Description

Book Synopsis


Table of Contents

1 Managerial Accounting 1-1

Just Add Water . . . and Paddle: Current Designs 1-1

Managerial Accounting Basics 1-3

Comparing Managerial and Financial Accounting 1-3

Management Functions 1-4

Organizational Structure 1-5

Managerial Cost Concepts 1-7

Manufacturing Costs 1-8

Product versus Period Costs 1-9

Illustration of Cost Concepts 1-10

Manufacturing Costs in Financial Statements 1-12

Balance Sheet 1-12

Income Statement 1-13

Cost of Goods Manufactured 1-14

Cost of Goods Manufactured Schedule 1-15

Managerial Accounting Today 1-16

Service Industries 1-16

Focus on the Value Chain 1-17

Balanced Scorecard 1-19

Business Ethics 1-19

Corporate Social Responsibility 1-20

The Value of Data Analytics 1-20

Data Analytics Insight: Using Data in Its Own World 1-21

Data Analytics in Action 1-44

2 Job Order Costing 2-1

Profiting from the Silver Screen: Disney 2-1

Cost Accounting Systems 2-3

Process Cost System 2-3

Job Order Cost System 2-4

Data Analytics Insight: Providing Service Through the Cloud 2-4

Job Order Cost Flow 2-5

Accumulating Manufacturing Costs 2-5

Assigning Manufacturing Costs 2-7

Raw Materials Costs 2-8

Factory Labor Costs 2-10

Predetermined Overhead Rates 2-13

Entries for Jobs Completed and Sold 2-16

Assigning Costs to Finished Goods 2-17

Assigning Costs to Cost of Goods Sold 2-17

Summary of Job Order Cost Flows 2-18

Job Order Costing for Service Companies 2-19

Advantages and Disadvantages of Job Order Costing 2-20

Applied Manufacturing Overhead 2-22

Under- or Overapplied Manufacturing Overhead 2-22

Data Analytics in Action 2-43

3 Process Costing 3-1

The Little Guy Who Could: Jones Soda 3-1

Overview of Process Cost Systems 3-3

Uses of Process Cost Systems 3-3

Process Costing for Service Companies 3-4

Similarities and Differences Between Job Order Cost and Process Cost Systems 3-4

Process Cost Flow and Assigning Costs 3-6

Process Cost Flow 3-6

Assigning Manufacturing Costs—Journal Entries 3-7

Equivalent Units 3-9

Weighted-Average Method 3-10

Refinements on the Weighted-Average Method 3-10

The Production Cost Report 3-13

Compute the Physical Unit Flow (Step 1) 3-14

Compute the Equivalent Units of Production (Step 2) 3-15

Compute Unit Production Costs (Step 3) 3-15

Prepare a Cost Reconciliation Schedule (Step 4) 3-16

Preparing the Production Cost Report 3-17

Costing Systems—Final Comments 3-18

Appendix 3A: FIFO Method for Equivalent Units 3-21

Equivalent Units Under FIFO 3-21

Comprehensive Example 3-22

FIFO and Weighted-Average 3-26

4 Activity-Based Costing 4-1

Precor is on Your Side: Precor 4-1

Traditional vs. Activity-Based Costing 4-3

Traditional Costing Systems 4-3

Illustration of a Traditional Costing System 4-3

The Need for a New Approach 4-4

Activity-Based Costing 4-5

ABC and Manufacturers 4-7

Identify and Classify Activities and Allocate Overhead to Cost Pools (Step 1) 4-8

Identify Cost Drivers (Step 2) 4-8

Compute Activity-Based Overhead Rates (Step 3) 4-9

Assign Overhead Costs to Products (Step 4) 4-10

Comparing Unit Costs 4-10

ABC Benefits and Limitations 4-13

The Advantage of Multiple Cost Pools 4-13

The Advantage of Enhanced Cost Control 4-15

The Advantage of Better Management Decisions 4-18

Some Limitations and Knowing When to Use ABC 4-18

Data Analytics Insight: Delivering People and Packages 4-19

ABC and Service Industries 4-20

Traditional Costing Example 4-20

Activity-Based Costing Example 4-21

Appendix 4A: Just-in-Time Processing 4-24

Objective of JIT Processing 4-25

Elements of JIT Processing 4-26

Benefits of JIT Processing 4-26

5 Cost-Volume-Profit 5-1

Don’t Worry—Just Get Big: Amazon.com 5-1

Cost Behavior Analysis 5-3

Variable Costs 5-3

Fixed Costs 5-4

Relevant Range 5-5

Mixed Costs 5-7

Mixed Costs Analysis 5-8

High-Low Method 5-8

Importance of Identifying Variable and Fixed Costs 5-10

Cost-Volume-Profit Analysis 5-11

Basic Components 5-11

CVP Income Statement 5-12

Break-Even Analysis 5-16

Mathematical Equation 5-16

Contribution Margin Techniques 5-17

Graphic Presentation 5-19

Target Net Income and Margin of Safety 5-20

Target Net Income 5-20

Margin of Safety 5-21

CVP and Data Analytics 5-22

Appendix 5A: Regression Analysis 5-24

Data Analytics in Action 5-46

6 Cost-Volume-Profit Analysis: Additional Issues 6-1

Not Even a Flood Could Stop It: Whole Foods Market 6-1

Basic CVP Concepts 6-3

Basic Concepts 6-3

CVP and Changes in the Business Environment 6-5

Sales Mix and Break-Even Sales 6-7

Break-Even Sales in Units 6-8

Data Analytics Insight: Taking No Chances with Its Profits 6-10

Break-Even Sales in Dollars 6-10

Sales Mix with Limited Resources 6-13

Operating Leverage and Profitability 6-15

Effect on Contribution Margin Ratio 6-16

Effect on Break-Even Point 6-17

Effect on Margin of Safety Ratio 6-17

Operating Leverage 6-17

Appendix 6A: Absorption Costing versus Variable Costing 6-21

Example Comparing Absorption Costing with Variable Costing 6-21

Net Income Effects 6-24

Decision-Making Concerns 6-28

Potential Advantages of Variable Costing 6-30

Data Analytics in Action 6-51

7 Incremental Analysis 7-1

Keeping It Clean: Method Products 7-1

Decision-Making and Incremental Analysis 7-3

Incremental Analysis Approach 7-3

How Incremental Analysis Works 7-4

Qualitative Factors 7-5

Relationship of Incremental Analysis and Activity-Based Costing 7-5

Types of Incremental Analysis 7-6

Special Orders 7-6

Make or Buy 7-8

Opportunity Cost 7-9

Sell or Process Further 7-11

Single-Product Case 7-11

Multiple-Product Case 7-12

Repair, Retain, or Replace Equipment 7-14

Eliminate Unprofitable Segment or Product 7-16

8 Pricing 8-1

They’ve Got Your Size—and Color: Zappos.com 8-1

Target Costing 8-3

Establishing a Target Cost 8-4

Cost-Plus and Variable-Cost Pricing 8-5

Cost-Plus Pricing 8-5

Limitations of Cost-Plus Pricing 8-7

Variable-Cost Pricing 8-8

Time-and-Material Pricing 8-10

Transfer Prices 8-13

Negotiated Transfer Prices 8-14

Cost-Based Transfer Prices 8-18

Market-Based Transfer Prices 8-19

Effect of Outsourcing on Transfer Pricing 8-19

Transfers Between Divisions in Different Countries 8-20

Data Analytics Insight: Setting the Optimal Price 8-20

Appendix 8A: Absorption-Cost and Variable-Cost Pricing 8-22

Absorption-Cost Pricing 8-23

Variable-Cost Pricing 8-24

Appendix 8B: Transfers Between Divisions in Different Countries 8-26

Data Analytics in Action 8-45

9 Budgetary Planning 9-1

What’s in Your Cupcake?: Erin McKennaʼs Bakery NYC 9-1

Effective Budgeting and the Master Budget 9-3

Budgeting and Accounting 9-3

The Benefits of Budgeting 9-3

Essentials of Effective Budgeting 9-4

The Master Budget 9-7

Sales, Production, and Direct Materials Budgets 9-8

Sales Budget 9-8

Production Budget 9-10

Direct Materials Budget 9-10

Direct Labor, Manufacturing Overhead, and S&A Expense Budgets 9-14

Direct Labor Budget 9-14

Manufacturing Overhead Budget 9-15

Selling and Administrative Expense Budget 9-15

Budgeted Income Statement 9-16

Data Analytics Insight: That’s Some Tasty Data! 9-17

Cash Budget and Budgeted Balance Sheet 9-18

Cash Budget 9-18

Budgeted Balance Sheet 9-21

Budgeting in Nonmanufacturing Companies 9-23

Merchandisers 9-23

Service Companies 9-24

Not-for-Profit Organizations 9-25

Data Analytics in Action 9-48

10 Budgetary Control and Responsibility Accounting 10-1

Pumpkin Madeleines and a Movie: The Roxy Hotel Tribeca 10-1

Budgetary Control and Static Budget Reports 10-3

Budgetary Control 10-3

Static Budget Reports 10-4

Flexible Budget Reports 10-7

Why Flexible Budgets? 10-7

Developing the Flexible Budget 10-9

Flexible Budget—A Case Study 10-10

Flexible Budget Reports 10-12

Data Analytics Insight: These Forecasts Move with the Times! 10-13

Responsibility Accounting and Responsibility Centers 10-14

Controllable versus Noncontrollable Revenues and Costs 10-16

Principles of Performance Evaluation 10-16

Data Analytics Insight: Hitting the Road with Zero-Based Budgeting 10-18

Responsibility Reporting System 10-18

Types of Responsibility Centers 10-19

Investment Centers 10-24

Return on Investment (ROI) 10-24

Responsibility Report 10-25

Alternative Measures of ROI Inputs 10-26

Improving ROI 10-26

Appendix 10A: ROI versus Residual Income 10-30

Residual Income Compared to ROI 10-31

Residual Income Weakness 10-31

Data Analytics in Action 10-52

11 Standard Costs and Balanced Scorecard 11-1

80,000 Different Caffeinated Combinations: Starbucks 11-2

Overview of Standard Costs 11-3

Distinguishing Between Standards and Budgets 11-4

Setting Standard Costs 11-4

Direct Materials Variances 11-8

Analyzing and Reporting Variances 11-8

Calculating Direct Materials Variances 11-10

Direct Labor and Manufacturing Overhead Variances 11-13

Direct Labor Variances 11-13

Data Analytics Insight: Speedy Data to the Rescue! 11-16

Manufacturing Overhead Variances 11-16

Variance Reports and Balanced Scorecards 11-18

Reporting Variances 11-18

Income Statement Presentation of Variances 11-19

Balanced Scorecard 11-20

Appendix 11A: Standard Cost Accounting System 11-24

Journal Entries 11-24

Ledger Accounts 11-26

Appendix 11B: Overhead Controllable and Volume Variances 11-26

Overhead Controllable Variance 11-27

Overhead Volume Variance 11-28

Data Analytics in Action 11-47

12 Planning for Capital Investments 12-1

Floating Hotels: Holland America Line 12-2

Capital Budgeting and Cash Payback 12-3

Cash Flow Information 12-3

Illustrative Data 12-4

Cash Payback 12-4

Net Present Value Method 12-6

Equal Annual Cash Flows 12-7

Unequal Annual Cash Flows 12-8

Choosing a Discount Rate 12-9

Simplifying Assumptions 12-10

Comprehensive Example 12-10

Capital Budgeting Challenges and Refinements 12-12

Intangible Benefits 12-12

Profitability Index for Mutually Exclusive Projects 12-14

Risk Analysis 12-15

Post-Audit of Investment Projects 12-16

Internal Rate of Return 12-17

Comparing Discounted Cash Flow Methods 12-18

Annual Rate of Return 12-20

Data Analytics Insight: Increasing the Chances of Gaming Wins 12-21

Data Analytics in Action 12-37

13 Statement of Cash Flows 13-1

Got Cash?: Microsoft 13-2

Usefulness and Format of the Statement of Cash Flows 13-3

Usefulness of the Statement of Cash Flows 13-3

Classification of Cash Flows 13-3

Significant Noncash Activities 13-4

Format of the Statement of Cash Flows 13-5

Preparing the Statement of Cash Flows—Indirect Method 13-6

Indirect and Direct Methods 13-7

Indirect Method—Computer Services Company 13-7

Step 1: Operating Activities 13-9

Summary of Conversion to Net Cash Provided by Operating Activities—Indirect Method 13-12

Step 2: Investing and Financing Activities 13-13

Step 3: Net Change in Cash 13-15

Analyzing the Statement of Cash Flows 13-17

Free Cash Flow 13-17

Appendix 13A: Statement of Cash Flows—Direct Method 13-20

Step 1: Operating Activities 13-20

Step 2: Investing and Financing Activities 13-26

Step 3: Net Change in Cash 13-27

Appendix 13B: Worksheet for the Indirect Method 13-27

Preparing the Worksheet 13-28

Appendix 13C: Statement of Cash Flows—T-Account Approach 13-32

14 Financial Analysis: The Big Picture 14-1

It Pays to Be Patient: Warren Buffett 14-2

Sustainable Income and Quality of Earnings 14-3

Sustainable Income 14-3

Quality of Earnings 14-7

Horizontal Analysis and Vertical Analysis 14-9

Horizontal Analysis 14-10

Vertical Analysis 14-12

Ratio Analysis 14-15

Liquidity Ratios 14-16

Solvency Ratios 14-17

Profitability Ratios 14-17

Financial Analysis and Data Analytics 14-18

Comprehensive Example of Ratio Analysis 14-18

Appendix A Time Value of Money A-1

Interest and Future Values A-2

Nature of Interest A-2

Future Value of a Single Amount A-3

Future Value of an Annuity A-5

Present Values A-8

Present Value Variables A-8

Present Value of a Single Amount A-9

Present Value of an Annuity A-11

Time Periods and Discounting A-13

Present Value of a Long-Term Note or Bond A-13

Capital Budgeting Situations A-16

Using Financial Calculators A-18

Present Value of a Single Sum A-19

Present Value of an Annuity A-19

Future Value of a Single Sum A-20

Future Value of an Annuity A-20

Internal Rate of Return A-20

Useful Applications of the Financial Calculator A-21

Cases For Management Decision-Making (Available in Wiley’s online course.)

Company Index I-1

Subject Index I-3

Rapid Review: Chapter Content

Managerial Accounting

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    A Loose-leaf by Jerry J. Weygandt, Paul D. Kimmel, Jill E. Mitchell

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      View other formats and editions of Managerial Accounting by Jerry J. Weygandt

      Publisher: John Wiley & Sons Inc
      Publication Date: 20/10/2020
      ISBN13: 9781119709589, 978-1119709589
      ISBN10: 111970958X
      Also in:
      Finance and accounting

      Description

      Book Synopsis


      Table of Contents

      1 Managerial Accounting 1-1

      Just Add Water . . . and Paddle: Current Designs 1-1

      Managerial Accounting Basics 1-3

      Comparing Managerial and Financial Accounting 1-3

      Management Functions 1-4

      Organizational Structure 1-5

      Managerial Cost Concepts 1-7

      Manufacturing Costs 1-8

      Product versus Period Costs 1-9

      Illustration of Cost Concepts 1-10

      Manufacturing Costs in Financial Statements 1-12

      Balance Sheet 1-12

      Income Statement 1-13

      Cost of Goods Manufactured 1-14

      Cost of Goods Manufactured Schedule 1-15

      Managerial Accounting Today 1-16

      Service Industries 1-16

      Focus on the Value Chain 1-17

      Balanced Scorecard 1-19

      Business Ethics 1-19

      Corporate Social Responsibility 1-20

      The Value of Data Analytics 1-20

      Data Analytics Insight: Using Data in Its Own World 1-21

      Data Analytics in Action 1-44

      2 Job Order Costing 2-1

      Profiting from the Silver Screen: Disney 2-1

      Cost Accounting Systems 2-3

      Process Cost System 2-3

      Job Order Cost System 2-4

      Data Analytics Insight: Providing Service Through the Cloud 2-4

      Job Order Cost Flow 2-5

      Accumulating Manufacturing Costs 2-5

      Assigning Manufacturing Costs 2-7

      Raw Materials Costs 2-8

      Factory Labor Costs 2-10

      Predetermined Overhead Rates 2-13

      Entries for Jobs Completed and Sold 2-16

      Assigning Costs to Finished Goods 2-17

      Assigning Costs to Cost of Goods Sold 2-17

      Summary of Job Order Cost Flows 2-18

      Job Order Costing for Service Companies 2-19

      Advantages and Disadvantages of Job Order Costing 2-20

      Applied Manufacturing Overhead 2-22

      Under- or Overapplied Manufacturing Overhead 2-22

      Data Analytics in Action 2-43

      3 Process Costing 3-1

      The Little Guy Who Could: Jones Soda 3-1

      Overview of Process Cost Systems 3-3

      Uses of Process Cost Systems 3-3

      Process Costing for Service Companies 3-4

      Similarities and Differences Between Job Order Cost and Process Cost Systems 3-4

      Process Cost Flow and Assigning Costs 3-6

      Process Cost Flow 3-6

      Assigning Manufacturing Costs—Journal Entries 3-7

      Equivalent Units 3-9

      Weighted-Average Method 3-10

      Refinements on the Weighted-Average Method 3-10

      The Production Cost Report 3-13

      Compute the Physical Unit Flow (Step 1) 3-14

      Compute the Equivalent Units of Production (Step 2) 3-15

      Compute Unit Production Costs (Step 3) 3-15

      Prepare a Cost Reconciliation Schedule (Step 4) 3-16

      Preparing the Production Cost Report 3-17

      Costing Systems—Final Comments 3-18

      Appendix 3A: FIFO Method for Equivalent Units 3-21

      Equivalent Units Under FIFO 3-21

      Comprehensive Example 3-22

      FIFO and Weighted-Average 3-26

      4 Activity-Based Costing 4-1

      Precor is on Your Side: Precor 4-1

      Traditional vs. Activity-Based Costing 4-3

      Traditional Costing Systems 4-3

      Illustration of a Traditional Costing System 4-3

      The Need for a New Approach 4-4

      Activity-Based Costing 4-5

      ABC and Manufacturers 4-7

      Identify and Classify Activities and Allocate Overhead to Cost Pools (Step 1) 4-8

      Identify Cost Drivers (Step 2) 4-8

      Compute Activity-Based Overhead Rates (Step 3) 4-9

      Assign Overhead Costs to Products (Step 4) 4-10

      Comparing Unit Costs 4-10

      ABC Benefits and Limitations 4-13

      The Advantage of Multiple Cost Pools 4-13

      The Advantage of Enhanced Cost Control 4-15

      The Advantage of Better Management Decisions 4-18

      Some Limitations and Knowing When to Use ABC 4-18

      Data Analytics Insight: Delivering People and Packages 4-19

      ABC and Service Industries 4-20

      Traditional Costing Example 4-20

      Activity-Based Costing Example 4-21

      Appendix 4A: Just-in-Time Processing 4-24

      Objective of JIT Processing 4-25

      Elements of JIT Processing 4-26

      Benefits of JIT Processing 4-26

      5 Cost-Volume-Profit 5-1

      Don’t Worry—Just Get Big: Amazon.com 5-1

      Cost Behavior Analysis 5-3

      Variable Costs 5-3

      Fixed Costs 5-4

      Relevant Range 5-5

      Mixed Costs 5-7

      Mixed Costs Analysis 5-8

      High-Low Method 5-8

      Importance of Identifying Variable and Fixed Costs 5-10

      Cost-Volume-Profit Analysis 5-11

      Basic Components 5-11

      CVP Income Statement 5-12

      Break-Even Analysis 5-16

      Mathematical Equation 5-16

      Contribution Margin Techniques 5-17

      Graphic Presentation 5-19

      Target Net Income and Margin of Safety 5-20

      Target Net Income 5-20

      Margin of Safety 5-21

      CVP and Data Analytics 5-22

      Appendix 5A: Regression Analysis 5-24

      Data Analytics in Action 5-46

      6 Cost-Volume-Profit Analysis: Additional Issues 6-1

      Not Even a Flood Could Stop It: Whole Foods Market 6-1

      Basic CVP Concepts 6-3

      Basic Concepts 6-3

      CVP and Changes in the Business Environment 6-5

      Sales Mix and Break-Even Sales 6-7

      Break-Even Sales in Units 6-8

      Data Analytics Insight: Taking No Chances with Its Profits 6-10

      Break-Even Sales in Dollars 6-10

      Sales Mix with Limited Resources 6-13

      Operating Leverage and Profitability 6-15

      Effect on Contribution Margin Ratio 6-16

      Effect on Break-Even Point 6-17

      Effect on Margin of Safety Ratio 6-17

      Operating Leverage 6-17

      Appendix 6A: Absorption Costing versus Variable Costing 6-21

      Example Comparing Absorption Costing with Variable Costing 6-21

      Net Income Effects 6-24

      Decision-Making Concerns 6-28

      Potential Advantages of Variable Costing 6-30

      Data Analytics in Action 6-51

      7 Incremental Analysis 7-1

      Keeping It Clean: Method Products 7-1

      Decision-Making and Incremental Analysis 7-3

      Incremental Analysis Approach 7-3

      How Incremental Analysis Works 7-4

      Qualitative Factors 7-5

      Relationship of Incremental Analysis and Activity-Based Costing 7-5

      Types of Incremental Analysis 7-6

      Special Orders 7-6

      Make or Buy 7-8

      Opportunity Cost 7-9

      Sell or Process Further 7-11

      Single-Product Case 7-11

      Multiple-Product Case 7-12

      Repair, Retain, or Replace Equipment 7-14

      Eliminate Unprofitable Segment or Product 7-16

      8 Pricing 8-1

      They’ve Got Your Size—and Color: Zappos.com 8-1

      Target Costing 8-3

      Establishing a Target Cost 8-4

      Cost-Plus and Variable-Cost Pricing 8-5

      Cost-Plus Pricing 8-5

      Limitations of Cost-Plus Pricing 8-7

      Variable-Cost Pricing 8-8

      Time-and-Material Pricing 8-10

      Transfer Prices 8-13

      Negotiated Transfer Prices 8-14

      Cost-Based Transfer Prices 8-18

      Market-Based Transfer Prices 8-19

      Effect of Outsourcing on Transfer Pricing 8-19

      Transfers Between Divisions in Different Countries 8-20

      Data Analytics Insight: Setting the Optimal Price 8-20

      Appendix 8A: Absorption-Cost and Variable-Cost Pricing 8-22

      Absorption-Cost Pricing 8-23

      Variable-Cost Pricing 8-24

      Appendix 8B: Transfers Between Divisions in Different Countries 8-26

      Data Analytics in Action 8-45

      9 Budgetary Planning 9-1

      What’s in Your Cupcake?: Erin McKennaʼs Bakery NYC 9-1

      Effective Budgeting and the Master Budget 9-3

      Budgeting and Accounting 9-3

      The Benefits of Budgeting 9-3

      Essentials of Effective Budgeting 9-4

      The Master Budget 9-7

      Sales, Production, and Direct Materials Budgets 9-8

      Sales Budget 9-8

      Production Budget 9-10

      Direct Materials Budget 9-10

      Direct Labor, Manufacturing Overhead, and S&A Expense Budgets 9-14

      Direct Labor Budget 9-14

      Manufacturing Overhead Budget 9-15

      Selling and Administrative Expense Budget 9-15

      Budgeted Income Statement 9-16

      Data Analytics Insight: That’s Some Tasty Data! 9-17

      Cash Budget and Budgeted Balance Sheet 9-18

      Cash Budget 9-18

      Budgeted Balance Sheet 9-21

      Budgeting in Nonmanufacturing Companies 9-23

      Merchandisers 9-23

      Service Companies 9-24

      Not-for-Profit Organizations 9-25

      Data Analytics in Action 9-48

      10 Budgetary Control and Responsibility Accounting 10-1

      Pumpkin Madeleines and a Movie: The Roxy Hotel Tribeca 10-1

      Budgetary Control and Static Budget Reports 10-3

      Budgetary Control 10-3

      Static Budget Reports 10-4

      Flexible Budget Reports 10-7

      Why Flexible Budgets? 10-7

      Developing the Flexible Budget 10-9

      Flexible Budget—A Case Study 10-10

      Flexible Budget Reports 10-12

      Data Analytics Insight: These Forecasts Move with the Times! 10-13

      Responsibility Accounting and Responsibility Centers 10-14

      Controllable versus Noncontrollable Revenues and Costs 10-16

      Principles of Performance Evaluation 10-16

      Data Analytics Insight: Hitting the Road with Zero-Based Budgeting 10-18

      Responsibility Reporting System 10-18

      Types of Responsibility Centers 10-19

      Investment Centers 10-24

      Return on Investment (ROI) 10-24

      Responsibility Report 10-25

      Alternative Measures of ROI Inputs 10-26

      Improving ROI 10-26

      Appendix 10A: ROI versus Residual Income 10-30

      Residual Income Compared to ROI 10-31

      Residual Income Weakness 10-31

      Data Analytics in Action 10-52

      11 Standard Costs and Balanced Scorecard 11-1

      80,000 Different Caffeinated Combinations: Starbucks 11-2

      Overview of Standard Costs 11-3

      Distinguishing Between Standards and Budgets 11-4

      Setting Standard Costs 11-4

      Direct Materials Variances 11-8

      Analyzing and Reporting Variances 11-8

      Calculating Direct Materials Variances 11-10

      Direct Labor and Manufacturing Overhead Variances 11-13

      Direct Labor Variances 11-13

      Data Analytics Insight: Speedy Data to the Rescue! 11-16

      Manufacturing Overhead Variances 11-16

      Variance Reports and Balanced Scorecards 11-18

      Reporting Variances 11-18

      Income Statement Presentation of Variances 11-19

      Balanced Scorecard 11-20

      Appendix 11A: Standard Cost Accounting System 11-24

      Journal Entries 11-24

      Ledger Accounts 11-26

      Appendix 11B: Overhead Controllable and Volume Variances 11-26

      Overhead Controllable Variance 11-27

      Overhead Volume Variance 11-28

      Data Analytics in Action 11-47

      12 Planning for Capital Investments 12-1

      Floating Hotels: Holland America Line 12-2

      Capital Budgeting and Cash Payback 12-3

      Cash Flow Information 12-3

      Illustrative Data 12-4

      Cash Payback 12-4

      Net Present Value Method 12-6

      Equal Annual Cash Flows 12-7

      Unequal Annual Cash Flows 12-8

      Choosing a Discount Rate 12-9

      Simplifying Assumptions 12-10

      Comprehensive Example 12-10

      Capital Budgeting Challenges and Refinements 12-12

      Intangible Benefits 12-12

      Profitability Index for Mutually Exclusive Projects 12-14

      Risk Analysis 12-15

      Post-Audit of Investment Projects 12-16

      Internal Rate of Return 12-17

      Comparing Discounted Cash Flow Methods 12-18

      Annual Rate of Return 12-20

      Data Analytics Insight: Increasing the Chances of Gaming Wins 12-21

      Data Analytics in Action 12-37

      13 Statement of Cash Flows 13-1

      Got Cash?: Microsoft 13-2

      Usefulness and Format of the Statement of Cash Flows 13-3

      Usefulness of the Statement of Cash Flows 13-3

      Classification of Cash Flows 13-3

      Significant Noncash Activities 13-4

      Format of the Statement of Cash Flows 13-5

      Preparing the Statement of Cash Flows—Indirect Method 13-6

      Indirect and Direct Methods 13-7

      Indirect Method—Computer Services Company 13-7

      Step 1: Operating Activities 13-9

      Summary of Conversion to Net Cash Provided by Operating Activities—Indirect Method 13-12

      Step 2: Investing and Financing Activities 13-13

      Step 3: Net Change in Cash 13-15

      Analyzing the Statement of Cash Flows 13-17

      Free Cash Flow 13-17

      Appendix 13A: Statement of Cash Flows—Direct Method 13-20

      Step 1: Operating Activities 13-20

      Step 2: Investing and Financing Activities 13-26

      Step 3: Net Change in Cash 13-27

      Appendix 13B: Worksheet for the Indirect Method 13-27

      Preparing the Worksheet 13-28

      Appendix 13C: Statement of Cash Flows—T-Account Approach 13-32

      14 Financial Analysis: The Big Picture 14-1

      It Pays to Be Patient: Warren Buffett 14-2

      Sustainable Income and Quality of Earnings 14-3

      Sustainable Income 14-3

      Quality of Earnings 14-7

      Horizontal Analysis and Vertical Analysis 14-9

      Horizontal Analysis 14-10

      Vertical Analysis 14-12

      Ratio Analysis 14-15

      Liquidity Ratios 14-16

      Solvency Ratios 14-17

      Profitability Ratios 14-17

      Financial Analysis and Data Analytics 14-18

      Comprehensive Example of Ratio Analysis 14-18

      Appendix A Time Value of Money A-1

      Interest and Future Values A-2

      Nature of Interest A-2

      Future Value of a Single Amount A-3

      Future Value of an Annuity A-5

      Present Values A-8

      Present Value Variables A-8

      Present Value of a Single Amount A-9

      Present Value of an Annuity A-11

      Time Periods and Discounting A-13

      Present Value of a Long-Term Note or Bond A-13

      Capital Budgeting Situations A-16

      Using Financial Calculators A-18

      Present Value of a Single Sum A-19

      Present Value of an Annuity A-19

      Future Value of a Single Sum A-20

      Future Value of an Annuity A-20

      Internal Rate of Return A-20

      Useful Applications of the Financial Calculator A-21

      Cases For Management Decision-Making (Available in Wiley’s online course.)

      Company Index I-1

      Subject Index I-3

      Rapid Review: Chapter Content

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