Fundamentals Of Cost Accounting

by Maher, Michael W.; Lanen, William N.; Rajan, Madhav V.

• ISBN13: 9780073018379
• ISBN10: 0073018376
• Format: Hardcover
• Copyright: 2004-12-30
• Publisher: McGraw-Hill/Irwin

Summary

A direct, realistic, and efficient way to learn cost accounting. Fundamentals is short (736 pages) making it easy to cover in one semester. The authors have kept the text concise by focusing on the key concepts students need to master. Opening vignettes and In Action boxes show realistic applications of these concepts throughout. The Topic Tackler CD reinforces this realism with video clips of different businesses that use cost accounting. Comprehensive end-of-chapter problems plus Homework Manager provide students with all the practice they need to fully learn each concept.

Table of Contents

Cost Accounting: Information for Decision Making	2	(26)
Value Creation in Organizations	3	(1)
Value Chain	3	(1)
Supply Chain	4	(1)
Role of Information in the Organization	4	(2)
The Manager's Job Is to Make Decisions	4	(1)
Decision Making Requires Information	4	(1)
Managers Are Not Owners	5	(1)
Using Cost Information to Increase Value	5	(1)
In Action: Palliative Care Unit	5	(1)
Finding and Eliminating Activities That Don't Add Value	5	(1)
Strategic Cost Analysis	6	(1)
Cost Data For Managerial Decisions	6	(4)
Costs for Decision Making	6	(1)
Costs for Control and Evaluation	7	(2)
Different Data for Different Decisions	9	(1)
Accounting Systems	10	(2)
Financial Accounting	10	(1)
Cost Accounting	10	(1)
Cost Accounting and GAAP	11	(1)
Customers of Cost Accounting	11	(1)
Ethical Issues and Cost Accounting	12	(1)
Trends in Cost Accounting	12	(3)
Cost Accounting in High-Tech Production Settings	12	(1)
Just-in-Time Methods	13	(1)
Lean Production	13	(1)
Emphasis on Quality	13	(1)
Benchmarking and Continuous Improvement	13	(1)
Activity-Based Costing and Management	13	(1)
Enterprise Resource Planning	14	(1)
Six Sigma	14	(1)
Performance Measurement	14	(1)
Creating Value in the Organization	14	(1)
Key Financial Players in the Organization	15	(1)
Choices: Ethical Issues for Accountants	16	(2)
What Makes Ethics So Important?	16	(1)
In Action: Channel Surfing	16	(1)
What Should You Do If You Discover Unethical Conduct?	17	(1)
Sarbanes-Oxley Act of 2002 and Ethics	17	(1)
Cost Accounting and Other Business Disciplines	18	(10)
Summary	18	(1)
Key Terms	19	(1)
Appendix 1A: Institute of Management Accountants Code of Ethics	19	(2)
Review Questions	21	(1)
Critical Analysis and Discussion Questions	21	(1)
Exercises	22	(1)
Problems	23	(3)
Solutions to Self-Study Questions	26	(2)
Cost Concepts and Behavior	28	(38)
What is a Cost?	29	(1)
Cost versus Expenses	30	(1)
Presentation of Costs in Financial Statements	30	(5)
Service Organizations	31	(1)
Retail and Wholesale Companies	31	(2)
Manufacturing Companies	33	(1)
Direct and Indirect Product Manufacturing (Product) Costs	33	(1)
Prime Costs and Conversion Costs	34	(1)
Nonmanufacturing (Period) Costs	34	(1)
Cost Allocation	35	(2)
Direct versus Indirect Costs	36	(1)
Details of Manufacturing Cost Flows	37	(1)
How Costs Flow Through the Statements	38	(3)
Income Statements	38	(1)
Cost of Goods Sold	38	(1)
Direct Materials	39	(1)
Work in Process	39	(1)
Finished Goods Inventory	40	(1)
Cost of Goods Sold Statement	40	(1)
Cost Behavior	41	(2)
Fixed versus Variable Costs	41	(2)
Components of Product Costs	43	(5)
Unit Fixed Costs Can Be Misleading for Decision Making	44	(4)
How to Make Cost Information More Useful for Managers	48	(18)
Gross Margin versus Contribution Margin Income Statements	48	(1)
Developing Financial Statements for Decision Making	48	(2)
Summary	50	(1)
Key Terms	51	(1)
Review Questions	51	(1)
Critical Analysis and Discussion Questions	52	(1)
Exercises	52	(7)
Problems	59	(4)
Solutions to Self-Study Questions	63	(3)
Fundamentals of Cost Analysis for Decision Making	66	(40)
Cost-Volume-Profit Analysis	67	(10)
Profit Equation	67	(2)
CVP Example	69	(2)
Graphic Presentation	71	(1)
Profit-Volume Model	72	(1)
Use of CVP to Analyze the Effect of Different Cost Structures	73	(2)
Margin of Safety	75	(1)
CVP Analysis with Spreadsheets	75	(1)
Extensions of the CVP Model	76	(1)
Income Taxes	76	(1)
Multiproduct CVP Analysis	76	(1)
Differential Analysis	77	(6)
Differential Costs versus Total Costs	78	(1)
Differential Analysis and Pricing Decisions	79	(1)
Short-Run versus Long-Run Pricing Decisions	79	(1)
Short-Run Pricing Decisions: Special Orders	80	(1)
Long-Run Pricing Decisions	81	(1)
Long-Run versus Short-Run Pricing: Is There a Difference?	82	(1)
Cost Analysis for Pricing	82	(1)
Use of Differential Analysis for Production Decisions	83	(23)
Make-It or Buy-It Decisions	83	(1)
Make-or-Buy Decisions Involving Differential Fixed Costs	83	(3)
Opportunity Costs of Making	86	(1)
Decision to Add or Drop a Product Line or Close a Business Unit?	87	(1)
Product Choice Decisions	88	(2)
Summary	90	(1)
Key Terms	91	(1)
Appendix: Theory of Constraints	91	(1)
Review Questions	92	(1)
Critical Analysis and Discussion Questions	93	(1)
Exercises	93	(5)
Problems	98	(5)
Solutions to Self-Study Questions	103	(3)
Cost Estimation	106	(32)
Why Estimate Costs?	107	(1)
Basic Cost Behavior Patterns	107	(1)
What Methods Are Used to Estimate Cost Behavior?	107	(13)
Engineering Method	108	(1)
Account Analysis Method	108	(2)
Statistical Cost Estimation	110	(6)
In Action: Using Regression to Evaluate Cost Behavior	116	(1)
Multiple Regression	116	(1)
Practical Implementation Problems	117	(1)
In Action: Learning Curves	118	(2)
How is an Estimation Method Chosen?	120	(18)
Data Problems	120	(1)
Effect of Different Methods on Cost Estimates	121	(1)
Summary	122	(1)
Key Terms	123	(1)
Appendix 4A: Using Microsoft Excel to Estimate Regression Coefficients	123	(4)
Review Questions	127	(1)
Critical Analysis and Discussion Questions	128	(1)
Exercises	128	(4)
Problems	132	(5)
Solutions to Self-Study Questions	137	(1)
Fundamentals of Product and Service Costing	138	(24)
Cost Management Systems	139	(2)
Reasons to Calculate Product or Service Costs	139	(1)
In Action: Importance of Distinguishing between Production Costs and Overhead Costs	140	(1)
Cost Allocation and Product Costing	140	(1)
Cost Flow Diagram	140	(1)
Fundamental Themes Underlying the Design of Cost Systems for Managerial Purposes	141	(1)
Costing in a Single Product, Continuous Process Industry	142	(2)
Basic Cost Flow Model	142	(1)
Costing with No Work-in-Process Inventories	142	(1)
Costing with Ending Work-in-Process Inventories	142	(2)
Costing in a Multiple Product, Discrete Process Industry	144	(5)
Predetermined Overhead Rates	146	(1)
Product Costing of Multiple Products	146	(1)
Choice of the Allocation Base for Predetermined Overhead Rate	147	(1)
Choice among Possible Allocation Bases	148	(1)
Multiple Allocation Bases and Two-Stage Systems	149	(2)
Choice of Allocation Bases	150	(1)
Different Companies, Different Production, and Costing Systems	151	(11)
Operations Costing: An Illustration	152	(1)
Summary	153	(1)
Key Terms	154	(1)
Review Questions	154	(1)
Critical Analysis and Discussion Questions	155	(1)
Exercises	155	(3)
Problems	158	(1)
Integrative Case	158	(1)
Solutions to Self-Study Questions	159	(3)
Job Costing	162	(30)
Defining a Job	163	(1)
Using Accounting Records in a Job Shop	163	(1)
Computing the Cost of a Job	164	(9)
Production Process at InShape	164	(1)
Record of Costs at InShape	165	(3)
How Manufacturing Overhead Costs Are Recorded at InShape	168	(1)
In Action: Effect of Overhead Rates on Production Decisions	168	(3)
Over-and Underapplied Overhead	171	(2)
Multiple Allocation Bases: The Two-Stage Approach	173	(1)
Summary of Steps in a Job Costing System	173	(1)
Using Job Costing in Service Organizations	173	(2)
Ethical Issues and Job Costing	175	(1)
Misstating Stage of Completion	176	(1)
Charging Costs to the Wrong Jobs	176	(1)
Misrepresenting the Cost of Jobs	176	(1)
Managing Projects	176	(16)
Summary	178	(1)
Key Terms	178	(1)
Review Questions	178	(1)
Critical Analysis and Discussion Questions	179	(1)
Exercises	179	(3)
Problems	182	(9)
Integrative Case	191	(1)
Solutions to Self-Study Questions	191	(1)
Process Costing	192	(38)
Determining Equivalent Units	194	(1)
Using Product Costing in a Process Industry	194	(5)
Step 1: Measure the Physical Flow of Resources	195	(1)
Step 2: Compute the Equivalent Units of Production	196	(1)
Step 3: Identify the Product Costs for which to Account	196	(1)
Time Out! We Need to Make an Assumption about Costs and the Work-in-Process Inventory	197	(1)
Step 4: Compute Costs per Equivalent Unit: Weighted Average	198	(1)
Step 5: Assign Product Cost to Batches of Work: Weighted-Average Process Costing	198	(1)
Reporting This Information to Managers: The Production Cost Report	199	(1)
Sections 1 and 2: Managing the Physical Flow of Units	200	(1)
Sections 3, 4, and 5: Managing Costs	200	(1)
Assigning Costs Using First-In, First-Out (FIFO) Process Costing	200	(5)
Step 1: Measure the Physical Flow of Resources	201	(1)
Step 2: Compute the Equivalent Units of Production	201	(2)
Step 3: Identify the Costs for Which to Account	203	(1)
Step 4: Compute Costs per Equivalent Unit: FIFO	203	(1)
Step 5: Assign Product Cost: FIFO	204	(1)
How This Looks in T-Accounts	204	(1)
Determining Which is Better: FIFO or Weighted Average?	205	(1)
Computing Product Costs: Summary of the Steps	205	(1)
Using Costs Transferred in From Prior Departments	206	(2)
Who Is Responsible for Costs Transferred in from Prior Departments?	208	(1)
Choosing Between Job and Process Costing	208	(1)
Operation Costing	209	(3)
Product Costing in Operations	209	(1)
Operation Costing Illustration	210	(2)
Comparing Job, Process, and Operation Costing	212	(18)
Summary	213	(1)
Key Terms	214	(1)
Review Questions	214	(1)
Critical Analysis and Discussion Questions	214	(1)
Exercises	215	(5)
Problems	220	(6)
Solutions to Self-Study Questions	226	(4)
Activity-Based Costing	230	(38)
Reported Product Costs and Decision Making	231	(3)
Dropping a Product	231	(2)
The Death Spiral	233	(1)
Two-Stage Cost Allocation	234	(5)
Two-Stage Cost Allocation and the Choice of Cost Drivers	235	(3)
Plantwide versus Department-Specific Rates	238	(1)
Choice of Cost Allocation Methods: A Cost-Benefit Decision	238	(1)
Activity-Based Costing	239	(3)
Developing Activity-Based Costs	240	(2)
Cost Hierarchies	242	(1)
Activity-Based Costing Illustrated	243	(3)
Step 1: Identify the Activities	243	(1)
Step 2: Identify the Cost Drivers	243	(1)
Step 3: Compute the Cost Driver Rates	244	(1)
Step 4: Assign Costs Using Activity-Based Costing	244	(2)
Unit Costs Compared	246	(1)
Cost Flows Through Accounts	246	(2)
Choice of Activity Bases in Modern Production Settings	248	(1)
In Action: Evidence on the Benefits of Activity-Based Costing	249	(1)
Activity-Based Costing in Administration	249	(1)
Who Uses ABC?	250	(18)
Summary	251	(1)
Key Terms	252	(1)
Review Questions	252	(1)
Critical Analysis and Discussion Questions	252	(1)
Exercises	252	(5)
Problems	257	(6)
Integrative Cases	263	(3)
Solutions to Self-Study Questions	266	(2)
Fundamentals of Cost Management	268	(30)
Using Activity-Based Cost Management to Add Value	269	(3)
Using Activity-Based Cost Information to Improve Processes	271	(1)
Using Cost Hierarchies	271	(1)
Managing the Cost of Customers and Suppliers	272	(5)
Using Activity-Based Costing to Determine the Cost of Customers and Suppliers	273	(2)
Determining Why the Cost of Customers Matters	275	(1)
Using Cost of Customer Information to Manage Costs	275	(1)
In Action: Customer: Not Product, Profitability	276	(1)
Determining the Cost of Suppliers	276	(1)
Capturing the Cost Savings	277	(1)
Managing the Cost of Capacity	277	(6)
Using and Supplying Resources	278	(1)
Computing the Cost of Unused Capacity	279	(2)
Assigning the Cost of Unused Capacity	281	(1)
Seasonal Demand and the Cost of Unused Capacity	281	(2)
Managing the Cost of Quality	283	(15)
How Can Traditional Managerial Accounting Systems Limit the Impact of Total Quality Management?	283	(1)
What Is Quality?	284	(1)
What Is the Cost of Quality?	284	(2)
Trade-Offs, Quality Control and Failure Costs	286	(1)
In Action: Cost Elements Included in Reported Quality Costs	287	(1)
Summary	288	(1)
Key Terms	289	(1)
Review Questions	289	(1)
Critical Analysis and Discussion Questions	289	(1)
Exercises	290	(4)
Problems	294	(2)
Integrative Case	296	(1)
Solutions to Self-Study Questions	296	(2)
Service Department and Joint Cost Allocation	298	(38)
Service Department Cost Allocation	299	(2)
Methods of Allocating Service Department Costs	301	(10)
Allocation Bases	301	(1)
Direct Method	301	(4)
Step Method	305	(2)
In Action: Step Method at Stanford University	307	(1)
Reciprocal Method	307	(3)
Comparison of Direct, Step, and Reciprocal Methods	310	(1)
Allocation of Joint Costs	311	(1)
Joint Costing Defined	311	(1)
Reasons for Allocating Joint Costs	311	(1)
Joint Cost Allocation Methods	312	(4)
Net Realizable Value Method	312	(3)
Physical Quantities Method	315	(1)
Evaluation of Joint Cost Methods	315	(1)
Deciding Whether to Sell Goods Now or Process Them Further	316	(1)
Decision of What to Do with By-Products	316	(20)
Summary	318	(1)
Key Terms	319	(1)
Appendix 10A: Calculation of the Reciprocal Method Using Computer Spreadsheets	319	(2)
Review Questions	321	(1)
Critical Analysis and Discussion Questions	321	(1)
Exercises	322	(4)
Problems	326	(6)
Integrative Case	332	(1)
Solutions to Self-Study Questions	333	(3)
Fundamentals of Management Control Systems	336	(26)
Why a Management Control System?	337	(1)
Alignment of Managerial and Organizational Interests	337	(1)
Evolution of the Control Problem: An Example	337	(1)
Decentralized Organizations	338	(2)
Why Decentralize the Organization?	338	(1)
Advantages of Decentralization	339	(1)
Disadvantages of Decentralization	339	(1)
Framework for Evaluating Management Control Systems	340	(2)
Organizational Environment and Strategy	340	(1)
Results of the Management Control System	340	(1)
Elements of a Management Control System	340	(1)
Balancing the Elements	341	(1)
Delegated Decision Authority: Responsibility Accounting	342	(2)
Cost Centers	342	(1)
Discretionary Cost Centers	342	(1)
Revenue Centers	342	(1)
Profit Centers	342	(1)
Investment Centers	343	(1)
Responsibility Centers and Organization Structure	343	(1)
Measuring Performance	344	(2)
Two Basic Questions	344	(1)
Cost Centers	345	(1)
Revenue Centers	345	(1)
Profit Centers	345	(1)
Investment Centers	346	(1)
Evaluating Performance	346	(2)
Relative Performance versus Absolute Performance Standards	346	(1)
Evaluating Managers' Performance versus Economic Performance of the Responsibility Center	347	(1)
Relative Performance Evaluations in Organizations	347	(1)
Compensation Systems	348	(3)
Illustration: Corporate Cost Allocation	349	(1)
Incentive Problems with Allocated Costs	349	(1)
Effective Corporate Cost Allocation	350	(1)
Do Performance Evaluation Systems Create Incentives to Commit Fraud?	351	(11)
Summary	352	(1)
Key Terms	353	(1)
Review Questions	353	(1)
Critical Analysis and Discussion Questions	353	(1)
Exercises	354	(1)
Problems	355	(2)
Integrative Case	357	(3)
Solutions to Self-Study Questions	360	(2)
Planning and Budgeting	362	(38)
How Strategic Planning Increases Competitiveness	363	(1)
Overall Plan	364	(1)
Organization Goals	364	(1)
Strategic Long-Range Profit Plan	364	(1)
Master Budget (Tactical Short-Range Profit Plan): Tying the Strategic Plan to the Operating Plan	364	(1)
Human Element in Budgeting	365	(1)
Value of Employee Participation	366	(1)
Developing the Master Budget	366	(1)
Where to Start?	366	(2)
Sales Forecasting	366	(2)
Comprehensive Illustration	368	(5)
Forecasting Production	368	(1)
Forecasting Production Costs	369	(2)
Direct Labor	371	(1)
Overhead	371	(1)
Completing the Budgeted Cost of Goods Sold	372	(1)
Revising the Initial Budget	373	(1)
Marketing and Administrative Budget	373	(1)
Pulling it Together Into the Income Statement	374	(1)
Key Relationships: The Sales Cycle	375	(1)
Using Cash Flow Budgets to Estimate Cash Needs	376	(3)
Multiperiod Cash Flows	377	(1)
In Action: The ``Curse'' of Growth	378	(1)
Planning for the Assets and Liabilities on the Budgeted Balance Sheets	379	(1)
Big Picture: How it all Fits Together	379	(1)
Budgeting in Retail and Wholesale Organizations	379	(2)
Budgeting in Service Organizations	381	(1)
In Action: Budget is the Law of Government	382	(1)
Ethical Problems in Budgeting	382	(1)
Budgeting Under Uncertainty	383	(17)
Summary	384	(1)
Key Terms	385	(1)
Review Questions	385	(1)
Critical Analysis and Discussion Questions	385	(1)
Exercises	385	(5)
Problems	390	(5)
Integrative Case	395	(1)
Solutions to Self-Study Questions	396	(4)
Business Unit Performance Measurement	400	(28)
In Action: What Determines Whether Firms Use Divisional Measures for Measuring Divisional Performance	401	(1)
Accounting Income	402	(2)
Computing Divisional Income	402	(1)
Advantages and Disadvantages of Divisional Income	402	(1)
Some Simple Financial Ratios	403	(1)
Return on Investment	404	(4)
Performance Measures for Control: A Short Detour	405	(1)
Limitations of ROI	405	(3)
Residual Income Measures	408	(2)
Limitations of Residual Income	409	(1)
Economic Value Added (EVAR)	410	(2)
Limitations of EVA	411	(1)
In Action: Does Using Residual Income as a Performance Measure Affect Managers' Decisions?	412	(1)
Measuring the Investment Base	412	(3)
Gross Book Value versus Net Book Value	412	(1)
Historical Cost versus Current Cost	413	(2)
Beginning, Ending, or Average Balance	415	(1)
Other Issues in Divisional Performance Measurement	415	(13)
Summary	416	(1)
Key Terms	416	(1)
Review Questions	416	(1)
Critical Analysis and Discussion Questions	417	(1)
Exercises	417	(3)
Problems	420	(3)
Integrative Case	423	(3)
Solutions to Self-Study Questions	426	(2)
Transfer Pricing	428	(30)
What is Transfer Pricing and Why is it Important?	429	(1)
Determining the Optimal Transfer Price	430	(5)
The Setting	430	(1)
Determining Whether a Transfer Price is Optimal	430	(2)
Case 1: A Perfect Intermediate Market	432	(2)
Case 2: No Intermediate Market	434	(1)
Optimal Transfer Price: A General Principle	435	(1)
Other Market Conditions	436	(1)
Applying the General Principle	436	(1)
How to Help Managers Achieve Their Goals While Achieving the Organization's Goals	437	(1)
Top-Management Intervention in Transfer Pricing	438	(1)
Centrally Established Transfer Price Policies	438	(3)
Establishing a Market Price Policy	438	(1)
Establishing a Cost-Basis Policy	439	(1)
Alternative Cost Measures	440	(1)
Remedying Motivational Problems of Transfer Pricing Policies	441	(1)
Negotiating the Transfer Price	441	(1)
Imperfect Markets	442	(1)
Global Practices	442	(1)
Multinational Transfer Pricing	443	(1)
Segment Reporting	444	(14)
Summary	445	(1)
Key Terms	446	(1)
Review Questions	446	(1)
Critical Analysis and Discussion Questions	446	(1)
Exercises	447	(2)
Problems	449	(5)
Integrative Cases	454	(2)
Solutions to Self-Study Questions	456	(2)
Fundamentals of Variance Analysis	458	(44)
Using Budgets for Performance Evaluation	459	(1)
Profit Variance	460	(1)
Why Are Actual and Budgeted Results Different?	461	(1)
Flexible Budgeting	461	(2)
Comparing Budgets and Results	463	(1)
Sales Activity Variance	463	(1)
Profit Variance Analysis as a Key Tool for Managers	464	(2)
Sales Price Variance	466	(1)
Variable Production Cost Variances	466	(1)
Fixed Production Cost Variance	466	(1)
Marketing and Administrative Variances	466	(1)
Performance Measurement and Control in a Cost Center	466	(2)
Variable Production Costs	467	(1)
Variable Cost Variance Analysis	468	(7)
General Model	468	(1)
Direct Materials	469	(2)
Direct Labor	471	(1)
Variable Production Overhead	472	(2)
Variable Cost Variances Summarized in Graphic Form	474	(1)
Fixed Cost Variances	475	(3)
Fixed Cost Variances with Variable Costing	475	(1)
Absorption Costing: The Production Volume Variance	476	(2)
Summary of Overhead Variances	478	(24)
Key Points	478	(1)
Summary	479	(1)
Key Terms	480	(1)
Appendix A: Recording Costs in a Standard Cost System	480	(3)
Review Questions	483	(1)
Critical Analysis and Discussion Questions	484	(1)
Exercises	484	(6)
Problems	490	(6)
Integrative Case	496	(3)
Solutions to Self-Study Questions	499	(3)
Additional Topics in Variance Analysis	502	(30)
Profit Variance Analysis When Units Produced Do Not Equal Units Sold	503	(3)
In Action: Financial Analysis and Variance Analysis	505	(1)
Reconciling Variable Costing Budgets and Full-Absorption Income Statements	505	(1)
Materials Purchases Do Not Equal Materials Used	506	(2)
Market Share Variance and Industry Volume Variance	508	(1)
Sales Activity Variances with Multiple Products	509	(3)
Evaluating Product Mix	509	(1)
Evaluating Sales Mix and Sales Quantity	510	(1)
In Action Sales Mix and Financial Reporting	511	(1)
Production Mix and Yield Variances	512	(3)
Mix and Yield Variances in Manufacturing	512	(3)
Variance Analysis in Nonmanufacturing Settings	515	(1)
Using the Profit Variance Analysis in Service and Merchandise Organizations	515	(1)
Efficiency Measures	515	(1)
Mix and Yield Variances in Service Organizations	516	(1)
Keeping an Eye on Variances and Standards	516	(16)
How Many Variances to Calculate	516	(1)
When to Investigate Variances	517	(1)
Updating Standards	518	(1)
Summary	518	(1)
Key Terms	518	(1)
Review Questions	519	(1)
Critical Analysis and Discussion Questions	519	(1)
Exercises	519	(3)
Problems	522	(4)
Integrative Case	526	(2)
Solutions to Self-Study Questions	528	(4)
Nonfinancial and Multiple Measures of Performance	532	(20)
Beyond the Accounting Numbers	533	(1)
Organizational Environment and Business Strategy	534	(1)
Responsibilities According to Level of Organization	534	(1)
Business Model	535	(1)
Multiple Measures or a Single Measure of Performance?	536	(6)
Balanced Scorecard	536	(3)
In Action: Using Balanced Scorecard Information to Evaluate Multiple Divisions	539	(1)
Continuous Improvement and Benchmarking	539	(2)
In Action: Sources and Uses of Benchmarking Data	541	(1)
Performance Measurement for Control	542	(1)
Some Common Nonfinancial Performance Measures	542	(3)
Customer Satisfaction Performance Measures	542	(1)
Functional Performance Measures	543	(1)
Nonfinancial Performance and Activity-Based Management	544	(1)
Objective and Subjective Performance Measures	544	(1)
Employee Involvement	545	(7)
Summary	546	(1)
Key Terms	547	(1)
Review Questions	547	(1)
Critical Analysis and Discussion Questions	547	(1)
Exercises	548	(1)
Problems	549	(2)
Solutions to Self-Study Questions	551	(1)
Appendix Capital Investment Decisions: An Overview	552	(11)
Glossary	563	(6)
Photo Credits	569	(2)
Index	571