Accounting Principles: A Business Perspective, Managerial ...

Accounting Principles: Managerial Accounting

A Textbook Equity Open College Textbook originally by

Hermanson, Edwards, and Ivancevich

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License: CC-BY-NC-SA

ISBN-13: 978-1461130239 ISBN-10: 1461130239

About This Publication

Simply put, you may copy, print, redistribute, and re-purpose this textbook or parts of this textbook provided that you give attribution (credit) to Textbook Equity, and provided that any derivative work has the same Creative Commons license (CC-BY-NC-SA). That's it.

Textbook Equity, in turn, provides attribution, with thanks, to the Global Text Project, who provided the source textbook.

Consistent with it's strategic mission to provide free and low-cost textbooks, this is Textbook Equity's derivative work based on "Accounting Principles: A Business Perspective First Global Text Edition, Volume 2 Managerial Accounting", utilizing the permissions granted by it's Creative Commons license. Global Text Project nor the original authors endorse or are responsible in any way for this printing or it's contents.

Textbook Provenance (1998 - 2011)

1998 Edition Accounting: A Business Perspective (Irwin/Mcgraw-Hill Series in Principles of Accounting) [Hardcover] Roger H. Hermanson (Author), James Don Edwards (Author), Michael W. Maher (Author) Eighth Edition

Hardcover: 944 pages

Publisher: Richard D Irwin; Sub edition (April 1998)

Language: English

ISBN-10: 0075615851

ISBN-13: 978-0075615859

Product Dimensions: 11.1 x 8.7 x 1.8 inches

Current Hardbound Price $140.00 ()

2010 Editions () Global Text Project Conversion to Creative Commons License CC-BY "Accounting Principles: A Business Perspective First Global Text Edition, Volume 1 Financial Accounting", by Hermanson, Edwards, and Maher, Revision Editor: Donald J. McCubbrey, PhD.

PDF Version, 817 pages, Free Download

"Accounting Principles: A Business Perspective First Global Text Edition, Volume 2 Managerial Accounting", by Hermanson, Edwards, and Ivancevich. Revision Editor: Donald J. McCubbrey, PhD.

PDF Version Volume 2, 262 pages, Free Download

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2011 Editions () Textbook Equity publishes this soft cover version using a the CC-BY-NC-SA license. They divided Volume 1 into two sections to fit paperback publishing requirements and made other formatting changes. No content changes were made to Global Text's version. Versions available at the Open College Textbook repository:

? PDF Version, Section 1 of Volume 1 (Chapters 1 ? 8), 436 pages, Free Download ? Textbook Equity Paperback, Principles of Accounting, Volume 1 ,Financial Accounting

(Chapters 1 ? 8), 436 pages, List Price $24.95 ? PDF Version, Financial Accounting (Chapters 9 ? 18), Free Download ? Textbook Equity Paperback, Principles of Accounting, Volume 1 , Financial Accounting

(Chapters 9 ? 18), List Price $14.95 ? PDF Version, Accounting Principles: Managerial Accounting, Free Download ? Textbook Equity Paperback, Accounting Principles: Managerial Accounting, 316 pages,

(chapters 19 ? 26 of the original volume). List Price $24.95 For original author information and acknowledgments see

Updated April 27, 2011

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Contents (Cont' from Vol 1," Financial Accounting")

19 Process: Cost systems...............................................................................................9 19.1 Learning objectives............................................................................................9 19.2 Nature of a process cost system........................................................................9 19.3 Process costing illustration..............................................................................11 19.4 Process costing in service organizations.........................................................22 19.5 Spoilage............................................................................................................22 19.6 Understanding the learning objectives...........................................................23 19.7 Appendix 19A: The FIFO process cost method..............................................25 19.8 FIFO process costing--An illustration...........................................................26 19.9 Appendix 19B: Allocation of joint costs..........................................................30 19.10 Demonstration problem................................................................................32 19.11 Solution to demonstration problem..............................................................32 19.12 Key terms.......................................................................................................33 19.13 Self-test...........................................................................................................34 19.14 Questions.......................................................................................................36 19.15 Exercises.........................................................................................................37 19.16 Problems........................................................................................................38 19.17 Alternate problems........................................................................................40 19.18 Beyond the numbers--Critical thinking........................................................41 19.19 Using the Internet--A view of the real world...............................................43 19.20 Answers to self-test.......................................................................................44 19.21 Comprehensive review problem....................................................................44

20 Using accounting for quality and cost management.............................................47 20.1 Learning objectives..........................................................................................47 20.2 Importance of good accounting information.................................................47 20.3 Quality and the new production environment..............................................48 20.4 Improving quality...........................................................................................48 20.5 Quality and customer satisfaction measures.................................................52 20.6 Just-in-time method.......................................................................................57 20.7 Activity-based costing and management.......................................................62 20.8 Methods used for activity-based costing.......................................................65 20.9 Impact of new production environment on cost drivers...............................71 20.10 Activity-based costing in marketing.............................................................71 20.11 Strategic use of activity-based management.................................................72 20.12 Behavioral and implementation issues.........................................................72 20.13 Opportunities to improve activity-based costing in practice.......................73 20.14 Understanding the learning objectives.........................................................73 20.15 Demonstration problem................................................................................74 20.16 Solution to demonstration problem.............................................................75 20.17 Key terms.......................................................................................................76

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20.18 Self-test..........................................................................................................76 20.19 Questions.......................................................................................................78 20.20 Exercises.......................................................................................................79 20.21 Problems........................................................................................................82 20.22 Alternate problems.......................................................................................85 20.23 Beyond the numbers--Critical thinking.......................................................87 20.24 Using the Internet--A view of the real world..............................................89 20.25 Answers to self-test.......................................................................................89

21 Cost-volume-profit analysis....................................................................................91 21.1 Learning objectives..........................................................................................91 21.2 A manager's perspective..................................................................................91 21.3 Cost behavior patterns....................................................................................92 21.4 Methods for analyzing costs............................................................................96 21.5 Cost-volume-profit (CVP) analysis.................................................................98 21.6 Finding the break-even point........................................................................100 21.7 Cost-volume-profit analysis illustrated........................................................104 21.8 Assumptions made in cost-volume-profit analysis......................................107 21.9 Using computer spreadsheets for CVP analysis...........................................107 21.10 Effect of automation on cost-volume-profit analysis.................................109 21.11 Understanding the learning objectives........................................................110 21.12 Demonstration problem ...............................................................................111 21.13 Solution to demonstration problem ............................................................111 21.14 Key terms*.....................................................................................................112 21.15 Self-test.........................................................................................................113 21.16 Questions......................................................................................................114 21.17 Exercises........................................................................................................115 21.18 Problems.......................................................................................................117 21.19 Alternate problems......................................................................................120 21.20 Beyond the numbers--Critical thinking.....................................................122 21.21 Using the Internet--A view of the real world..............................................124 21.22 Answers to self-test......................................................................................124

22 Short-term decision making: Differential analysis..............................................126 22.1 Learning objectives........................................................................................126 22.2 Contribution margin income statements.....................................................126 22.3 Differential analysis......................................................................................128 22.4 Applications of differential analysis..............................................................131 22.5 Applying differential analysis to quality.......................................................137 22.6 Understanding the learning objectives........................................................138 22.7 Demonstration problem................................................................................140 22.8 Solution to demonstration problem.............................................................140 22.9 Key terms*......................................................................................................141 22.10 Self-test.........................................................................................................141

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