C
ostAccounting vf
A MANAGERIAL EMPHASIS
vf vf
SeventeenthvfEdition
GlobalvfEdition
SrikantvfM.vfDatar
HarvardvfUniversity
MadhavvfV.vfRajan
Universityvfofv f Chicago
Harlow,vfEnglandvf•vfLondonvf•vfNewvfYorkvf•vfBostonvf•vfSanvfFranciscovf•vfTorontovf•vfSydneyvf•vfDubaivf•vfSingaporevf•vfHo
ngvfKongvfTokyovf•vfSeoulvf•vfTaipeivf•vfNewvfDelhivf•vfCapevfTownvf•vfSaovfPaulovf•vfMexicovfCityvf•vfMadridvf•vfAmsterdamvf
•vfMunichvf•vfParisvf•vfMilan
,Brief Contents
vf
1 Thevf Managervf andvf Managementvf Accountingv f v f 19
2 AnvfIntroductionvftovfCostvfTermsvfandvfPurposesv f v f 46
3 Cost–Volume–ProfitvfAnalysisv f v f 83
4 JobvfCostingv f v f 122
5 Activity-BasedvfCostingvfandvf Activity-BasedvfManagementv f v f 167
6 MastervfBudgetvfandvfResponsibilityvfAccountingv f v f 212
7 FlexiblevfBudgets,vfDirect-CostvfVariances,vfandvfManagementvfControlv f v f 263
8 FlexiblevfBudgets,vfOverheadvfCostvfVariances,vfandvfManagem
entvfControlv f 300
9 InventoryvfCostingvfandvfCapacityvfAnalysisv f v f 340
10 DeterminingvfHowvfCostsvfBehavev f v f 384
11 DatavfAnalyticvfThinkingvfandvfPredictionv f v f 437
12 DecisionvfMakingvfandvfRelevantvfInformationv f v f 484
13 Strategy,v f Balancedv f Scorecard,v f andv f Strategicv f Profitabilityv f Analysis 535
14 PricingvfDecisionsvfandvfCostvfManagementv f v f 580
15 CostvfAllocation,vfCustomer-ProfitabilityvfAnalysis,vfandvfSales-
VariancevfAnalysisv f 614
16 Allocationvfofv f Support-
DepartmentvfCosts,vfCommonvfCosts,vfandvfRevenuesv f 657
17 CostvfAllocation:vfJointvfProductsvfandvfByproductsv f v f 697
18 ProcessvfCostingv f 728
19 Spoilage,vfRework,vfandvfScrapv f v f 769
20 BalancedvfScorecard:vfQualityvfandvfTimev f v f 797
21 InventoryvfManagement,vfJust-in-
Time,vfandvfSimplifiedvfCostingvfMethodsv f 827
22 CapitalvfBudgetingvf andvf Costvf Analysisv f v f 867
23 ManagementvfControlvfSystems,vfTransfervfPricing,vfandvfMultinatio
nalvfConsiderationsv f 905
24 PerformancevfMeasurement,vfCompensation,vfandvfMultinatio
nalvfConsiderationsv f 941
,Contents
CostvfAllocationvfChallengesv f 48vfFactorsvfAffectin
1 ThevfManagervfandvfManagement gvfDirect/IndirectvfCost
Accountingv f 19 Classificationsv f v f 49
Cost-BehaviorvfPatterns:vfVariablevfCostsvfandvfFixedvfCostsv f 5
ForvfCoca-
Cola,vfSmallervfSizesvfMeanvfBiggervfProfitsv f
v f 19
ConceptsvfinvfAction:v f LyftvfHelpsvfHospitalsvfReducevfTheirvfFixedvfT
FinancialvfAccounting,vfManagementvfAccounting,vfa sportationvfCostsv f 52
ndvfCostvfAccountingv f 20 4
StrategicvfDecisionsvfandvfthevfManagementvfAcc
ountantv f 22
Value-ChainvfandvfSupply-
ChainvfAnalysisvfandvfKeyvfSuccessvfFactorsv f
22
Value-ChainvfAnalysisv f v f 23
Supply-
ChainvfAnalysisv f 24vfKeyvfSu
ccessvfFactorsv f 25
ConceptsvfinvfAction:v f CostvfLeadershipvfatvfCostc
o:vfRock-BottomvfPricesvfandvfSky-
HighvfProfitsv f 26
DecisionvfMaking,vfPlanning,vfandvfControl:vfT
hevfFive-StepvfDecision-
MakingvfProcessv f 27
KeyvfManagementvfAccountingvfGuidelinesv
f 30vfCost–BenefitvfApproachv f 30
BehavioralvfandvfTechnicalvfConsiderationsv f 31vf
DifferentvfCostsvfforvfDifferentvfPurposesv f 31
OrganizationvfStructurevfandvfthevfManageme
ntvfAccountantv f 31
LinevfandvfStaffvfRelationshipsv f 3
1vfThevfChiefvfFinancialvfOfficervfandvf
the
Controllerv f v f 32
ManagementvfAccountingvfBeyondvfthevfNu
mbersv f 33
ProfessionalvfEthicsv f v f 34
InstitutionalvfSupportv f 34vf
TypicalvfEthicalvfChallengesv f
35
ProblemvfforvfSelf-
Studyv f 37v f |v f DecisionvfPointsv f 37v f |vfTermsvftovfLe
arnv f 38v f |v f AssignmentvfMaterialv f 38v f |vfQuestio
nsv f 38v f |v f Multiple-
ChoicevfQuestionsv f 39v f |vfExercisesv f 39v f |v f Pro
blemsv f 41
2 AnvfIntroductionvftovfCostvfTerms
andvfPurposesv f 46
HighvfFixedvfCostsvfBankruptvfAéropostalev f v f 46
CostsvfandvfCostvfTerminologyv f 47vf
DirectvfCostsvfandvfIndirectvfCostsv f 47
, nvfPointvfandvfTargetvfOperatingvfIncomev f 90
CostvfDriversv f v f 53
BreakevenvfPointv f 90
RelevantvfRangev f 53
TargetvfOperatingvfIncomev f 91
RelationshipsvfBetweenvfTypes
IncomevfTaxesvfandvfTargetvfNetvfIncomev f 93
vfofvfCostsv f 54vfTotalvfCostsvfan
vfUsingvfCVPvfAnalysisvfforvfDecisionvfMakingv f
dvfUnitvfCostsv f 55
94
UnitvfCostsv f v f 55
DecisionvftovfAdvertisev f 94
UsevfUnitvfCostsvfCautiouslyv f v f 55
BusinessvfSectors,vfTypesvfofvf Inventory,vfIn
ventoriablevfCosts,vfandvfPeriodvfCos
tsv f 56
Manufacturing-
,vfMerchandising-
,vfandvfService-
SectorvfCompaniesv
f 56
TypesvfofvfInventoryv f 57
CommonlyvfUsedvfClassificationsvfofvfM
anufacturingvfCostsv f 57
InventoriablevfCostsv f v f 57
PeriodvfCostsv f v f 58
IllustratingvfthevfFlowvfofvf Inventoriablev
fCostsvfandvfPeriodvfCostsv f 59
Manufacturing-SectorvfExamplev f 59
RecapvfofvfInventoriablevfCostsvfandvfP
eriodvfCostsv f 63vfPrimevfCostsvfand
vfConversionvfCostsv f 64
MeasuringvfCostsvfRequiresvfJudg
mentv f 64vfLaborvfCostsv f 6
4
BenefitsvfofvfDefiningvfAccounti
ngvfTermsv f 65vfDifferentvfM
eaningsvfofvfProductvfCostsv
f 65
AvfFrameworkvfforvfCostvfAccoun
tingvfandvfCostvfManagemen
tv f 67
CalculatingvfthevfCostvfofvf Products,vfS
ervices,vfandvfOthervfCostvfObjects
v f 67
ObtainingvfInformationvfforvfPlanning
vfandvfControlvfandvfPerformancevf
Evaluationv f 67
AnalyzingvfthevfRelevantvfInformationvff
orvfMakingvfDecisionsv f 67
ProblemvfforvfSelf-
Studyv f 68v f |v f DecisionvfPointsv f 7
0v f |vfTermsvftovfLearnv f 71v f |v f Assi
gnmentvfMaterialv f 71v f |vfQuestion
sv f 71v f |v f Multiple-
ChoicevfQuestionsv f 72v f |vfExercise
sv f 73v f |v f Problemsv f 78
3 Cost–Volume–ProfitvfAnalysisv f 83
HowvfCoachellavfTunesvfUpvfthevfSweetvfSoundvfofvfProfitsv f v f
83
EssentialsvfofvfCVPvfAnal
ysisv f 84vfContributi
onvfMarginv f 85vfExp
ressingvfCVPvfRelations
hipsv f 87
Cost–Volume–
ProfitvfAssumptionsv f 89vfBreakeve
ostAccounting vf
A MANAGERIAL EMPHASIS
vf vf
SeventeenthvfEdition
GlobalvfEdition
SrikantvfM.vfDatar
HarvardvfUniversity
MadhavvfV.vfRajan
Universityvfofv f Chicago
Harlow,vfEnglandvf•vfLondonvf•vfNewvfYorkvf•vfBostonvf•vfSanvfFranciscovf•vfTorontovf•vfSydneyvf•vfDubaivf•vfSingaporevf•vfHo
ngvfKongvfTokyovf•vfSeoulvf•vfTaipeivf•vfNewvfDelhivf•vfCapevfTownvf•vfSaovfPaulovf•vfMexicovfCityvf•vfMadridvf•vfAmsterdamvf
•vfMunichvf•vfParisvf•vfMilan
,Brief Contents
vf
1 Thevf Managervf andvf Managementvf Accountingv f v f 19
2 AnvfIntroductionvftovfCostvfTermsvfandvfPurposesv f v f 46
3 Cost–Volume–ProfitvfAnalysisv f v f 83
4 JobvfCostingv f v f 122
5 Activity-BasedvfCostingvfandvf Activity-BasedvfManagementv f v f 167
6 MastervfBudgetvfandvfResponsibilityvfAccountingv f v f 212
7 FlexiblevfBudgets,vfDirect-CostvfVariances,vfandvfManagementvfControlv f v f 263
8 FlexiblevfBudgets,vfOverheadvfCostvfVariances,vfandvfManagem
entvfControlv f 300
9 InventoryvfCostingvfandvfCapacityvfAnalysisv f v f 340
10 DeterminingvfHowvfCostsvfBehavev f v f 384
11 DatavfAnalyticvfThinkingvfandvfPredictionv f v f 437
12 DecisionvfMakingvfandvfRelevantvfInformationv f v f 484
13 Strategy,v f Balancedv f Scorecard,v f andv f Strategicv f Profitabilityv f Analysis 535
14 PricingvfDecisionsvfandvfCostvfManagementv f v f 580
15 CostvfAllocation,vfCustomer-ProfitabilityvfAnalysis,vfandvfSales-
VariancevfAnalysisv f 614
16 Allocationvfofv f Support-
DepartmentvfCosts,vfCommonvfCosts,vfandvfRevenuesv f 657
17 CostvfAllocation:vfJointvfProductsvfandvfByproductsv f v f 697
18 ProcessvfCostingv f 728
19 Spoilage,vfRework,vfandvfScrapv f v f 769
20 BalancedvfScorecard:vfQualityvfandvfTimev f v f 797
21 InventoryvfManagement,vfJust-in-
Time,vfandvfSimplifiedvfCostingvfMethodsv f 827
22 CapitalvfBudgetingvf andvf Costvf Analysisv f v f 867
23 ManagementvfControlvfSystems,vfTransfervfPricing,vfandvfMultinatio
nalvfConsiderationsv f 905
24 PerformancevfMeasurement,vfCompensation,vfandvfMultinatio
nalvfConsiderationsv f 941
,Contents
CostvfAllocationvfChallengesv f 48vfFactorsvfAffectin
1 ThevfManagervfandvfManagement gvfDirect/IndirectvfCost
Accountingv f 19 Classificationsv f v f 49
Cost-BehaviorvfPatterns:vfVariablevfCostsvfandvfFixedvfCostsv f 5
ForvfCoca-
Cola,vfSmallervfSizesvfMeanvfBiggervfProfitsv f
v f 19
ConceptsvfinvfAction:v f LyftvfHelpsvfHospitalsvfReducevfTheirvfFixedvfT
FinancialvfAccounting,vfManagementvfAccounting,vfa sportationvfCostsv f 52
ndvfCostvfAccountingv f 20 4
StrategicvfDecisionsvfandvfthevfManagementvfAcc
ountantv f 22
Value-ChainvfandvfSupply-
ChainvfAnalysisvfandvfKeyvfSuccessvfFactorsv f
22
Value-ChainvfAnalysisv f v f 23
Supply-
ChainvfAnalysisv f 24vfKeyvfSu
ccessvfFactorsv f 25
ConceptsvfinvfAction:v f CostvfLeadershipvfatvfCostc
o:vfRock-BottomvfPricesvfandvfSky-
HighvfProfitsv f 26
DecisionvfMaking,vfPlanning,vfandvfControl:vfT
hevfFive-StepvfDecision-
MakingvfProcessv f 27
KeyvfManagementvfAccountingvfGuidelinesv
f 30vfCost–BenefitvfApproachv f 30
BehavioralvfandvfTechnicalvfConsiderationsv f 31vf
DifferentvfCostsvfforvfDifferentvfPurposesv f 31
OrganizationvfStructurevfandvfthevfManageme
ntvfAccountantv f 31
LinevfandvfStaffvfRelationshipsv f 3
1vfThevfChiefvfFinancialvfOfficervfandvf
the
Controllerv f v f 32
ManagementvfAccountingvfBeyondvfthevfNu
mbersv f 33
ProfessionalvfEthicsv f v f 34
InstitutionalvfSupportv f 34vf
TypicalvfEthicalvfChallengesv f
35
ProblemvfforvfSelf-
Studyv f 37v f |v f DecisionvfPointsv f 37v f |vfTermsvftovfLe
arnv f 38v f |v f AssignmentvfMaterialv f 38v f |vfQuestio
nsv f 38v f |v f Multiple-
ChoicevfQuestionsv f 39v f |vfExercisesv f 39v f |v f Pro
blemsv f 41
2 AnvfIntroductionvftovfCostvfTerms
andvfPurposesv f 46
HighvfFixedvfCostsvfBankruptvfAéropostalev f v f 46
CostsvfandvfCostvfTerminologyv f 47vf
DirectvfCostsvfandvfIndirectvfCostsv f 47
, nvfPointvfandvfTargetvfOperatingvfIncomev f 90
CostvfDriversv f v f 53
BreakevenvfPointv f 90
RelevantvfRangev f 53
TargetvfOperatingvfIncomev f 91
RelationshipsvfBetweenvfTypes
IncomevfTaxesvfandvfTargetvfNetvfIncomev f 93
vfofvfCostsv f 54vfTotalvfCostsvfan
vfUsingvfCVPvfAnalysisvfforvfDecisionvfMakingv f
dvfUnitvfCostsv f 55
94
UnitvfCostsv f v f 55
DecisionvftovfAdvertisev f 94
UsevfUnitvfCostsvfCautiouslyv f v f 55
BusinessvfSectors,vfTypesvfofvf Inventory,vfIn
ventoriablevfCosts,vfandvfPeriodvfCos
tsv f 56
Manufacturing-
,vfMerchandising-
,vfandvfService-
SectorvfCompaniesv
f 56
TypesvfofvfInventoryv f 57
CommonlyvfUsedvfClassificationsvfofvfM
anufacturingvfCostsv f 57
InventoriablevfCostsv f v f 57
PeriodvfCostsv f v f 58
IllustratingvfthevfFlowvfofvf Inventoriablev
fCostsvfandvfPeriodvfCostsv f 59
Manufacturing-SectorvfExamplev f 59
RecapvfofvfInventoriablevfCostsvfandvfP
eriodvfCostsv f 63vfPrimevfCostsvfand
vfConversionvfCostsv f 64
MeasuringvfCostsvfRequiresvfJudg
mentv f 64vfLaborvfCostsv f 6
4
BenefitsvfofvfDefiningvfAccounti
ngvfTermsv f 65vfDifferentvfM
eaningsvfofvfProductvfCostsv
f 65
AvfFrameworkvfforvfCostvfAccoun
tingvfandvfCostvfManagemen
tv f 67
CalculatingvfthevfCostvfofvf Products,vfS
ervices,vfandvfOthervfCostvfObjects
v f 67
ObtainingvfInformationvfforvfPlanning
vfandvfControlvfandvfPerformancevf
Evaluationv f 67
AnalyzingvfthevfRelevantvfInformationvff
orvfMakingvfDecisionsv f 67
ProblemvfforvfSelf-
Studyv f 68v f |v f DecisionvfPointsv f 7
0v f |vfTermsvftovfLearnv f 71v f |v f Assi
gnmentvfMaterialv f 71v f |vfQuestion
sv f 71v f |v f Multiple-
ChoicevfQuestionsv f 72v f |vfExercise
sv f 73v f |v f Problemsv f 78
3 Cost–Volume–ProfitvfAnalysisv f 83
HowvfCoachellavfTunesvfUpvfthevfSweetvfSoundvfofvfProfitsv f v f
83
EssentialsvfofvfCVPvfAnal
ysisv f 84vfContributi
onvfMarginv f 85vfExp
ressingvfCVPvfRelations
hipsv f 87
Cost–Volume–
ProfitvfAssumptionsv f 89vfBreakeve
