Description
New to This Edition
Deeper Consideration of Global Issues
Businesses today have no choice but to integrate into an increasingly global ecosystem. Virtually all aspects, including supply chains, product markets, and the market for managerial talent, have become more international in their outlook. To illustrate this, we incorporate global considerations into many of the chapters. For example, Chapter 6 talks about the spe-cial challenges of budgeting in multinational companies while Chapter 23 discusses the chal-lenges of evaluating the performance of divisions located in different countries. The opener for Chapter 17 highlights the differences in the way process flows are accounted for under U.S. and international accounting rules and the impact of these differences on companies’ margins and after-tax income. Chapter 22 examines the importance of transfer pricing in minimizing the tax burden faced by multinational companies. Several new examples of man-agement accounting applications in companies are drawn from international settings.
Increased Focus on Merchandising and Service Sectors
In keeping with the shifts in the U.S. and world economy, this edition makes greater use of merchandising and service sector examples, with corresponding de-emphasis of traditional manufacturing settings. For example, Chapter 10 illustrates linear cost functions in the context of payments for cloud computing services. Chapter 20 highlights inventory man-agement in retail organizations and has a revised example based on a seller of sunglasses. Chapter 21 now incorporates a new running example that looks at capital budgeting in the context of a transportation company. Several Concepts in Action boxes focus on the mer-chandising and service sectors, including the use of activity-based costing to reduce the costs of health care delivery (Chapter 5), the structure of SGA costs at Nordstrom (Chapter 2), and an analysis of the operating income performance of Best Buy (Chapter 12).
Greater Emphasis on Sustainability
This edition places significant emphasis on sustainability as one of the critical managerial challenges of the coming decades. Many managers are promoting the development and implementation of strategies to achieve long-term financial, social, and environmental performance as key imperatives. We highlight this in Chapter 1 and return to the theme in several subsequent chapters. Chapter 12 discusses the benefits to companies from measur-ing social and environmental performance and how such measures can be incorporated in a balanced scorecard. Chapter 23 provides several examples of companies that man-date disclosures and evaluate managers on environmental and social metrics. A variety of chapters, including Chapters 4, 10, and 15, contain vignettes that stress themes of energy independence, using cost analysis to reduce environmental footprints, and constructing “green” homes in a cost-effective manner.
New Cutting-Edge Topics
The pace of change in organizations continues to be rapid. The fifteenth edition of Cost Accounting reflects changes occurring in the role of cost accounting in organizations.
● We have introduced sustainability strategies and the methods companies use to imple-ment sustainability with business goals.
● We have added ideas based on academic research regarding the weights to be placed on performance measures in a balanced scorecard.
● We have provided details on the transfer pricing strategies used by multinational tech-nology firms such as Apple and Google to minimize income taxes.
● We discuss current trends in the regulation of executive compensation.
● We describe the evolution of enterprise resource planning systems and newer simpli-fied costing systems that practice lean accounting.
● We discuss the role of accounting concepts and systems in fostering and supporting innovation and entrepreneurial activities in firms.