Cover -- Title -- Copyright -- About the Authors -- Dedication -- Step into the Real World -- What's New in the Seventh Edition? -- Connect Page -- Acknowledgments -- Brief Contents -- Contents -- Half Title -- 1 Cost Accounting: Information for Decision Making -- Business Application: Understanding Costs in a Small Business -- Value Creation in Organizations -- Why Start with Value Creation? -- Value Chain -- Supply Chain and Distribution Chain -- Business Application: Choosing Where to Operate in the Supply Chain -- Using Cost Information to Increase Value -- Accounting and the Value Chain -- Accounting Systems -- Financial Accounting -- Cost Accounting -- Cost Accounting, GAAP, and IFRS -- Customers of Cost Accounting -- Key Financial Players in the Organization -- Our Framework for Assessing Cost Accounting Systems -- The Manager's Job Is to Make Decisions -- Decision Making Requires Information -- Finding and Eliminating Activities That Don't Add Value -- Identifying Strategic Opportunities Using Cost Analysis -- Owners Use Cost Information to Evaluate Managers -- Cost Data for Managerial Decisions -- Costs for Decision Making -- Business Application: Reducing Costs by Making Small Changes -- Costs for Control and Evaluation -- Different Data for Different Decisions -- Trends in Cost Accounting and Business Decisions -- Cost Accounting in the Value Chain -- Creating Value in the Organization -- Enterprise Resource Planning -- Critical Thinking and Data Analytics -- Applying the Framework -- Choices: Ethical Issues for Accountants -- What Makes Ethics So Important? -- IMA Code of Ethics -- The Sarbanes-Oxley Act of 2002 and Ethics -- Business Application: Accounting Decisions at Tesco: Choices and Consequences -- Cost Accounting and Other Business Disciplines -- Key Takeaways -- Summary -- Key Terms -- Review Questions.

Critical Analysis and Discussion Questions -- Exercises -- Problems -- Integrative Cases -- Solutions to Self-Study Questions -- 2 Cost Concepts and Behavior -- What Is a Cost? -- Cost versus Expenses -- Presentation of Costs in Financial Statements -- Service Organizations -- Retail and Wholesale Companies -- Business Application: Components of Cost of Goods Sold for a Retailer -- Manufacturing Companies -- Direct and Indirect Manufacturing (Product) Costs -- Prime Costs and Conversion Costs -- Nonmanufacturing (Period) Costs -- Cost Allocation -- Direct versus Indirect Costs -- Business Application: Indirect Costs and Allocating Costs to Contracts -- Details of Manufacturing Cost Flows -- How Costs Flow through the Statements -- Income Statements -- Cost of Goods Manufactured and Sold -- Direct Materials -- Work in Process -- Finished Goods Inventory -- Cost of Goods Manufactured and Sold Statement -- Cost Behavior -- Fixed versus Variable Costs -- Components of Product Costs -- Unit Fixed Costs Can Be Misleading for Decision Making -- Business Application: The Importance of Gross Margin -- How to Make Cost Information More Useful for Managers -- Gross Margin versus Contribution Margin Income Statements -- Developing Financial Statements for Decision Making -- Key Takeaways -- Summary -- Key Terms -- Review Questions -- Critical Analysis and Discussion Questions -- Exercises -- Problems -- Integrative Case -- Solutions to Self-Study Questions -- 3 Fundamentals of Cost-Volume-Profit Analysis -- Cost-Volume-Profit Analysis -- Business Application: How "Big Oil" Uses Break-Even Analysis -- Profit Equation -- CVP Example -- Graphic Presentation -- Profit-Volume Model -- Use of CVP to Analyze the Effect of Different Cost Structures -- Business Application: Operating Leverage as a Framework to Describe a Business Model -- Margin of Safety.

CVP Analysis with Spreadsheets -- Extensions of the CVP Model -- Income Taxes -- Multiproduct CVP Analysis -- Alternative Cost Structures -- Assumptions and Limitations of CVP Analysis -- Data Analytics and CVP Analysis -- Key Takeaways -- Summary -- Key Terms -- Review Questions -- Critical Analysis and Discussion Questions -- Exercises -- Problems -- Integrative Case -- Solutions to Self-Study Questions -- 4 Fundamentals of Cost Analysis for Decision Making -- Business Application: Outsourcing and the Effect of Corporate Culture -- Differential Analysis -- Differential Costs versus Total Costs -- Differential Analysis and Pricing Decisions -- Short-Run versus Long-Run Pricing Decisions -- Short-Run Pricing Decisions: Special Orders -- Long-Run Pricing Decisions -- Long-Run versus Short-Run Pricing: Is There a Difference? -- Cost Analysis for Pricing -- Legal Issues Relating to Costs and Sales Prices -- Predatory Pricing -- Dumping -- Price Discrimination -- Peak-Load Pricing -- Price-Fixing -- Use of Differential Analysis for Production Decisions -- Make-It or Buy-It Decisions -- Make-or-Buy Decisions Involving Differential Fixed Costs -- Opportunity Costs of Making -- Business Application: Insourcing -- Decision to Add or Drop a Product Line or Close a Business Unit -- Product Choice Decisions -- The Theory of Constraints -- Key Takeaways -- Summary -- Key Terms -- Review Questions -- Critical Analysis and Discussion Questions -- Exercises -- Problems -- Integrative Cases -- Solutions to Self-Study Questions -- 5 Cost Estimation -- Why Estimate Costs? -- Business Application: Data Analytics for Managing Operations and Forecasting Revenue -- Basic Cost Behavior Patterns -- What Methods Are Used to Estimate Cost Behavior? -- Engineering Method -- Business Application: Engineering Analysis and the Construction of Healthcare Projects.

Account Analysis Method -- Statistical Cost Estimation -- Multiple Regression -- Practical Implementation Problems -- Learning Phenomenon -- Business Application: The Importance of Learning and Reduced Costs -- Applications -- How Is an Estimation Method Chosen? -- Data Problems -- Effect of Different Methods on Cost Estimates -- Key Takeaways -- Summary -- Key Terms -- Appendix A: Regression Analysis Using Microsoft Excel® -- Appendix B: Learning Curves -- Review Questions -- Critical Analysis and Discussion Questions -- Exercises -- Problems -- Integrative Cases -- Solutions to Self-Study Questions -- 6 Fundamentals of Product and Service Costing -- Cost Management Systems -- Reasons to Calculate Product or Service Costs -- Business Application: Who's Responsible for These Costs? -- Cost Allocation and Product Costing -- Cost Flow Diagram -- Fundamental Themes Underlying the Design of Cost Systems for Managerial Purposes -- Costing in a Single-Product, Continuous Process Industry -- Basic Cost Flow Model -- Costing with No Work-in-Process Inventories -- Costing with Ending Work-in-Process Inventories -- Costing in a Multiple-Product, Discrete Process Industry -- Predetermined Overhead Rates -- Product Costing of Multiple Products -- Choice of the Allocation Base for Predetermined Overhead Rate -- Choosing among Possible Allocation Bases -- Multiple Allocation Bases and Two-Stage Systems -- Choice of Allocation Bases -- Different Companies, Different Production and Costing Systems -- Operations Costing: An Illustration -- Key Takeaways -- Summary -- Key Terms -- Review Questions -- Critical Analysis and Discussion Questions -- Exercises -- Problems -- Integrative Cases -- Solutions to Self-Study Questions -- 7 Job Costing -- Defining a Job -- Using Accounting Records in a Job Shop -- Computing the Cost of a Job -- Production Process at Gupta Designs.

Records of Costs at Gupta Designs -- How Manufacturing Overhead Costs Are Recorded at Gupta Designs -- The Job Cost Sheet -- Over- and Underapplied Overhead -- An Alternative Method of Recording and Applying Manufacturing Overhead -- Multiple Allocation Bases: The Two-Stage Approach -- Summary of Steps in a Job Costing System -- Using Job Costing in Service Organizations -- Ethical Issues and Job Costing -- Misstating the Stage of Completion -- Charging Costs to the Wrong Jobs -- Business Application: Cost Allocation and Government Contracts -- Misrepresenting the Cost of Jobs -- Managing Projects -- Business Application: Fraudulent Reporting of Project Completion to Improve Financial Performance -- Key Takeaways -- Summary -- Key Terms -- Review Questions -- Critical Analysis and Discussion Questions -- Exercises -- Problems -- Integrative Cases -- Solutions to Self-Study Questions -- 8 Process Costing -- Determining Equivalent Units -- Using Product Costing in a Process Industry -- Step 1: Measure the Physical Flow of Resources -- Step 2: Compute the Equivalent Units of Production -- Business Application: Overstating Equivalent Units to Commit Fraud -- Step 3: Identify the Product Costs for Which to Account -- Required: An Assumption about Costs and the Work-in-Process Inventory -- Step 4: Compute the Costs per Equivalent Unit: Weighted Average -- Step 5: Assign Product Cost to Batches of Work: Weighted-Average Process Costing -- Reporting This Information to Managers: The Production Cost Report -- Sections 1 and 2: Managing the Physical Flow of Units -- Sections 3, 4, and 5: Managing Costs -- Assigning Costs Using First-In, First-Out (FIFO) Process Costing -- Step 1: Measure the Physical Flow of Resources -- Step 2: Compute the Equivalent Units of Production -- Step 3: Identify the Product Costs for Which to Account.

Step 4: Compute the Costs per Equivalent Unit: FIFO.

Description based on publisher supplied metadata and other sources.

Electronic reproduction. Ann Arbor, Michigan : ProQuest Ebook Central, 2025. Available via World Wide Web. Access may be limited to ProQuest Ebook Central affiliated libraries.