There is a new edition of this book available Managerial Accounting, 8e.

Managerial Accounting, 7e

by Hartgraves, Morse

ISBN: 978-1-61853-096-7 | Copyright 2015

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Welcome to the seventh edition of Managerial Accounting. Our book presents managerial accounting in the context of a big-picture, decision oriented, business setting. It integrates traditional coverage with contemporary topics, and does so with an eye toward the general business student because a book is not useful if it is not read. An overriding aim of our book is to engage students to read further and understand the materials presented.

Approach and Emphasis

Managerial accounting focuses on using financial and nonfinancial information by managers and associates of a firm to make strategic, organizational, and operational decisions. Our book provides a framework for identifying and analyzing decision alternatives and for evaluating success or failure in accomplishing such organizational goals. Although accountants are important in the managerial accounting process, managerial accounting is more about managerial tools than processes. In our era of global competition, continuous improvement, process reengineering, and employee empowerment; the tools of managerial accounting are used by decision makers at all levels, rather than just by "managers." One goal of our book is to introduce students to this reality.

Our book is written for all students—not just accounting students. We place managerial accounting in a broad business context, relating it to other business areas. We also avoid details that are appropriate for advanced cost accounting books. Like the trunk of a tree, our book serves as a strong base for students' future knowledge growth and as a means of unifying the branches of business management.

We emphasize the use of managerial accounting information for decision making within the context of organizational strategy. The organization and content of our book reflect our belief that students who understand the big picture are better learners, are better decision makers, and are better able to apply what they learn.


Managerial ethics receives extensive coverage in this edition. For example, ethics is introduced in the context of measurement and management in Chapter 1 and discussed further in Chapters 4 and 9. "Business Insight" features and numerous end-of-chapter problems and cases in Chapters 1, 3, 8, 9, 10, and 11 include a variety of decision situations involving ethical dilemmas. The following excerpt is from Chapter 9 and discusses ethical dimensions of the budgeting process:

Because most wrongful activities related to budgeting are unethical, rather than illegal, organizations often have difficulty dealing with them. However, when managers’ actions cross the gray area between ethical and fraudulent behavior, organizations are not reluctant to dismiss employees or even pursue legal actions against them.

Although most managers have a natural inclination to be conservative in developing their budgets, at some level the blatant padding or building slack into the budget becomes unethical. In an extreme case, it might even be considered theft if an inordinate level of budgetary slack creates favorable performance variances that lead to significant bonuses or other financial gain for the manager. Another form of falsifying budgets occurs when managers include expense categories in their budgets that are not needed in their operations and subsequently use the funds to pad other budget categories. The deliberate falsification of budgets is unethical behavior and is grounds for dismissal in most organizations.

Ethical issues might also arise in the reporting of performance results, which usually compares actual data with budgeted data. Examples of unethical reporting of actual performance data include misclassification of expenses, overstating revenues or understating expenses, postponing or accelerating the recording of activities at the end of the accounting period, or creating fictitious activities.

Unique Pedagogy

Managerial Accounting includes several special features specifically designed to engage students and help them succeed in this course.

Business Insights

Students appreciate and become more engaged when they can see the relevance of what they are learning in the classroom. We have revised and added new Business Insight boxes throughout each chapter to bring the accounting to life for students through current, real world examples. The following is a representative example:

business insight

Decision Making Orientation

One primary goal of a managerial accounting course is to teach students the skills needed to apply their accounting knowledge to solve real business problems and make informed business decisions. With that goal in mind, You Make The Call boxes in each chapter encourage students to apply the material presented to solving actual business scenarios. The following is a representative example:

you make the call

Research Insights

Academic research plays an important role in the way business is conducted, accounting is performed, and students are taught. It is important for students to recognize how modern research and modern business practice interact. Therefore, we periodically incorporate relevant research to help students understand the important relation between research and modern business. The following is a representative example:

research insight

Mid-Chapter and Chapter-End Reviews

Managerial accounting can be challenging—especially for students lacking business experience or previous exposure to business courses. To reinforce concepts presented in each chapter and to ensure student comprehension, we include mid-chapter and chapter-end reviews that require students to recall and apply the managerial accounting techniques and concepts described in each chapter. The following is a representative example:

chapter end review

Excellent Assignments

Excellent assignment material is a must-have component of any successful textbook (and class). We went to great lengths to create the best assignments possible. We tried to include assignments that reflect our belief that students should be trained in analyzing accounting information to make business decisions, as opposed to working on mechanical computations. Assignments encourage students to analyze accounting information, interpret it, and apply the knowledge gained to a business decision. There are five categories of assignments: Discussion Questions, Mini Exercises, Exercises, Problems, and Cases and Projects. The following is a representative example:


Changes to the 7th Edition

Many significant changes have been made in the 7th edition, including:

  • myBusinessCourse: This complete learning and homework program is free with new copies of the textbook. myBusinessCourse includes a complete learning path for students. Students will be able to watch electures, and see how representative problems are solved before proceeding to their homework. As the instructor, you can select assignments from the textbook or test bank and have students’ responses automatically graded. You also have access to a robust grade book that provides many course management and diagnostic tools. Whether you teach a complete online course or just want to provide your students with additional resources to master the content, myBusinessCourse will prove to be an invaluable resource for you and your students. See the inside cover of this textbook for more details.
  • Many new Business Insight boxes have replaced older ones.
  • Several new Research Insight Boxes have been incorporated.
  • Dozens of new, real company examples have been integrated throughout the text.
  • Over two-thirds of the exercises and problems have been revised.
  • All 12 Opening Vignettes have been replaced. The following companies are now featured:
Chapter 1 ModCloth Chapter 7 Whole Foods
Chapter 2 Square Chapter 8 Roku
Chapter 3 DuPont Chapter 9 Pinterest
Chapter 4 Uber Chapter 10 Southwest Airlines
Chapter 5 Samsung Chapter 11 Volkswagen
Module 6 Unilever Chapter 12 Amazon

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Expand/Collapse All
Chapter 01: Managerial Accounting: Tools for Decision Making (pg. 2)
Chapter 02: Cost Behavior, Activity Analysis, and Cost Estimation (pg. 30)
Chapter 03: Cost-Volume-Profit Analysis and Planning (pg. 66)
Chapter 04: Relevant Costs and Benefits for Decision Making (pg. 106)
Chapter 05: Product Costing: Job and Process Operations (pg. 131)
Chapter 06: Activity-Based Costing, Customer Profitability, and Activity-Based Management (pg. 196)
Chapter 07: Additional Topics in Product Costing (pg. 236)
Chapter 08: Pricing and Other Product Management Decisions (pg. 266)
Chapter 09: Operational Budgeting and Profit Planning (pg. 296)
Chapter 10: Standard Costs and Performance Reports (pg. 342)
Chapter 11: Segment Reporting, Transfer Pricing, and Balanced Scorecard (pg. 384)
Chapter 12: Capital Budgeting Decisions (pg. 426)
Appendix A: Managerial Analysis of Financial Statements (pg. 471)
Al L. Hartgraves

Al L. Hartgraves

Al L. Hartgraves is Professor Emeritus of Accounting at the Goizueta Business School at Emory University in Atlanta, Georgia. He has been a frequent Guest Professor at Johannes Kepler University in Linz, Austria and at the Helsinki School of Economics and Business Administration in Finland.

His published scholarly and professional articles have appeared in The Accounting Review, Accounting Horizons, Management Accounting, Journal of Accountancy, Journal of Accounting and Public Policy and many other journals. Students at Goizueta Business School have selected him on six occasions to receive the Distinguished Educator Award. In 2002 he received Emory University’s highest teaching award, The Scholar/Teacher Award, and in 2003 he was recognized as the Accounting Educator of the Year by the Georgia Society of CPAs. He has been recognized as an Outstanding Faculty Member in two editions of The Business Week Guide to the Best Business Schools. He is a Certified Public Accountant (inactive) and a Certified Management Accountant, having received the Certificate of Distinguished Performance on the CMA exam. He received his Ph.D. from Georgia State University.

Wayne J. Morse

Wayne J. Morse

Wayne J. Morse, a hiking and canoeing enthusiast, is Professor Emeritus at the Saunders College of Business at Rochester Institute of Technology.

An author or coauthor of more than fifty published papers, monographs, and textbooks, he was a founding member of the Management Accounting section of the American Accounting Association. His most notable writings are in the areas of learning curves, human resource accounting, and quality costs. He was a member of the IMA Committee on Research and an AICPA Board of Examiners subcommittee, and he has served on the editorial boards of Advances in Accounting, Trends in Accounting Education, Issues in Accounting Education, and Management Accounting Research. A Certified Public Accountant, he received his Ph.D. from Michigan State University. Prior to joining RIT, he was on the faculty of the University of Illinois, Duke University, the University of Tennessee, Clarkson University, and the University of Alabama-Huntsville.

Last Updated: Jan 4 2016
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