[...]... information exceed the costs? Exhibit 1-1 summarizes the major differences between management accounting and financial accounting Note, however, that reports such as balance sheets, income statements, and statements of cash flows are common to both management accounting and financial accounting Cost accounting provides information for management accounting and financial accounting Cost accounting measures,... from accounting systems helps managers to manage costs, but the information and the accounting systems themselves are not cost management Cost management has a broad focus and is not only about reduction in costs Cost management includes decisions to incur additional costs, for example to improve Exhibit 1-1 Major Differences Between Management and Financial Accounting Management Accounting Financial Accounting. .. to the costs of acquiring or using resources in an organization For example, calculating the cost of a product is a cost accounting function that answers financial accounting s inventory-valuation needs and management accounting s decision-making needs (such as deciding how to price products and choosing which products to promote) Modern cost accounting takes the perspective that collecting cost information... FIFO Methods 620 Transferred-In Costs in Process Costing 621 Transferred-In Costs and the Weighted-Average Method 622 Transferred-In Costs and the FIFO Method 624 Points to Remember About Transferred-In Costs 625 Hybrid Costing Systems 626 Overview of Operation-Costing Systems 626 Concepts in Action: Hybrid Costing for Customized Shoes at Adidas Illustration of an Operation-Costing System 627 Journal Entries... Product Costing 718 Backflush Costing 718 Simplified Normal or Standard Costing Systems 718 Accounting for Variances 722 Special Considerations in Backflush Costing 726 Lean Accounting 726 Problem for Self-Study 728 | Decision Points 729 | Terms to Learn 730 | Assignment Material 731 | Questions 731 | Exercises 731 | Problems 734 | Collaborative Learning Problem 737 21 Capital Budgeting and Cost Analysis... Genentech, and Google Preface Studying Cost Accounting is one of the best business investments a student can make Why? Because success in any organization—from the smallest corner store to the largest multinational corporation—requires the use of cost accounting concepts and practices Cost accounting provides key data to managers for planning and controlling, as well as costing products, services, even customers... study of modern cost accounting yields insights into how managers and accountants can contribute to successfully running their businesses It also prepares them for leadership roles Many large companies, such as Constellation Energy, Jones Soda, Nike, and the Pittsburgh Steelers, have senior executives with accounting backgrounds Financial Accounting, Management Accounting, and Cost Accounting As many... Management Accounting Literature Award Rajan has served as the Departmental Editor for Accounting at Management Science, as well as associate editor for both the accounting and operations areas From 2002 to 2008, Rajan served as an editor of The Accounting Review He is also currently an associate editor for the Journal of Accounting, Auditing and Finance Rajan is a member of the management accounting. .. in financial statements Learning Objective 1 Distinguish financial accounting reporting on past performance to external users from management accounting helping managers make decisions 4 ᭹ CHAPTER 1 THE MANAGER AND MANAGEMENT ACCOUNTING Decision Point How is management accounting different from financial accounting? Management accounting measures, analyzes, and reports financial and nonfinancial... concepts in action boxes focus on the service sector such as activity-based costing at Charles Schwab (Chapter 5) and managing wireless data bottlenecks (Chapter 19) New Cutting Edge Topics The pace of change in organizations continues to be rapid The fourteenth edition of Cost Accounting reflects changes occurring in the role of cost accounting in organizations ᭹ We have introduced foreign currency and . 25 2 An Introduction to Cost Terms and Purposes 26 GM Collapses Under the Weight of its Fixed Costs Costs and Cost Terminology 27 Direct Costs and Indirect Costs 28 Challenges in Cost Allocation 29 Factors. 33 Relationships of Types of Costs 34 Total Costs and Unit Costs 35 Unit Costs 35 Use Unit Costs Cautiously 35 Business Sectors, Types of Inventory, Inventoriable Costs, and Period Costs 36 Manufacturing-,. Manufacturing Costs 37 Inventoriable Costs 37 Period Costs 38 Illustrating the Flow of Inventoriable Costs and Period Costs 39 Manufacturing-Sector Example 39 Recap of Inventoriable Costs and Period Costs