Management Accounting: Concepts and Strategic Costing Decision
ISBN: 9788126556373
696 pages
eBook also available for institutional users
For more information write to us at: acadmktg@wiley.com
Description
The book focuses on costing decision practices followed and practiced in the industry while taking various business operation decisions. Each chapter highlights the concepts of management accounting and links it to practical decision situations. Besides, there is an exhaustive coverage of new techniques in costing decisions such as Activity-Based Costing, Target Costing, Value Chain System, Price and Profitability Analysis, Balanced Scorecard, Global Perspective of Management Accounting, etc. It is written in an interactive manner which makes the readers understand and grasp the concepts comfortably. The numerical questions, both solved and unsolved, provided in the chapters are attributed towards decision-making situations.
Preface
About the Author
1 Management Accounting Fundamentals
1.1 Beyond Cost Cutting
1.2 Concept of Management and Cost Accounting: An Introduction
1.3 Financial Accounting and Its Features
1.4 Cost Accounting
1.5 Best Practices in Costing System
1.6 Management Accounting
1.7 Management Accounting Information and Their Use
1.8 Practical Implications of Management Accountancy
1.9 Cost Management for Competitive Advantage
1.10 Decision-Making Process in a Firm
1.11 Management Accounting in Global Perspective
1.12 Management Accounting as Profession
1.13 Limitations of Management Accounting
2 Materials Cost Control
2.1 Introduction
2.2 Functions of Material Control Department
2.3 Essential Features of Material Control Process
2.4 Responsibilities of the Purchase Department
2.5 Materials Issue Process
2.6 Material Control Techniques
2.7 Material Pricing Methods
2.8 Quantity of Material Procurement
2.9 Material Management at Stores
2.10 Inventory Control Techniques
3 Labor Cost and Overhead Cost Control
3.1 Introduction
3.2 The Issues Concerned with Labor Cost Control
3.3 Mechanism of Labor Cost Control
3.4 Labor Attrition
3.5 Recording of Timings
3.6 Methods of Work Study
3.7 Methods of Wage Payment
3.8 Overhead Cost Control
4 Cost Concepts, Cost Classification and Unit Cost Analysis
4.1 Introduction
4.2 Cost Classification
4.3 Cost sheet
4.4 Valuation of Closing Stock
4.5 Preparation of Production Account
4.6 Calculation of Cost and Selling Price
4.7 Preparation of Statement of Cost and Abridged Profit and Loss Account
4.8 Calculation of Missing Figures in the Statement of Cost
5 Cost Analysis: Job Order, Batch and Contract Costing
5.1 Introduction
5.2 Job Order Costing
5.3 Batch Costing
5.4 Contract Costing
6 Process Costing and Joint Costing
6.1 Introduction
6.2 Features of Process Costing
6.3 Difference between Process and Job Costing
6.4 Preparation of Process Account
6.5 Process Accounts with Scrap
6.6 Normal Loss, Abnormal Loss and Abnormal Gain
6.7 Joint Products and By-Products
6.8 Difference between Joint Product and By-Product
6.9 Joint Costs
6.10 Methods of Costing of Joint Products
7 Income Recognition under Marginal and Absorption Costing
7.1 Introduction
7.2 Marginal Costing
7.3 Absorption Costing
7.4 Analysis of Difference in Income
7.5 Practical Application of Absorption and Marginal Costing
7.6 Reconciliation of Net Income
8 Cost–Volume–Profit Analysis
8.1 Introduction
8.2 Profit
8.3 Contribution
8.4 Break-even (BE) Analysis
8.5 Application of PV Ratio
8.6 BE Chart
8.7 Uses of CVP Analysis
8.8 Assumptions of BE Analysis
8.9 Limitations of BE Analysis
8.10 Limitations of CVP Analysis
8.11 CVP Analysis
8.12 Multi-Product CVP Analysis
9 Standard Costing and Variance Analysis
9.1 Standard Costing
9.2 Need for Fixing Standards
9.3 Process of Standard Costing
9.4 Factors Determining Standards under Each Cost Component
9.5 Uses of Standard Costing
9.6 Benefits of Standard Costing
9.7 Limitations of Standard Costing
9.8 Relationship between Standard Costing and Budgetary Control
9.9 Standard Costing and Variance Analysis
9.10 Material Yield Variance
9.11 Labor Cost Variances
9.12 Idle Time Variance
9.13 Labor Yield Variance
9.14 Labor Mix Variance
9.15 Overhead Variances
9.16 Analysis of Variances
9.17 Sales Variances
9.18 Variances Based on Profits
9.19 Control Ratios
10 Budget and Budgetary Control System
10.1 Introduction
10.2 Essentials of a Budget Document
10.3 Budget Implementation Process
10.4 Different Kinds of Budget
10.5 Advantages of Budgets and Budgeting Exercise
10.6 Limitations of Budgeting
10.7 Budgetary Control Systems
11 Activity-Based Costing and Target Costing
11.1 Introduction
11.2 Activity-Based Costing
11.3 Rational of Allocation of Costs under an ABC System
11.4 Steps in an ABC System
11.5 Target Costing
12 Responsibility Accounting and Transfer Pricing
12.1 Introduction
12.2 Responsibility Center
12.3 Focus on ROI
12.4 Factors Affecting Responsibility Center’s Performance
12.5 Transfer Pricing
13 Strategic Costing Decisions
13.1 Introduction
13.2 Life Cycle Costing
13.3 Stages of LCC
13.4 Product Life Cycle Stages
13.5 Assessment of Life Cycle Costs
13.6 Important Components of LCC
13.7 Value Chain System
13.8 Utilization of Internal Linkages: A Case
13.9 Internal Value Chain Linkages
13.10 Internal Linkage: A Case Analysis
13.11 Throughput Accounting
13.12 A Plus and Minus Approach
14 Pricing Decisions and Strategies
14.1 Introduction
14.2 Objectives of Pricing
14.3 Factors Affecting Pricing Decisions
14.4 Cost Factors and Pricing
14.5 Pricing and Contribution
14.6 Pricing Methods in Practice
15 Short-Term Decision-Making Strategies
15.1 Introduction
15.2 Essentials of the Decision-Making Process
15.3 Cost–Benefit Analysis
15.4 Relevant and Irrelevant Costs and Benefits
15.5 Key Limiting Factor
15.6 Decision to Accept or Reject
15.7 Outsourcing Decisions
15.8 Add or Drop a Product
15.9 Joint Products (Decision to Sell Now or Process Further)
15.10 Product Mix Decisions
16 Management Accounting in Global Perspective
16.1 Introduction
16.2 Activity as a Focus
16.3 Change in Focus
16.4 Management Accounting in a Competitive World
16.5 Management Accounting and Global Environment
16.6 Global Management Accounting Principles
16.7 Management Accounting and Developed Costing Systems
16.8 Modern Cost Management Systems
17 Balanced Scorecard and Performance Evaluation
17.1 Introduction
17.2 Concept of Balanced Scorecard
17.3 Balanced Scorecard and Performance Evaluation
17.4 Design of a Balanced Scorecard
17.5 Variants of Balanced Scorecard
17.6 Decentralized Operations
17.7 Performance Measurement Techniques
17.8 Comparison of Balanced Scorecard and Self-Assessment for Business Excellence
17.9 Six Sigma Philosophy
18 Financial Statement Analysis
18.1 Introduction
18.2 Accounting Statements and Financial Analysis
18.3 Important Factors Impacting Communication of useful Information
18.4 Information Analysis
18.5 Ratio Analysis of Financial Statements
18.6 Advantages of Financial Ratio Analysis
18.7 Limitations of Financial Ratio Analysis
18.8 Summary of Financial Ratios
Additional Solved Problems
Summary
Key words
Review Questions
True or False
Fill in the Blanks
Problems for Practice
Case Analyses
Index