management accounting - landing
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ManagementAccounting
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London Boston Burr Ridge, IL Dubuque, IA Madison, WI New York San FranciscoSt. Louis Bangkok Bogotá Caracas Kuala Lumpur Lisbon Madrid Mexico CityMilan Montreal New Delhi Santiago Seoul Singapore Sydney Taipei Toronto
Management Accounting
Willie Seal Ray H. Garrison Eric W. Noreen
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Management AccountingWillie Seal, Ray H. Garrison, Eric W. NoreenISBN-13 9-78-100077010-0ISBN-10 0-07-7010776-4
Published by McGraw-Hill EducationShoppenhangers RoadMaidenheadBerkshireSL6 2QLTelephone: 44 (0) 1628 502 500Fax: 44 (0) 1628 770 224Website: www.mcgraw-hill.co.uk
British Library Cataloguing in Publication DataA catalogue record for this book is available from the British Library
Library of Congress Cataloguing in Publication DataThe Library of Congress data for this book has been applied for from the Libraryof Congress
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Published by McGraw-Hill Education (UK) Limited an imprint of The McGraw-HillCompanies, Inc., 1221 Avenue of the Americas, New York, NY 10020. Copyright© 2003 by McGraw-Hill Education (UK) Limited. All rights reserved. No part ofthis publication may be reproduced or distributed in any form or by any means,or stored in a database or retrieval system, without the prior written consent ofThe McGraw-Hill Companies, Inc., including, but not limited to, in any networkor other electronic storage or transmission, or broadcast for distance learning.
ISBN-13 9-78-100077010-0ISBN-10 0-07-7010776-4© 2006. Exclusive rights by The McGraw-Hill Companies, Inc. for manufactureand export. This book cannot be re-exported from the country to which it is soldby McGraw-Hill.
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Detailed contents vi
Preface xvi
Guided tour xviii
Acknowledgements xxii
1 Management accounting and the business environment 1
2 Cost terms, concepts and classifications 21
3 Systems design: job-order costing 65
4 Systems design: process costing 129
5 Cost behaviour: analysis and use 169
6 Profit reporting under variable costing and absorption costing 215
7 Cost–volume–profit relationships 247
8 Activity-based costing 297
9 Relevant costs for decision making 349
10 Capital investment decisions 401
11 Managerial decision making under risk and uncertainty 469
12 Profit planning and the role of budgeting 493
13 Standard costs and variance analysis 537
14 Flexible budgets and overhead analysis 587
15 Segment reporting and decentralization 647
16 Pricing, target costing and intra-company transfers 705
17 Strategic management accounting and the balanced scorecard 753
18 Performance management, management control and corporate governance 797
19 Stock management: EOQ, JIT, ERP and e-commerce 831
20 Quality and business processes: measurement and management 859
21 Cost management and the impact of constraints: supply chain management,corporate unbundling and shared service centres 891
22 Management accounting change in its organizational and institutionalcontext: a case study perspective 923
Glossary 943
Bibliography 963
Index 975
Brief Table of Contents
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Preface xvi
Guided tour xviii
Technology to enhance teaching andlearning xx
Acknowledgements xxii
1 Management accounting and thebusiness environment 1The work of management and the need formanagement accounting information 2
Planning 2Directing and motivating 3Controlling 3The end results of managers’activities 4The planning and control cycle 4
Comparison of financial and managementaccounting 5
Emphasis on the future 6Relevance and fiexibility of data 6Less emphasis on precision 6Segments of an organization 6Generally Accepted Accounting Principles(GAAP) 6Management accounting – not mandatory 7
Basic organizational structure 7Decentralization 7Line and staff relationships 8
Expanding and changing role ofmanagement accounting 9
International diversity in managementaccounting traditions 10
Changes in the business environment andmanagement accounting 10
New business processes and technologies 10Enterprise resource planning systems 11Deregulation and privatization 11The increased importance of serviceindustries and changing approaches topublic sector management 12
International competition 12
Management accounting as a professionand the role of business ethics 13Summary 14Key terms for review 15Questions 16Exercises 16Problems 17Group exercise 18Internet exercise 18Cases 18Endnotes 19
2 Cost terms, concepts andclassifications 21General cost classifications 22
Manufacturing costs 23Non-manufacturing costs 24Product costs versus period costs 24
Cost classifications on financial statements 25
The balance sheet 25The profit and loss account 27Schedule of cost of goods manufactured 29
Product costs – a closer look 31Stock-related costs 32An example of cost flows 33
Cost classifications for predicting costbehaviour 34
Variable cost 34Fixed cost 36
Cost classifications for assigning costs tocost objects 37
Direct cost 37Indirect cost 37
Cost classifications for decision making 37
Differential cost and revenue 37Opportunity cost 39Sunk cost 39
Summary 39Key terms for review 40
Detailed Table of Contents
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Further reading 42Review problem 1: cost terms 42
Solution to review problem 1 43Review problem 2: schedule of cost ofgoods manufactured and profit and lossaccount 44
Solution to review problem 2 45Questions 46Exercises 47Problems 50Cases 60Endnotes 63
3 Systems design: job-order costing 65Process and job-order costing 66
Process costing 67Job-order costing 67
Job-order costing – an overview 68Measuring direct materials cost 69Job cost sheet 69Measuring direct labour cost 70Application of manufacturing overhead 71
Choice of an allocation base for overheadcost 74
Computation of unit costs 75Summary of document flows 75
Job-order costing – the flow of costs 75The purchase and issue of materials 76Labour cost 77Manufacturing overhead costs 78The application of manufacturing overhead 79Non-manufacturing costs 81Cost of goods manufactured 82Cost of goods sold 83Summary of cost flows 83
Problems of overhead application 85Underapplied and overapplied overhead 86Disposition of under- or overappliedoverhead balances 88A general model of product cost flows 90Multiple predetermined overhead rates 90Job-order costing in service companies 91
Use of bar code technology 92The predetermined overhead rate andcapacity 93Summary 95
Key terms for review 95Review problem: job-order costing 96
Solution to review problem 97Appendix 3A: Service department costing 100
Allocations using the direct and stepmethods 100Selecting allocation bases 100Interdepartmental services 101Effect of allocations on operatingdepartments 105Some cautions in allocating servicedepartment costs 106
Key terms for review (Appendix 3A) 108Questions 109Exercises 110Problems 115Cases 122Further reading 126Endnotes 127
4 Systems design: process costing 129Comparison of job-order and processcosting 130
Similarities between job-order and processcosting 130Differences between job-order and processcosting 131
A perspective of process cost flows 132Processing departments 132The flow of materials, labour and overheadcosts 133Materials, labour and overhead cost entries 134
Equivalent units of production 136Weighted-average method 137
Production report – weighted-averagemethod 140
Step 1: prepare a quantity schedule andcompute the equivalent units 141Step 2: compute costs per equivalent unit 142Step 3: prepare a cost reconciliation 143A comment about rounding errors 146
Operation costing 146Summary 147Key terms for review 147Appendix 4A: FIFO method 148
Equivalent units – FIFO method 148
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Comparison of equivalent units ofproduction under the weighted-average andFIFO methods 149Production report – FIFO method 150A comparison of costing methods 153
Review problem: process cost flows andreports 155
Solution to review problem 156Questions 158Exercises 159Problems 163Cases 166Endnotes 167
5 Cost behaviour: analysis and use 169Types of cost behaviour patterns 170Variable costs 170
True variable versus step-variable costs 173The linearity assumption and the relevantrange 174
Fixed costs 175Types of fixed costs 175
Committed fixed costs 176Discretionary fixed costs 176The trend towards fixed costs 177Is labour a variable or a fixed cost? 177Fixed costs and the relevant range 178Mixed costs 179
The analysis of mixed costs 180The high–low method 183The scattergraph method 185The least-squares regression method 187Multiple regression analysis 189
The contribution format 189Why a new profit and loss statementformat? 189The contribution approach 190
Key terms for review 191Appendix 5A: Least-squares regressioncalculations 193Appendix 5B: Non-linear cost functions andthe learning curve 195Review problem 1: cost behaviour 197
Solution to review problem 1 197Review problem 2: high-low method 198
Solution to review problem 2 199Questions 199Exercises 200Problems 205
Cases 211Endnotes 214
6 Profit reporting under variablecosting and absorption costing 215Overview of absorption and variablecosting 216
Absorption costing 216Variable costing 216Unit cost computations 217
Profit comparison of absorption andvariable costing 218Extended comparison of profit data 221Effect of changes in production on profit 226
Variable costing 226Absorption costing 226
The impact on the manager 230Choosing a costing method 231
Decision making 231External reporting 231Advantages of variable costing and thecontribution approach 232
Impact of JIT methods 232Summary 233Key terms for review 234Review problem 234
Solution to review problem 235Questions 237Exercises 237Problems 238Cases 244Endnotes 246
7 Cost–volume–profit relationships 247The basics of cost–volume–profit (CVP)analysis 249Contribution margin 250Contribution margin ratio (CN ratio) 252Some applications of CVP concepts 253
Importance of the contribution margin 257Break-even analysis 257
Break-even computations 257CVP relationships in graphic form 259Target profit analysis 261
The CVP equation 261The contribution margin approach 262
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The margin of safety 262CVP considerations in choosing a coststructure 263
Cost structure and profit stability 263Operating leverage 265
Automation: risks and rewards from a CVPperspective 267
Structuring sales commissions 267The concept of sales mix 269
The definition of sales mix 269Sales mix and break-even analysis 269
Assumptions of CVP analysis 271Summary 272Key terms for review 272Review problem: CVP relationships 273
Solution to review problem 273Questions 276Exercises 277Problems 281Cases 290Endnotes 295
8 Activity-based costing 297How costs are treated under activity-basedcosting 299
Non-manufacturing costs and activity-basedcosting 299Manufacturing costs and activity-basedcosting 299The costs of idle capacity in activity-basedcosting 299
Designing an activity-based costing (ABC)system 300Identifying activities to include in the ABCsystem 304The mechanics of activity-based costing 304
Tracing overhead costs to activities and costobjects 306Assigning costs to activity cost pools 306
Computation of activity rates 309Targeting process improvements 311Assigning costs to cost objects 312Overhead costs computed using the ABCsystem 313Product margins computed using the ABCsystem 315Comparison of traditional and ABC productcosts 315
Product margins computed using thetraditional cost system 315The differences between ABC and traditionalproduct costs 315
ABC product costs – an action analysis 318Ease of adjustment codes 318The action analysis view of the ABC data 319
Service costing and management: thebenefits of an ABC approach 323Activity-based costing and external reports 324A simplified approach to activity-basedcosting 325
9 Relevant costs for decision making 349Cost concepts for decision making 350
Identifying relevant costs and benefits 350Different costs for different purposes 351Sunk costs are not relevant costs 351Book value of old equipment 352
Future costs that do not differ are notrelevant costs 355
An example of irrelevant future costs 355Why isolate relevant costs? 357
Adding and dropping product lines andother segments 357
An illustration of cost analysis 357A comparative format 360
Beware of allocated fixed costs 360The make or buy decision 362
An example of make or buy 362The matter of opportunity cost 363
Special orders 364Utilization of a constrained resource 365
Contribution in relation to a constrainedresource 365
Joint product costs and the contributionapproach 367
The pitfalls of allocation 367Sell or process further decisions 368
Activity-based costing and relevant costs 370Summary 370Key terms for review 370Review problem: relevant costs 371
Solution to review problem 372Questions 373Exercises 374
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Problems 381Cases 394Further reading 399Endnotes 399
10 Capital investment decisions 401Capital budgeting – planning investments 402
Typical capital budgeting decisions 402The time value of money 403
Discounted cash flows – the net presentvalue method 403
The net present value methodillustrated 403Emphasis on cash flows 405Recovery of the original investment 406Simplifying assumptions 406Choosing a discount rate 407An extended example of the net presentvalue method 407
Discounted cash flows – the internal rateof return method 408
The internal rate of return methodillustrated 409Salvage value and other cash flows 410The process of interpolation 410Using the internal rate of return 410
The cost of capital as a screening tool 411Comparison of the net present value andthe internal rate of return methods 412Expanding the net present value method 413
The total-cost approach 413The incremental-cost approach 415Least-cost decisions 415Capital budgeting and non-profitorganizations 416
Investments in automated equipment 417Benefits from automation 417Decision framework for intangible benefits 418
Preference decisions – the ranking ofinvestment projects 419
Internal rate of return method 419Net present value method 420
Other approaches to capital budgetingdecisions 421
The payback method 421The simple rate of return method 425
Post audit of investment projects 427
Summary 427Key terms for review 428Review problem 1: basic present valuecomputations 429
Solution to review problem 1 429Review problem 2: comparison of capitalbudgeting methods 430Solution to review problem 2 431Appendix 10A: The concept of presentvalue 432
The theory of interest 432Computation of present value 433Present value of a series of cash flows 435
Key terms for review (Appendix 10A) 436Appendix 10B: Inflation and capitalbudgeting 437Appendix 10C: Future value and presentvalue tables 439Appendix 10D: The impact of corporatetaxation 441Questions 444Exercises 445Problems 449Cases 465Endnotes 467
11 Managerial decision making underrisk and uncertainty 469Risk and uncertainty 470
Investment decision making and risk 471Attitudes to risk 473Inter-related risks: the decision tree 475The value of extra information 475Pay-off strategies 476
Some recent innovations in the formalanalysis of risk 478
The real options approach to risk 478The fuzzy mathematics approach 480Some problems with mathematicalmodelling 481
Behavioural and organizational responsesto uncertainty 481
Diversification 482Summary 483Key terms for review 483Questions 484Exercises 484Problems 486
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Cases 489Endnotes 492
12 Profit planning and the role ofbudgeting 493The basic framework of budgeting 494
Definition of budgeting 494Personal budgets 494Differences between planning and control 495Advantages of budgeting 495Responsibility accounting 496Choosing a budget period 497The self-imposed or participativebudget 497The matter of human relations 499The budget committee 500The master budget inter-relationships 500Sales forecasting – a critical step 502
Preparing the master budget 502The sales budget 504The production budget 505The direct materials budget 506The direct labour budget 507The manufacturing overhead budget 507The ending finished goods stock budget 510The selling and administrative expensebudget 510The cash budget 511
The budgeted profit and loss account 514The budgeted balance sheet 514Expanding the budgeted profit and lossaccount 517Summary 518Key terms for review 518Review problem: budget schedules 520
Solution to review problem 521Questions 523Exercises 523Problems 525Cases 531Further reading 535Endnotes 536
13 Standard costs and variance analysis 537Standard costs – management byexception 539
Who uses standard costs? 539
Setting standard costs 540Ideal versus practical standards 540Setting direct materials standards 541Setting direct labour standards 542Setting variable manufacturing overheadstandards 543Are standards the same as budgets? 544
A general model for variance analysis 544Price and quantity variances 545
Using standard costs – direct materialsvariances 545
Materials price variances – a closer look 548Materials quantity variance – a closer look 549
Using standard costs – direct labourvariances 550
Labour rate variance – a closer look 551Labour efficiency variance – a closer look 552
Using standard costs – variablemanufacturing overhead variances 553
Manufacturing overhead variances – acloser look 554
Structure of performance reports 556Variance analysis and management byexception 556Evaluation of controls based on standardcosts 558
Advantages of standard costs 558Potential problems with the use of standardcosts 558
Summary 560Key terms for review 560Review problem: standard costs 562
Solution to review problem 562Appendix 13A: General ledger entries torecord variances 564
Direct materials variances 564Direct labour variances 565Variable manufacturing overhead variances 565Cost flows in a standard cost system 566
Questions 566Exercises 567Problems 570Cases 584Endnotes 586
14 Flexible budgets and overheadanalysis 587
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Flexible budgets 558Characteristics of a flexible budget 588Deficiencies of the static budget 589How a flexible budget works 591Using flexible budgeting concept inperformance evaluation 591The measure of activity – a critical choice 594
Variable overhead variances – a closerlook 595
The problem of actual versus standard hours 595Spending variance alone 596Both spending and efficiency variances 597Overhead rates and fixed overhead analysis 599
Flexible budgets and overhead rates 600Overhead application in a standard costsystem 602The fixed overhead variances 603The budget variance – a closer look 603The volume variance – a closer look 605Graphic analysis of fixed overhead variances 605Cautions in fixed overhead analysis 606Overhead variances and under- oroverapplied overhead cost 607
Activity-based budgeting 607Summary 609Key terms for review 609Review problem: overhead analysis 610
Solution to review problem 611Questions 613Exercises 614Problems 619Cases 640Further reading 645Endnotes 645
15 Segment reporting anddecentralization 647Decentralization in organizations 648
Advantages and disadvantages ofdecentralization 648Decentralization and segment reporting 649Cost, profit and investment centres 649Responsibility centres 650
Segment reporting and profitabilityanalysis 650
Levels of segmented statements 654
Sales and contribution margin 655Traceable and common fixed costs 655Traceable costs can become common costs 657Segment margin 658There is more than one way to segment acompany 659
Hindrances to proper cost assignment 660Omission of costs 661Inappropriate methods for allocating costsamong segments 661Arbitrarily dividing common costs amongsegments 662
Rate of return for measuring managerialperformance 662
The return on investment (ROI) formula 663Net operating profit and operating assetsdefined 663Plant and equipment: net book value orgross cost? 663
Controlling the rate of return 664Increase sales 667Reduce expenses 667Reduce operating assets 667Criticisms of ROI 668
Residual income – another measure ofperformance 668
Motivation and residual income 669Divisional comparison and residual income 671ROI, RI and the balanced scorecard 671The problem of single period metrics: thebonus bank approach 672
Summary 672Key terms for review 672Review problem 1: segmented statements 673
Solution to review problem 1 674Review problem 2: return on investment(RDI) and residual income 675
Solution to review problem 2 675Questions 676Exercises 676Problems 680Cases 694Endnotes 703
16 Pricing, target costing and intra-company transfers 705The economists’ approach to pricing 706
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Elasticity of demand 706The profit-maximizing price 707
The absorption costing approach to cost-plus pricing 709
Setting a target selling price using theabsorption costing approach 710Determining the mark-up percentage 711Problems with the absorption costingapproach 712
Target costing 713Reasons for using target costing 713An example of target costing 714
Service companies – time and materialpricing 714
Time component 714Material component 714An example of time and materialpricing 714
Transfer pricing 717Negotiated transfer prices 717Transfers at the cost to the selling division 722Transfers at market price 722Divisional autonomy and sub-optimization 723International aspects of transfer pricing 723
Summary 724Key terms for review 725Review problem: transfer pricing 726
Situation A 726Solution to situation A 726Situation B 727Solution to situation B 727
Questions 728Exercises 728Problems 732Cases 749Endnotes 752
17 Strategic management accountingand the balanced scorecard 753What is strategic management accounting? 754Some basic techniques of strategicmanagement accounting 755
Forward-looking decisions: SMA and netpresent value (NPV) 755
SMA as strategic intelligence: Stopylton 756
SMA and the impact of corporate strategyliterature 757
Strategic cost management 759The Mavis Machines case 760NPV and strategic decision making: aniterative model 761
Strategy as collision: lean enterprises andbusiness process re-engineering 763Modelling and monitoring strategy: the BSCand other non-financial measures 763
Common characteristics of balancedscorecards 764
Strategy as an emergent process:interactive control systems and thelearning organization 772Some obstacles to SMA 773Summary 773Key terms for review 774Questions 775Exercises 775Problems 776Cases 783Endnotes 795
18 Performance management,management control and corporategovernance 797Some criticisms of budgeting as aperformance management system 799
Reform or abandon budgeting? 800General models of performancemeasurement and management control 800
The levers of control approach to strategyimplementation 801Corporate governance: a financialperspective 802Management accounting and the integrity offinancial information 805Management accounting and regulatoryapproaches to corporate governance 805
Corporate governance and riskmanagement 807
Wealth creation and good corporategovernance: the role of boundary systems 807
Enterprise governance 807A broader view on corporate governance:stakeholders, business ethics and socialresponsiveness 810
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The Performance Prism 810Business ethics in action: an example ofenvironmental costing 813Informal versus formal control systems 813
Organizational control and service deliveryin the public sector: beyondincrementalism? 814
New political and managementstructures 815The introduction of policy-led budgeting 815
Summary 818Key terms for review 818Problems 819Cases 822Internet exercises 829Endnotes 829
19 Stock management: EOQ, JIT, ERPand e-commerce 831Economic order quantity (EOQ) and thereorder point 832
Costs associated with stock 832Computing the economic order quantity(EOQ) 833
Just-in-time (JIT) and the economic orderquantity (EOQ) 835
Production lot size 836Reorder point and safety stock 838
Just-in-time (JIT) 839The JIT concept 840Benefits of a JIT system 844
Stock control and enterprise resourceplanning (ERP) 844E-commerce: new challenges formanagement accounting 845Summary 846Key terms for review 847Questions 847Exercises 848Problems 849Cases 853Endnotes 857
20 Quality and business processes: measurement and management 859
The cost of quality model 860Quality of conformance 860Prevention costs 862Appraisal costs 862Internal failure costs 863External failure costs 863Distribution of quality costs 863Quality cost reports 864From modelling the costs of quality toquality management 867
Total quality management (TQM) 867The plan-do-check-act cycle 867An example of TQM in practice 868International aspects of quality 869Some criticisms of TQM 869
Benchmarking 870Benchmarking in the public sector 871Some problems with benchmarking 871
Business process re-engineering (BPR) 873
What does a re-engineered process look like? 873Some criticisms of re-engineering 874
BPR and management accounting: activity-based management 874
Some problems with ABM 875Obstacles to organizational change and theadvantages of a fresh start 876Summary 876Key terms for review 877Questions 877Exercises 878Problems 879Endnotes 889
21 Cost management and the impact ofconstraints: supply chainmanagement, corporate unbundlingand shared service centres 891The problem of multiple constraints in theshort run: linear programming 892
Sensitivity analysis 894Shadow prices 895
The limitations of the linear programmingmodel as a management accountingtechnique 895
Managing constraints 896The theory of constraints 897
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TOC and continuous improvement 897An example of TOC 897The impact of TOC on managementaccounting 898Throughput accounting 898
Cost management in the long run: life-cycle costing and the supply chain 899
Life-cycle costing 899Target costing and design 900Some problems with target and life-cyclecosting 901
The make or buy decision from a strategic perspective: supply chainmanagement 901
Integration versus sub-contracting 902Traditional supply relationships 903Strategic partnering 904The implications for managementaccounting of strategic approaches to makeor buy 904
Corporate unbundling: shared servicecentres and service outsourcing 905
The shared service centre model 906Service outsourcing 908
Summary 910Key terms for review 910Questions 911Exercises 912Problems 913Cases 918Endnotes 921
22 Management accounting change in its organizational and institutional context: a case studyperspective 923Management accounting in itsorganizational and institutional context:case studies as research tools 924Case Study 1: Trafalgar bank: ABC andorganizational change 925
The former management control approachin the bank 925Cheque clearing as a work process 926Why ABC? 926The change agents 926Data collection and processing: thetechnology of ABC 926
The perception of ABC by middle managers 927The perception of ABC by operationalmanagers and shop-floor workers 927HRE and the emerging dominance of ABC 927Some effects of the ABC project 927
Case study 2: It takes two to tango 928The Assembler’s supply chain managementphilosophy 929A draft alliance agreement 929The Strategic Supplier 929The development of the relationship 930The evolution of the agreement 930
Case study 3: GEC/Marconi 931Key players 931Accounting ratios and control routines inGEC 932The pressures for more strategic focus 932The performance of GEC (1980–1996) 932Marconi (1996–2001) boom … 933… and bust! 934
Management accounting andorganizational change: an institutionalinterpretation 934
What is being changed or left unchanged? 934Management accounting change as anevolutionary process 935What sort of changes? 935The basic model 935
International diversity in managementaccounting traditions: the role of theprofession revisited 936
The case study as narrative 937The case study as a teaching and learningdevice 938
Summary 938Key terms for review 938Cases 939Further reading 941Endnotes 942
Glossary 943
Bibliography 000
Index 000
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This book builds on the excellent foundations laid by the first European edition ofManagement Accounting by willie Seal. In building on these foundations and developingthis brand new second edition we have focused on the key strengths of the previousedition while also integrating new coverage of emerging topics and new featuresdesigned to make using and teaching with this text easier than ever.
The main changes and developments to this edition are:
■ A brand new chapter (18) that links the topics of managaement control and perform-ance management to emerging issues in corporate governance, corporate socialresponsibility and public sector managment accounting
■ Existing chapters have been supplemented with new material on service departmentcosting, activity-based budgeting, customer profitability analysis, and shared service centres
■ The chapter on case study analysis now includes a discussion on the use of narrativetheory in management accounting
■ There are new case studies and more end-of-chapter questions, many of which arefrom recent professional exam papers
■ The main currency employed in the book is the pound sterling but there are moreexamples based on the euro
■ Each chapter now starts with a Concepts in Context box which locates the mainthemes of the chapter in a practical setting
■ Many of the end of chapter self-assessment questions, problems and cases now havesuggested timings so that students know how long they should be spending onthem, and lecturers can use them to set as examination practice.
Other key featuresSuperior pedagogyThe book includes a full suite of pedagogical learning tools designed to make teachingand learning stimulating and efficient, all presented in a visually impressive format. Ineach chapter you will find: Learning Objectives, Focus on Current Practicevignettes, Key Terms, Summaries, Questions, Exercises, Problems and Cases.There are also Management Accounting in Action vignettes, worked Examples,Group Exercises and Internet Exercises. At the back of the book you will find afull Bibliography to make reading around the subject easy.
Comprehensive coverageWith complete coverage of core technical material and emerging issues, this text per-fectly balances the need to combine practical understanding with deeper explanationsof how managment accounting remains relevant and compelling in an ever-changingworld.
Accessible styleWritten in a style that makes learning interesting and understanding easy, ManagementAccounting takes a highly refreshing approach to its subject ensuring its popularity withlecturerse and students alike.
Preface
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Online resourcesThe book is supported by an excellent online learning centre with self-test ques-tions for the students and tutor downloads including lecturer’s notes, a test bank ofmultiple choice questions, power-point slides and solutions to all questions and cases.A brand new feature for this edition’s Online Learning Centre is Excel based problems,which give students the opportunity to solve problems from the book using excelworksheets – thus developing practical computing and accountancy skills in tandem.
xviiPreface
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Guided tour
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Concepts in ContextEach chapter opens with a concepts in context box, intro-ducing you to the topic to follow and grounding thechapter concepts in real life terms.
ExhibitsEach chapter includes a host of 4-colour exhibits, illus-trating the concepts you need to know and the techniquesyou need to learn.
Learning ObjectivesEach chapter opens with a set of learning objectives, summarizing whatreaders should learn from each chapter.
Focus on Current Practice These lively mini-examples illustrate precisely how managementaccounting theory affects companies.
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xixGuided tour
— A/W to come —
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Key TermsThese are highlighted throughout the chapter, and defi-nitions are provided at the end of each chapter. A fullglossary also features at the back of the book.
End of Chapter Assessment MaterialEach chapter has a wealth of assessment material designedto make learning and self-testing easy and fun. You willfind the following features in most chapters:
■ Review problems ■ Exercises
■ Review solutions ■ Problems
■ Questions ■ Cases
SummaryThis briefly reviews and reinforces the main topics you will have coveredin each chapter to ensure you have acquired a solid understanding ofthe key topics.
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Online Learning Centre
Technology to enhance teaching and learning
After completing each chapter, log on to the supporting Online Learning Centrewebsite. Take advantage of the study tools offered to reinforce the material you haveread in the text, and to develop your knowledge of management accounting in a funand effective way.
Resources for students include:
■ Self-test questions
■ Internet exercises
■ Excel exercises
■ Case studies
■ Glossary
■ Web links
Also available for lecturers:
■ Powerpoint slides
■ Exercise solutions
■ Lecture Manual
■ Group Exercises
■ Artwork
■ Case solutions
For lecturers: Primis Content Centre
If you need to supplement your course with additional cases or content, create a per-sonalized e-Book for your students. Visit www.primiscontentcenter.com or [email protected] for more information.
Visit www.mcgraw-hill.co.uk/textbooks/seal today!
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xxiTechnology to enhance teaching and learning
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Our thanks go to the following reviewers for their comments at various stages in thetext’s development:
■ Alexandra Charles
■ James Rattenbury
■ Jonathan Rooks
■ Ian Herbert
■ Peter Friis
■ Dila Agrizi
■ John Currie
■ Samuel Idowu
■ Peter Casson
■ Jan Renauld
■ Rennie Tjekstra
■ Martin Broad
We’d also like to thank the following individuals for contributing case material for thisedition:
■ Bill Hughill
Acknowledgements
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