Cornerstones of Cost Management Third Edition Chapter 5 Solutions

Cornerstones of Cost Management, 3rd Edition

Published: © 2015

Print ISBN: 9781285751788

Pages: 1120

Available

Providing the most up-to-date and thorough coverage of cost management topics, Hansen/Mowen's CORNERSTONES OF COST MANAGEMENT provides students with a solid foundation with its unique Cornerstones approach. Adapted from the leading Cost Management text also from Don Hansen and Maryanne Mowen, and created from our research on student learning behavior, this text presents concepts in a step-by-step format. This presentation… More

For Instructors

For Students

• Table of Contents

• New to this edition

• Features

• About the author(s)

• Reviews

1. Introduction to Cost Management.
2. Basic Cost Management Concepts.
3. Cost Behavior.
4. Activity-Based Costing.
INTEGRATIVE EXERCISES.
5. Product and Service Costing: Job-Order System.
6. Process Costing.
7. Allocating Costs of Support Departments and Joint Products.
8. Budgeting for Planning and Control.
9. Standard Costing: A Functional-Based Control Approach.
10. Decentralization: Responsibility Accounting, Performance.
Evaluation, and Transfer Pricing.
INTEGRATIVE EXERCISES.
11. Strategic Cost Management.
12. Activity-Based Management.
13. The Balanced Scorecard: Strategic-Based Control.
14. Quality and Environmental Cost Management.
15. Lean Accounting and Productivity Measurement.
INTEGRATIVE EXERCISES.
16. Cost-Volume-Profit Analysis.
17. Activity Resource Usage Model and Tactical Decision Making.
18. Pricing and Profitability Analysis.
19. Capital Investment.
20. Inventory Management: Economic Order Quantity, JIT, and the Theory of Constraints.
INTEGRATIVE EXERCISES.
Glossary.
Check Figures.
Index.

• Additional verification and text improvements have been incorporated throughout. Additional rounding instructions have been added in Chapter 3. In Chapter 5, the feature on Normal and Abnormal Spoilage in a Job-Order Environment has been rewritten for clarity. In Chapter 16, Multiple-Product Analysis example has been updated and Cornerstones 16.4 has been revised.
• Significant changes with this edition occur in the CengageNOW™ online homework platform.
• NEW: Cost Accounting Bootcamp--a refresher on key managerial accounting concepts.
• NEW: Blueprint Problems--problems that walk-through concepts in step format.
• NEW: Analyzing Relationship Problems--allow students to manipulate data to understand relationships.

• CPA-Type Exercises: A section in the end of chapter includes five exercises either taken directly from previous CPA Exams or written specifically for this textbook by the authors to provide an example of what students can expect to encounter on the exam, preparing them for a future in accounting.
• "Cornerstones Examples" throughout each chapter provide students with step-by-step coverage of the How, Why, and What Ifs of solving and mastering basic cost management concepts. This method presents them with a model to help them truly grasp the calculations and therefore more easily complete homework, while also helping them understand why they are doing the calculation. The "What If" feature takes it a step further, challenging students to think past the numbers and understand the true concept behind the equations.
• Cornerstones Exercises: Based on our research on student learning behavior, the authors have also created specific "Cornerstones Exercises." These exercises in the end of chapter are structured like the "Cornerstones Examples" in the text and list which "Cornerstone Example" they match. These questions allow students to have some guidance and practice before moving on to the more complex questions in the end of chapter.
• CPA-Type Exercises: This section in the end of chapter includes five exercises either taken directly from previous CPA Exams or written specifically for this textbook by the authors to provide an example of what students can expect to encounter on the exam, preparing them for a future in accounting.
• Student-Friendly Organization: In addition to end-of-chapter material such as the "Cornerstones Exercises" and the list of the important equations discussed within that chapter, we have included a guide to the "Cornerstones Examples" and where to find them, allowing students to quickly reference them when needed. All exercises and problems in the end of chapter also reference the learning objective they are addressing, making it easier for you to decide what to assign to your students, and helping your students understand what they should be learning from each exercise.
• Service Sector Focus: The significance of the service sector is recognized in this text through the extensive application of cost management principles to services. The text explains that services are not simply less complicated manufacturing settings but instead have their own characteristics.
• Cost Management Information Systems Approach: By focusing on ABC or unit-based systems and the implications of implementing those systems separately, the discussion of these specific approaches stands alone, giving you the flexibility to modify the coverage to best meet the needs of your specific course.
• Budgeting Coverage: For a more integrated discussion, all budgeting and activity-based budgeting topics are covered extensively within one comprehensive chapter.
• Real-World Focus: All chapters include numerous references to real companies such as the Walt Disney Company, McDonald's, RadioShack, Lands' End, and many more to help illustrate each topic for students, ensuring your students understand the relevance and real-world application of the concepts discussed.
• Review Problems: All chapters (except Chapter 1) include review problems and solutions. These problems demonstrate the computational aspects of chapter materials and reinforce the students' understanding of chapter concepts before they undertake end-of-chapter materials.

Don R. Hansen

Dr. Don R. Hansen is professor emeritus at Oklahoma State University. He has an undergraduate degree in mathematics from Brigham Young University. He received his Ph.D. from the University of Arizona. Dr. Hansen has published articles in both accounting and engineering journals, including The Accounting Review, The Journal of Management Accounting Research, Accounting Organizations and Society, Accounting Horizons and IIE Transactions. He has also served on the editorial board of The Accounting Review. His outside interests include family, church activities, reading, movies and watching sports.

Maryanne M. Mowen

Dr. Maryanne M. Mowen is associate professor of accounting emerita at Oklahoma State University. She received her Ph.D. from Arizona State University. With degrees in economics and history, she brings a unique interdisciplinary perspective to teaching and writing in both cost accounting and management accounting. Her research interests include management accounting, behavioral decision theory and Sarbanes-Oxley compliance. She also teaches an ethics course about the impact of Sarbanes-Oxley on the accounting profession. Dr. Mowen has published articles in journals such as Decision Science, Journal of Economic Psychology and Journal of Management Accounting Research. She has also served as a consultant to mid-sized and Fortune 100 companies and works with corporate controllers on management accounting issues. She advises entrepreneurs and nonprofit organizations. Outside the classroom, she enjoys hiking, travelling, reading mysteries and solving crossword puzzles.

"I applaud the strategy of including comprehensive, integrative problems to be used with the text." - Kenneth P. Sinclair, Lehigh University

"I believe this [Integrative Exercises] is both an innovative and a great idea by Cengage for this particular course." - Dr. Ronald F. Premuroso, The University of Montana

Table of Contents

1. Introduction to Cost Management.
2. Basic Cost Management Concepts.
3. Cost Behavior.
4. Activity-Based Costing.
INTEGRATIVE EXERCISES.
5. Product and Service Costing: Job-Order System.
6. Process Costing.
7. Allocating Costs of Support Departments and Joint Products.
8. Budgeting for Planning and Control.
9. Standard Costing: A Functional-Based Control Approach.
10. Decentralization: Responsibility Accounting, Performance.
Evaluation, and Transfer Pricing.
INTEGRATIVE EXERCISES.
11. Strategic Cost Management.
12. Activity-Based Management.
13. The Balanced Scorecard: Strategic-Based Control.
14. Quality and Environmental Cost Management.
15. Lean Accounting and Productivity Measurement.
INTEGRATIVE EXERCISES.
16. Cost-Volume-Profit Analysis.
17. Activity Resource Usage Model and Tactical Decision Making.
18. Pricing and Profitability Analysis.
19. Capital Investment.
20. Inventory Management: Economic Order Quantity, JIT, and the Theory of Constraints.
INTEGRATIVE EXERCISES.
Glossary.
Check Figures.
Index.

New to this edition

• Additional verification and text improvements have been incorporated throughout. Additional rounding instructions have been added in Chapter 3. In Chapter 5, the feature on Normal and Abnormal Spoilage in a Job-Order Environment has been rewritten for clarity. In Chapter 16, Multiple-Product Analysis example has been updated and Cornerstones 16.4 has been revised.
• Significant changes with this edition occur in the CengageNOW™ online homework platform.
• NEW: Cost Accounting Bootcamp--a refresher on key managerial accounting concepts.
• NEW: Blueprint Problems--problems that walk-through concepts in step format.
• NEW: Analyzing Relationship Problems--allow students to manipulate data to understand relationships.

Features

• CPA-Type Exercises: A section in the end of chapter includes five exercises either taken directly from previous CPA Exams or written specifically for this textbook by the authors to provide an example of what students can expect to encounter on the exam, preparing them for a future in accounting.
• "Cornerstones Examples" throughout each chapter provide students with step-by-step coverage of the How, Why, and What Ifs of solving and mastering basic cost management concepts. This method presents them with a model to help them truly grasp the calculations and therefore more easily complete homework, while also helping them understand why they are doing the calculation. The "What If" feature takes it a step further, challenging students to think past the numbers and understand the true concept behind the equations.
• Cornerstones Exercises: Based on our research on student learning behavior, the authors have also created specific "Cornerstones Exercises." These exercises in the end of chapter are structured like the "Cornerstones Examples" in the text and list which "Cornerstone Example" they match. These questions allow students to have some guidance and practice before moving on to the more complex questions in the end of chapter.
• CPA-Type Exercises: This section in the end of chapter includes five exercises either taken directly from previous CPA Exams or written specifically for this textbook by the authors to provide an example of what students can expect to encounter on the exam, preparing them for a future in accounting.
• Student-Friendly Organization: In addition to end-of-chapter material such as the "Cornerstones Exercises" and the list of the important equations discussed within that chapter, we have included a guide to the "Cornerstones Examples" and where to find them, allowing students to quickly reference them when needed. All exercises and problems in the end of chapter also reference the learning objective they are addressing, making it easier for you to decide what to assign to your students, and helping your students understand what they should be learning from each exercise.
• Service Sector Focus: The significance of the service sector is recognized in this text through the extensive application of cost management principles to services. The text explains that services are not simply less complicated manufacturing settings but instead have their own characteristics.
• Cost Management Information Systems Approach: By focusing on ABC or unit-based systems and the implications of implementing those systems separately, the discussion of these specific approaches stands alone, giving you the flexibility to modify the coverage to best meet the needs of your specific course.
• Budgeting Coverage: For a more integrated discussion, all budgeting and activity-based budgeting topics are covered extensively within one comprehensive chapter.
• Real-World Focus: All chapters include numerous references to real companies such as the Walt Disney Company, McDonald's, RadioShack, Lands' End, and many more to help illustrate each topic for students, ensuring your students understand the relevance and real-world application of the concepts discussed.
• Review Problems: All chapters (except Chapter 1) include review problems and solutions. These problems demonstrate the computational aspects of chapter materials and reinforce the students' understanding of chapter concepts before they undertake end-of-chapter materials.

About the author(s)

Don R. Hansen

Dr. Don R. Hansen is professor emeritus at Oklahoma State University. He has an undergraduate degree in mathematics from Brigham Young University. He received his Ph.D. from the University of Arizona. Dr. Hansen has published articles in both accounting and engineering journals, including The Accounting Review, The Journal of Management Accounting Research, Accounting Organizations and Society, Accounting Horizons and IIE Transactions. He has also served on the editorial board of The Accounting Review. His outside interests include family, church activities, reading, movies and watching sports.

Maryanne M. Mowen

Dr. Maryanne M. Mowen is associate professor of accounting emerita at Oklahoma State University. She received her Ph.D. from Arizona State University. With degrees in economics and history, she brings a unique interdisciplinary perspective to teaching and writing in both cost accounting and management accounting. Her research interests include management accounting, behavioral decision theory and Sarbanes-Oxley compliance. She also teaches an ethics course about the impact of Sarbanes-Oxley on the accounting profession. Dr. Mowen has published articles in journals such as Decision Science, Journal of Economic Psychology and Journal of Management Accounting Research. She has also served as a consultant to mid-sized and Fortune 100 companies and works with corporate controllers on management accounting issues. She advises entrepreneurs and nonprofit organizations. Outside the classroom, she enjoys hiking, travelling, reading mysteries and solving crossword puzzles.

Reviews

"I applaud the strategy of including comprehensive, integrative problems to be used with the text." - Kenneth P. Sinclair, Lehigh University

"I believe this [Integrative Exercises] is both an innovative and a great idea by Cengage for this particular course." - Dr. Ronald F. Premuroso, The University of Montana

Related Titles

Cornerstones of Cost Management Third Edition Chapter 5 Solutions

Source: https://www.cengage.co.uk/books/9781285751788

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