careers as managers not accountants; Managerial Accounting; 6th edition (PDF) by James Jiambalvo emphasizes on the fundamental topics of managerial accounting; and assits college student make direction associations between techniques in the business world; and readers’ future careers using real cases and real managers’ comments on real company issues. Managerial Accounting; 6th edition helps students build decision making through incremental analysis and emphasizes the fact that you Get What You Measure throughout the program. It is made for a one-semester managerial accounting course at both the MBA and undergraduate levels.

NOTE: The product includes the ebook; Managerial Accounting; 6th edition in PDF. No access codes are included

Additional information

book-author

James Jiambalvo

publisher

Wiley; 6th edition

file-type

PDF

pages

544 pages

language

English

asin

B01AKSZA56

isbn10

111915801X

isbn13

9781119158011

Table of contents


Table of contents :
Cover
Title Page
Copyright Page
About the Author
Preface
Acknowledgments
Contents
1 MANAGERIAL ACCOUNTING IN THE INFORMATION AGE
GOAL OF MANAGERIAL ACCOUNTING
Planning
Budgets for Planning
Control
Performance Reports for Control
Decision Making
A Comparison of Managerial and Financial Accounting
Internal versus External Users
Need to Use GAAP
Detail of Information
Emphasis on Nonmonetary Information
Emphasis on the Future
Similarities between Financial and Managerial Accounting
COST TERMS USED IN DISCUSSING PLANNING, CONTROL, AND DECISION MAKING
Variable and Fixed Costs
Variable Costs
Fixed Costs
Sunk Costs
Opportunity Costs
Direct and Indirect Costs
Controllable and Noncontrollable Costs
TWO KEY IDEAS IN MANAGERIAL ACCOUNTING
Decision Making Relies on Incremental Analysis
THE INFORMATION AGE AND MANAGERIAL ACCOUNTING
Impact of Information Technology on Management of the Value Chain
Information Flows between Milano and Customers
Information Flows between Milano and Suppliers
Using Information Technology to Gain Internal Efficiencies
Software Systems That Impact Value Chain Management
Enterprise Resource Planning Systems
Supply Chain Management Systems
Customer Relationship Management Systems
ETHICAL CONSIDERATIONS IN MANAGERIAL DECISION MAKING
Ethical and Unethical Behavior
Sarbanes-Oxley Act
A Framework for Ethical Decision Making
IMA Statement of Ethical Professional Practice
THE CONTROLLER AS THE TOP MANAGEMENT ACCOUNTANT
SUMMARY OF LEARNING OBJECTIVES
APPENDIX IMA STATEMENT OF ETHICAL PROFESSIONAL PRACTICE2
Principles
Standards
Resolution of Ethical Conflict
LINK TO PRACTICE:
Long Supply Chains Create Opportunity Costs
Problems Related to the Wrong Performance Measures
Casinos Manage with Data from CRM Systems
Feds Investigating Walmart Over Bribery in Mexico
Are the Procurement Practices of the Hershey Company Ethical?
Review Problems
Key Terms
Self-Assessment
Questions
Exercises
Problems
Cases
2 JOB-ORDER COSTING FOR MANUFACTURING AND SERVICE COMPANIES
COST CLASSIFICATIONS FOR MANUFACTURING FIRMS
Manufacturing Costs
Direct Material
Direct Labor
Manufacturing Overhead
Nonmanufacturing Costs
Selling Costs
General and Administrative Costs
Product and Period Costs
Product Costs
Period Costs
PRODUCT COST INFORMATION IN FINANCIAL REPORTING AND DECISION MAKING
BALANCE SHEET PRESENTATION OF PRODUCT COSTS
FLOW OF PRODUCT COSTS IN ACCOUNTS
INCOME STATEMENT PRESENTATION OF PRODUCT COSTS
Cost of Goods Manufactured
Cost of Goods Sold
TYPES OF COSTING SYSTEMS
OVERVIEW OF JOB COSTS AND FINANCIAL STATEMENT ACCOUNTS
JOB-ORDER COSTING SYSTEM
Direct Material Cost
Direct Labor Cost
Journal Entry to Record Direct Labor
Manufacturing Overhead
Journal Entries to Record Manufacturing Overhead
Assigning Costs to Jobs: A Summary
EASTLAKE REVISITED: USING JOB COST INFORMATION
RELATION BETWEEN THE COSTS OF JOBS AND THE FLOW OF COSTS IN WORK IN PROCESS, FINISHED GOODS, AND COST OF GOODS SOLD
ALLOCATING OVERHEAD TO JOBS: A CLOSER LOOK
Overhead Allocation Rates
The Overhead Allocation Base
Activity-Based Costing (ABC) and Multiple Overhead Rates
PREDETERMINED OVERHEAD RATES
Eliminating Overapplied or Underapplied Overhead
JOB-ORDER COSTING FOR SERVICE COMPANIES
Comprehensive Example
MODERN MANUFACTURING PRACTICES AND PRODUCT COSTING SYSTEMS
Just-in-Time (JIT) Production
Lean Manufacturing
Computer-Controlled Manufacturing
Total Quality Management
SUMMARY OF LEARNING OBJECTIVES
LINK TO PRACTICE:
Product and Period Costs at SpaceX
Examples of Companies Using Job-Order and Process Costing Systems
Lean Principles Are Not Just for Manufacturing Firms
Just-in-Time or Just-in-Case
Can There Be Too Much Emphasis on Quality?
Review Problems
Key Terms
Self-Assessment
Questions
Exercises
Problems
Cases
3 PROCESS COSTING
DIFFERENCE BETWEEN JOB-ORDER AND PROCESS COSTING SYSTEMS
PRODUCT AND COST FLOWS
Product Flows through Departments
Cost Flows through Accounts
Direct Material
Direct Labor
Manufacturing Overhead
Transferred-in Cost
CALCULATING UNIT COST
Equivalent Units
Cost per Equivalent Unit
CALCULATING AND APPLYING COST PER EQUIVALENT UNIT: MIXING DEPARTMENT EXAMPLE
Cost Transferred Out
Ending Work in Process
PRODUCTION COST REPORT
Reconciliation of Units
Reconciliation of Costs
BASIC STEPS IN PROCESS COSTING: A SUMMARY
KENT CHEMICAL REVISITED: ANSWERING STACY’S QUESTION
DEALING WITH TRANSFERRED-IN COST: PACKAGING DEPARTMENT EXAMPLE
PROCESS COSTING AND INCREMENTAL ANALYSIS
“YOU GET WHAT YOU MEASURE!” AND MANUFACTURING PROCESSES
SUMMARY OF LEARNING OBJECTIVES
LINK TO PRACTICE:
What Type of Costing System Is Used by ExxonMobil Corporation for the Product Mobil 1?
Virtual Plant Tour for Company Using Process Costing
Review Problems
Key Terms
Self-Assessment
Questions
Exercises
Problems
Cases
4 COST-VOLUME-PROFIT ANALYSIS
COMMON COST BEHAVIOR PATTERNS
Variable Costs
Fixed Costs
Discretionary versus Committed Fixed Costs
Mixed Costs
Step Costs
Relevant Range
COST ESTIMATION METHODS
Account Analysis
Scattergraphs
High-Low Method
Regression Analysis
The Relevant Range and Cost Estimation
COST-VOLUME-PROFIT ANALYSIS
The Profit Equation
Break-Even Point
Margin of Safety,
Contribution Margin
Units Needed to Achieve Profit Target
Contribution Margin Ratio
Dollar Sales Needed to Achieve Profit Target
“What If” Analysis
Change in Fixed and Variable Costs
Change in Selling Price
MULTIPRODUCT ANALYSIS
Contribution Margin Approach
Contribution Margin Ratio Approach
ASSUMPTIONS IN CVP ANALYSIS
CODECONNECT EXAMPLE REVISITED: ANSWERING MARY’S QUESTIONS
Planning
Control
Decision Making
OPERATING LEVERAGE
CONSTRAINTS
SUMMARY OF LEARNING OBJECTIVES
APPENDIX USING REGRESSION IN EXCEL TO ESTIMATE FIXED AND VARIABLE COSTS
Setting Up the Spreadsheet
Interpreting the Output of the Regression Program
LINK TO PRACTICE:
Using Less Water but Paying Higher Rates!
Breaking Even on a Golf Course Is Harder than Making Par
Deciding to Use the Contribution Margin per Unit or the Contribution Margin Ratio
Which Firm Has the Higher Contribution Margin Ratio?
Impact of Operating Leverage at Vulcan Materials
Fixed Costs Too High—Make Them Variable!
Review Problems
Key Terms
Self-Assessment
Questions
Exercises
Problems
Cases
5 VARIABLE COSTING
FULL (ABSORPTION) AND VARIABLE COSTING
Variable Costing Income Statement
EFFECTS OF PRODUCTION ON INCOME FOR FULL VERSUS VARIABLE COSTING: THE CLAUSENTUBE EXAMPLE
Quantity Produced Equals Quantity Sold
Quantity Produced Is Greater Than Quantity Sold
Quantity Produced Is Less Than Quantity Sold
Explaining What Happened at ClausenTube
Impact of JIT on the Income Effects of Full versus Variable Costing
BENEFITS OF VARIABLE COSTING FOR INTERNAL REPORTING
Variable Costing Facilitates CVP Analysis
VARIABLE COSTING LIMITS MANAGEMENT OF EARNINGS VIA PRODUCTION VOLUME
SUMMARY OF LEARNING OBJECTIVES
LINK TO PRACTICE:
German Companies More Likely to Use Variable Costing
Overproduction to Avoid Showing a Loss
Cut in Production at John Deere Likely to Hurt Profit Margin
Review Problems
Key Terms
Self-Assessment
Questions
Exercises
Problems
Cases
6 COST ALLOCATION AND ACTIVITY-BASED COSTING
PURPOSES OF COST ALLOCATION
To Provide Information for Decision Making
To Reduce Frivolous Use of Common Resources
To Encourage Evaluation of Services
To Provide “Full Cost” Information
PROCESS OF COST ALLOCATION
Determining the Cost Objective
Forming Cost Pools
Selecting an Allocation Base
ALLOCATING SERVICE DEPARTMENT COSTS
Direct Method of Allocating Service Department Costs
Allocating Budgeted and Actual Service Department Costs
PROBLEMS WITH COST ALLOCATION
Responsibility Accounting and Controllable Costs
Arbitrary Allocations
Unitized Fixed Costs and Lump-Sum Allocations
The Problem of Too Few Cost Pools
Using Only Volume-Related Allocation Bases
ACTIVITY-BASED COSTING
The Problem of Using Only Measures of Production Volume to Allocate Overhead
The ABC Approach
Hierarchy of Activities
Relating Cost Pools to Products Using Cost Drivers
The ABC Approach at McMaster Screen Technologies: A Comprehensive Example
McMaster’s Costs under the Traditional Approach
McMaster’s Costs under the ABC Approach
Pros and Cons of ABC
Benefits
Limitations
ACTIVITY-BASED MANAGEMENT
REMEMBER—YOU GET WHAT YOU MEASURE!
SUMMARY OF LEARNING OBJECTIVES
APPENDIX ACTIVITY-BASED MANAGEMENT
Step 1: Determine Major Activities
Step 2: Identify Resources Used by Each Activity
Step 3: Evaluate the Performance of the Activities
Step 4: Identify Ways to Improve the Efficiency and/or Effectiveness of the Activities
CONCLUSION
LINK TO PRACTICE:
Cost-plus Contracts Create Incentive to Misallocate Costs
Basis for Allocating Costs to Federal Grants and Contracts
Disputes over Allocations not Limited to the Private Sector
Avoiding a Disastrous Decision by Using ABC
Banks and Other Service Companies Use ABM
ABC Points to Process Improvement and Cost Control
Review Problems
Key Terms
Self-Assessment
Questions
Exercises
Problems
Cases
7 THE USE OF COST INFORMATION IN MANAGEMENT DECISION MAKING
INCREMENTAL ANALYSIS
When Your Boss Asks, “What Does This Product (Service) Cost?” You Should Say, “Why Do You Want to Know?”
ANALYSIS OF DECISIONS FACED BY MANAGERS
Additional Processing Decision
Make-or-Buy Decisions: The General Refrigeration Example
Dropping a Product Line
Beware of the Cost Allocation Death Spiral!
Summary of Incremental, Avoidable, Sunk, and Opportunity Costs
DECISIONS INVOLVING JOINT COSTS
Allocation of Joint Costs
Additional Processing Decisions and Joint Costs
QUALITATIVE CONSIDERATIONS IN DECISION ANALYSIS
SUMMARY OF LEARNING OBJECTIVES
APPENDIX THE THEORY OF CONSTRAINTS
THE FIVE-STEP PROCESS OF TOC
Step 1: Identify the Binding Constraint
Step 2: Optimize Use of the Constraint
Step 3: Subordinate Everything Else to the Constraint
Step 4: Break the Constraint
Step 5: Identify a New Binding Constraint
IMPLICATIONS OF TOC FOR INSPECTIONS, BATCH SIZES, AND ACROSS-THE-BOARD CUTS
LINK TO PRACTICE:
Sell Partially Completed Superyacht?
Boeing’s Global Outsourcing Strategy Blamed for 3-Year Delay in 787
PACCAR Decides to Make as Well as Buy!
Indian Wireless Company Outsources to U.S. and European Firms!
Spike TV Drops Impact Wrestling
Ronald H. Coase’s Contribution to Incremental Analysis
The Sunk Cost Effect
Qualitative Considerations in Outsourcing to China
Review Problems
Key Terms
Self-Assessment
Questions
Exercises
Problems
Cases
8 PRICING DECISIONS, CUSTOMER PROFITABILITY ANALYSIS, AND ACTIVITY-BASED PRICING
THE PROFIT-MAXIMIZING PRICE
PRICING SPECIAL ORDERS
COST-PLUS PRICING
TARGET COSTING
ANALYZING CUSTOMER PROFITABILITY: REVISITING THE PRICED RIGHT OFFICE SUPPLIES CASE
CUSTOMER PROFITABILITY AND PERFORMANCE MEASURES
ACTIVITY-BASED PRICING
SUMMARY OF LEARNING OBJECTIVES
LINK TO PRACTICE:
Pricing Strategy: Apple’s Approach to Pricing
Pricing Power More Important Than Management
Pricing Treasure Hunt Items at Costco
Insull’s Most Radical Innovation Wasn’t Technology—It Was Pricing!
Target Costing Analyst Position at Whirlpool
How to Fix Unprofitable Customers
Sprint Drops Customers for Excessive Use of Customer Service
Review Problems
Key Terms
Self-Assessment
Questions
Exercises
Problems
Cases
9 CAPITAL BUDGETING AND OTHER LONG-RUN DECISIONS
CAPITAL BUDGETING DECISIONS
EVALUATING INVESTMENT OPPORTUNITIES: TIME VALUE OF MONEY APPROACHES
Basic Time Value of Money Calculations
The Net Present Value Method
Steps in the NPV Method
An Example of the NPV Approach
Comparing Alternatives with NPV
The Internal Rate of Return Method
The Internal Rate of Return with Unequal Cash Flows
Summary of Net Present Value and Internal Rate of Return Methods
CONSIDERING “SOFT” BENEFITS IN INVESTMENT DECISIONS
Calculating the Value of Soft Benefits Required to Make an Investment Acceptable
ESTIMATING THE REQUIRED RATE OF RETURN
ADDITIONAL CASH FLOW CONSIDERATIONS
Cash Flows, Taxes, and the Depreciation Tax Shield
Adjusting Cash Flows for Inflation
OTHER LONG-RUN DECISIONS
SIMPLIFIED APPROACHES TO CAPITAL BUDGETING
Payback Period Method
Accounting Rate of Return
The Accounting Rate of Return Is Not a Reliable Estimate of the Internal Rate of Return
CONFLICT BETWEEN PERFORMANCE EVAL UATION AND CAPITAL BUDGETING
WILSON AIR EXAMPLE REVISITED
SUMMARY OF LEARNING OBJECTIVES
APPENDIX A USING EXCEL® TO CALCULATE NPV AND IRR
LINK TO PRACTICE:
Royal Caribbean International Invests $1.4 Billion in Cruise Ship
NPV of Livengood Gold Mine Depends on Estimates
College Education Yields 15% Return
Use of NPV and IRR by CFOs
Soft Benefits Related to Investing in ERP System
Cost of Capital for Various Business Sectors
Depreciation Tax Shield at Delta Air Lines
Payback on Home Solar Power,
Review Problems
Key Terms
Self-Assessment
Questions
Exercises
Problems
Cases
10 BUDGETARY PLANNING AND CONTROL
USE OF BUDGETS IN PLANNING AND CONTROL
Planning
Control
DEVELOPING THE BUDGET
Budget Time Period
Zero-Based Budgeting
THE MASTER BUDGET
Sales Budget
Production Budget
Direct Material Purchases Budget
Direct Labor Budget
Manufacturing Overhead Budget
Selling and Administrative Expense Budget
Budgeted Income Statement
Capital Acquisitions Budget
Cash Budget
Budgeted Balance Sheet
USE OF COMPUTERS IN THE BUDGET PLANNING PROCESS
BUDGETARY CONTROL
Budgets as a Standard for Evaluation
Static and Flexible Budgets
INVESTIGATING BUDGET VARIANCES
CONFLICT IN PLANNING AND CONTROL USES OF BUDGETS
Why Budget-Based Compensation Can Lead to Budget Padding and Income Shifting
EVALUATION, MEASUREMENT, AND MANAGEMENT BEHAVIOR
THE PRESTON JOYSTICK CASE REVISITED
SUMMARY OF LEARNING OBJECTIVES
LINK TO PRACTICE:
Problems with Five-Year Budgets
People Problems in Budgeting
Budget Process in Great Britain
Address Cash Flow Uncertainty with a Revolving Loan
Spreadsheets for Budgeting
Using Rolling Budgets to Deal with Changes in Economic Conditions
Ratcheting and the Ability to Achieve Budget Targets
Review Problems
Key Terms
Self-Assessment
Questions
Exercises
Problems
Cases
11 STANDARD COSTS AND VARIANCE ANALYSIS
STANDARD COSTS
Standard Costs and Budgets
Development of Standard Costs
Ideal versus Attainable Standards
A GENERAL APPROACH TO VARIANCE ANALYSIS
MATERIAL VARIANCES
Material Price Variance
Material Quantity Variance
DIRECT LABOR VARIANCES
Labor Rate Variance
Labor Efficiency Variance
OVERHEAD VARIANCES
Controllable Overhead Variance
Detailed Analysis of the Controllable Overhead Variance
Overhead Volume Variance
Computing the Overhead Volume Variance
Interpreting the Overhead Volume Variance
Calculating the Financial Impact of Operating at More or Less than Planned Capacity
TEST YOUR KNOWLEDGE: COMPREHENSIVE EXAMPLE
Material Variances
Labor Variances
Overhead Variances
INVESTIGATION OF STANDARD COST VARIANCES
Management by Exception
Favorable Variances May Be Unfavorable
Can Process Improvements Lead to Unfavorable Variances?
Beware: Evaluation in Terms of Variances Can Lead to Excess Production
RESPONSIBILITY ACCOUNTING AND VARIANCES
SUMMARY OF LEARNING OBJECTIVES
APPENDIX RECORDING STANDARD COSTS IN ACCOUNTS
Recording Material Costs
Recording Labor Cost
Recording Manufacturing Overhead
Recording Finished Goods
Recording Cost of Goods Sold
Closing Variance Accounts
LINK TO PRACTICE:
Starbucks Uses Standard Costs
How Often Do Companies Update Standards?
Standard Costing—In the Beginning
You Get What You Measure!
Review Problems
Key Terms
Self-Assessment
Questions
Exercises
Problems
Cases
12 DECENTRALIZATION AND PERFORMANCE EVALUATION
WHY FIRMS DECENTRALIZE
Advantages of Decentralization
Disadvantages of Decentralization
WHY COMPANIES EVALUATE THE PERFORMANCE OF SUBUNITS AND SUBUNIT MANAGERS
Evaluating Subunits
Evaluating Subunit Managers
Responsibility Accounting and Performance Evaluation
COST CENTERS, PROFIT CENTERS, AND INVESTMENT CENTERS
Cost Centers
Profit Centers
Investment Centers
EVALUATING INVESTMENT CENTERS WITH ROI
Measuring Income and Invested Capital When Calculating ROI
Problems with Using ROI
Problems of Overinvestment and Underinvestment: You Get What You Measure!
Evaluation in Terms of Profit Can Lead to Overinvestment
Evaluation in Terms of ROI Can Lead to Underinvestment
EVALUATION USING ECONOMIC VALUE ADDED (EVA )
Residual Income (RI)
Revisiting the Situation at Action Industries
Solving the Overinvestment and Underinvestment Problems
Economic Value Added (EVA )
EVA Example
USING A BALANCED SCORECARD TO EVALUATE PERFORMANCE
Tying the Balanced Scorecard Measures to the Strategy for Success
Scenario 1. Learning and Growth Dimension
Scenario 2. Internal Process Dimension
Scenario 3. Customer Dimension
Scenario 4. Financial Dimension
How Balance Is Achieved in a Balanced Scorecard
DEVELOPING A STRATEGY MAP FOR A BALANCED SCORECARD
KEYS TO A SUCCESSFUL BALANCED SCORECARD: TARGETS, INITIATIVES, RESPONSIBILITY, FUNDING, TOP MANAGEMENT SUPPORT
Targets
Initiatives
Responsibility
Funding
Top Management Support
SUMMARY OF LEARNING OBJECTIVES
APPENDIX TRANSFER PRICING
MARKET PRICE AS THE TRANSFER PRICE
MARKET PRICE AND OPPORTUNITY COST
VARIABLE COST AS THE TRANSFER PRICE
FULL COST PLUS PROFIT AS THE TRANSFER PRICE
NEGOTIATED TRANSFER PRICES
TRANSFER PRICING AND INCOME TAXES IN AN INTERNATIONAL CONTEXT
LINK TO PRACTICE:
Subunits at Nordstrom
The Focus on ROI and Shareholder Value Is Not the Same in France, Germany, and Japan as It Is in the United States and Great Britain
Did Boeing’s Focus on ROI Lead to Excessive Outsourcing?
Companies That Have Used EVA
Deere & Company Uses SVA Rather Than EVA
Focus on EVA Affects Key Decisions across an Organization
Use of EVA at Whole Foods
Brigham and Women’s Hospital Receives Award for Its Balanced Scorecard
Transfer Pricing at Starbucks
Review Problems
Key Terms
Self-Assessment
Questions
Exercises
Problems
Cases
EULA

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