Aesa

Topics: Management accounting, Cost accounting, Costs Pages: 33 (9424 words) Published: September 15, 2014

Managers Need Accounting Information
The opening paragraph of an accounting textbook says, “Managers need accounting information and need to know how to use it.”10 Critically evaluate this statement. Using Accounting for Planning
The owner of a small software company felt his accounting system was useless. He stated, “Account- ing systems only generate historical costs. Historical costs are useless in my business because every- thing changes so rapidly.” Required:

a. Are historical costs useless in rapidly changing environments? b. Should accounting systems be limited to historical costs? Goals of a Corporation
Budgeting
A finance professor and a marketing professor were recently comparing notes on their perceptions of corporations. The finance professor claimed that the goal of a corporation should be to maximize the value to the shareholders. The marketing professor claimed that the goal of a corporation should be to satisfy customers. What are the similarities and differences in these two goals? Salespeople at a particular firm forecast what they expect to sell next period. Their supervisors then review the forecasts and make revisions. These forecasts are used to set production and purchasing plans. In addition, salespeople receive a fixed bonus of 20 percent of their salary if they exceed their forecasts. Discuss the incentives of the salespeople to forecast next-period sales accurately. Discuss the trade-off between using the budget for decision making versus using it as a control device. Golf Specialties

Golf Specialties (GS), a Belgian company, manufactures a variety of golf paraphernalia, such as head covers for woods, embroidered golf towels, and umbrellas.

12 Standard Costs: Direct Labor and Materials 554
A. Standard Costs 555
1. Reasons for Standard Costing 556 2. Setting and Revising Standards 557 3. Target Costing 561 B. Direct Labor and Materials Variances 562
1. Direct Labor Variances 563
2. Direct Materials Variances 567
3. Risk Reduction and Standard Costs 571
C. Incentive Effects of Direct Labor and Materials Variances 571 1. Build Inventories 572
2. Externalities 572
3. Discouraging Cooperation 573 4. Mutual Monitoring 573
5. Satisficing 573
D. Disposition of Standard Cost Variances 574
E. The Costs of Standard Costs 576
F. Summary 578
13 Overhead and Marketing Variances 592
A. Budgeted, Standard, and Actual Volume 593
B. Overhead Variances 596
1. Flexible Overhead Budget 596
2. Overhead Rate 597
3. Overhead Absorbed 598
4. Overhead Efficiency, Volume, and Spending Variances 599 5. Graphical Analysis 602 6. Inaccurate Flexible Overhead Budget 604
C. Marketing Variances 605
1. Price and Quantity Variances 605
2. Mix and Sales Variances 606
D. Summary 608
14 Management Accounting in a Changing Environment 627
A. Integrative Framework 628
1. Organizational Architecture 629
2. Business Strategy 630
3. Environmental and Competitive Forces Affecting Organizations 633 4. Implications 633 B. Organizational Innovations and Management Accounting 634
1. Total Quality Management (TQM) 635 2. Just-in-Time (JIT) Production 639 3. Six Sigma and Lean Production 642
4. Balanced Scorecard 644
C. When Should the Internal Accounting System Be Changed? 650 D. Summary 651
Solutions to Concept Questions 674 Glossary 684
Index 693
Chapter One Introduction
Chapter Outline
A. ManagerialAccounting:DecisionMaking and Control
B. DesignandUseofCostSystems
C. Marmots and Grizzly Bears
D. ManagementAccountant’sRoleinthe Organization
E. EvolutionofManagementAccounting: A Framework for Change
F. Vortec Medical Probe Example
G. Outline of the Text
H. Summary
1

2 Chapter 1 A. Managerial Accounting: Decision Making and Control
Managers at BMW must decide which car models to produce, the quantity of each model to produce given the selling prices for the models, and how to manufacture the automo-...
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