by Hartgraves, Morse
ISBN: 978-1-61853-096-7 | Copyright 2015Tabs
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.
Managerial Accounting includes several special features specifically designed to engage students and help them succeed in this course.
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:
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:
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:
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:
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:
|Chapter 1||ModCloth||Chapter 7||Whole Foods|
|Chapter 2||Square||Chapter 8||Roku|
|Chapter 3||DuPont||Chapter 9|
|Chapter 4||Uber||Chapter 10||Southwest Airlines|
|Chapter 5||Samsung||Chapter 11||Volkswagen|
|Module 6||Unilever||Chapter 12||Amazon|
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|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)|
Last Updated: Jan 4 2016
Last Updated: Jan 12 2017
Brief practice quizzes by chapter.
Practice Quiz Solutions
Last Updated: Jan 12 2017
Solutions to Student Practice Quizzes.
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