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Management Accounting
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Management Accounting



December 2024 | 448 pages | Cambridge Business Publishers
Formerly published by Cambridge Business Publishers, now published by Sage 

Management Accounting, Information for Decision Making, Seventh Edition prepares undergraduate and graduate business students to use management accounting information to make decisions that align organizations with strategic goals, drive continuous process improvement, and create sustainable value. Unlike traditional management accounting texts organized as a collection of disconnected topics, this book presents a coherent, unified structure built around the four perspectives of the balanced scorecard: financial, customer, internal process, and learning and growth. Content flows logically across chapters, showing how measurement systems support strategy formulation, execution, and control.

Written by leading scholars with extensive advisory experience across private, nonprofit, and public-sector organizations, the text emphasizes real managerial decisions. Students engage with practical problems and cases drawn from professional practice, including materials from the Institute of Management Accountants and Harvard Business School, making the book an excellent fit for management-oriented accounting courses.

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About the Authors
 
Preface
 
Brief Table of Contents
 
Contents
 
Chapter 1: How Management Accounting Information Supports Decision Making
What Is Management Accounting?

 
The Balanced Scorecard: Management Accounting’s Solution for Measuring Intangible Assets

 
Behavioral Implications of Management Accounting Information

 
Summary

 
Key Terms

 
Assignment Materials

 
Questions

 
Exercises

 
Problems

 
Cases

 
 
Chapter 2: Using Costs in Decision Making
How Management Accounting Supports Internal Decision Making

 
Important Cost Terms

 
Cost Behavior Estimation

 
Cost-Volume-Profit Analysis

 
The Multi Product Firm

 
Epilogue to Kitchen Magic

 
Summary

 
Key Terms

 
Assignment Materials

 
Questions

 
Exercises

 
 
Chapter 3: Decision Making and Management Accounting Information
Cost Definitions Important in Decision Making

 
Relevant Cost Analysis in Decision Making

 
Epilogue to Iris Company

 
Key Terms

 
Assignment Materials

 
Questions

 
Exercises

 
Problems

 
Cases

 
 
Chapter 4: Accumulating and Assigning Costs to Products
Cost Management Systems

 
Going Forward

 
Handling Indirect Costs in a Manufacturing Environment

 
Cost Pool Homogeneity

 
Overhead Allocation: Further Issues

 
Job Order Costing Systems

 
Process Costing Systems

 
Epilogue to Lin’s Custom Framing

 
Summary

 
Appendix 4-1

 
Key Terms

 
Assignment Materials

 
Questions

 
Exercises

 
Problems

 
Cases

 
 
Chapter 5: Activity-Based Costing Systems
Traditional Manufacturing Costing Systems

 
Limitations of Madison’s Existing Standard Cost System

 
Activity-Based Costing

 
Service Companies

 
Implementation Issue

 
Epilogue to Madison Dairy

 
Summary

 
Appendix 5-1

 
Key Terms

 
Assignment Materials

 
Questions

 
Exercises

 
Problems

 
Cases

 
 
Chapter 6: Measuring and Managing Customer Relationships
Measuring Customer Profitability: Extending the Madison Dairy Case

 
Increasing Customer Profitability

 
Salesperson Incentives

 
Life-Cycle Profitability

 
Measuring Customer Performance with Nonfinancial Metrics

 
Epilogue to Madison Dairy

 
Summary

 
Key Terms

 
Assignment Materials

 
Questions

 
Exercises

 
Problems

 
Cases

 
 
Chapter 7: Measuring and Managing Process Performance
Process Perspective and Management Accounting Information

 
Facility Layout Systems

 
Inventory Costs and Processing Time

 
Cost of Nonconformance and Quality Issues

 
Just-in-Time Manufacturing

 
Kaizen Costing

 
Benchmarking

 
Epilogue to Blast from the Past Robot Company

 
Summary

 
Key Terms

 
Assignment Materials

 
Questions

 
Exercises

 
Problems

 
Cases

 
 
Chapter 8: Measuring and Managing Innovation and Life-Cycle Costs
Managing Products over Their Life Cycle

 
Breakeven Time: A Comprehensive Metric for New Product Development

 
Measuring Innovation

 
Environmental Costing

 
Summary

 
Key Terms

 
Assignment Materials

 
Questions

 
Exercises

 
Problems

 
Cases

 
 
Chapter 9: Behavioral and Organizational Issues in Management Accounting and Control Systems
What Are Management Accounting and Control Systems?

 
Characteristics of a Well-Designed MACS

 
The Human Resource Management Model of Motivation

 
The Organization’s Ethical Code of Conduct and MACS Design

 
Motivation and Congruence

 
Using a Mix of Performance Measures: A Balanced Scorecard Approach

 
Empowering Employees to Be Involved in MACS Design

 
Behavioral Aspects of MACS Design: An Example from Budgeting

 
Developing Appropriate Incentive Systems to Reward Performance

 
Epilogue to Advanced Cellular International and Chapter Summary

 
Key Terms

 
Assignment Materials

 
Questions

 
Exercises

 
Problems

 
Cases

 
 
Chapter 10: The Balanced Scorecard and Strategy Map
The Balanced Scorecard

 
Strategy

 
Balanced Scorecard Objectives, Measures, and Targets

 
Creating a Strategy Map

 
Strategy Map and Balanced Scorecard at Pioneer Petroleum

 
Applying the Balanced Scorecard to Nonprofit and Government Organizations

 
Barriers to Effective Use of the Balanced Scorecard

 
Epilogue to Pioneer Petroleum

 
Summary

 
Key Terms

 
Assignment Materials

 
Questions

 
Exercises

 
Problems

 
Cases

 
 
Chapter 11: Using Budgets for Planning and Coordination
Determining the Levels of Capacity-Related and Flexible Resources

 
The Budgeting Process

 
Behavioral Considerations in Budgeting

 
The Budgeting Process Illustrated

 
What-If Analysis

 
Comparing Actual and Planned Results

 
Sales Variances

 
The Role of Budgeting in Service and Not-for-Profit Organizations

 
Periodic and Continuous Budgeting

 
Controlling the Discretionary Expenditures

 
Managing the Budgeting Process

 
Southwest Regional Health Center-Epilogue

 
Summary

 
Key Terms

 
Assignment Materials

 
Questions

 
Exercises

 
Problems

 
Cases

 
 
Chapter 12: Financial Control
The Environment of Financial Control

 
Financial Control

 
The Motivation for Decentralization

 
Responsibility Centers and Evaluating Unit Performance

 
Transfer Pricing

 
Assigning and Valuing Assets in Investment Centers

 
The Efficiency and Productivity Elements of Return on Investment

 
The Efficacy of Financial Control

 
Epilogue to Adrian’s Home Services

 
Summary

 
Key Terms

 
Assignment Materials

 
Questions

 
Exercises

 
Problems

 
Cases

 
 
Index
Key features
NEW TO THIS EDITION:
  • Expanded and updated coverage of time-driven activity-based costing (TDABC), including applications in health care.
  • New and revised cases drawn from real organizational settings, including professional and academic sources.
  • Enhanced integration of customer profitability and customer performance measurement.
  • Continued refinement of the balanced scorecard and strategy map framework across chapters.
KEY FEATURES:
  • Balanced Scorecard Framework: Organizes management accounting around the financial, customer, process, and learning and growth perspectives.
  • Unified, Coherent Structure: Presents management accounting as an integrated system rather than a series of isolated topics.
  • Decision-Making Orientation: Emphasizes how managers use accounting information to support strategy, operations, and performance improvement.
  • Traditional and Modern Costing: Covers traditional costing methods alongside time-driven activity-based costing.
  • Customer Profitability Focus: Dedicated chapter on customer costing, profitability, and performance measurement.
  • Process Improvement Emphasis: In-depth treatment of process costing, life-cycle costing, environmental costing, and innovation costing.
  • Employee Motivation and Alignment: Addresses measurement systems that support employee engagement and organizational learning.
  • Strategy Maps and BSC Implementation: Demonstrates how to design and align metrics to execute strategy.
  • Planning and Control Coverage: Includes budgeting, responsibility centers, and financial control systems.
  • Business Scenarios: Each chapter opens with a realistic business scenario and concludes with an applied epilogue.
  • In Practice Boxes: Real-world examples illustrate how managers apply concepts in organizational settings.
  • Managerially Relevant Cases: Includes cases from professional practice and leading business schools.