Ray H. Garrison,
Brigham University G. Richard Chesley,
Saint Mary's University Ray F. Carroll,
Dalhousie University Alan Webb,
University of Waterloo
ISBN: 0070980829 Copyright year: 2009
What's New
What’s New in the Eighth Edition
The eighth Canadian edition has been reviewed extensively to make improvements over previous editions. The results of peer reviews and the authors’ efforts are reflected in the revisions and reorganization presented in nearly every chapter. Exercises, problems, cases and research questions have been changed and new innovative topics such as the environment, XBRL and enterprise systems have been added. We
believe the changes have improved an already friendly text and should facilitate an even greater understanding of key managerial accounting issues.
In the eighth edition we describe the five logical groupings of the text chapters and the connections
readers should observe when studying the chapters. Section 1 groups Chapters 1 and 2 which serve as a foundation for the material in subsequent chapters. Section 2 groups Chapters 3 to 8 as a discussion of costing techniques. Costing serves as useful study for all readers and represents a primary information base for management decision making. Section 3 groups Chapters 9, 10 and 11 which cover key planning and control topics, a natural follow-up to costing techniques. Section 4 combines Chapters 12 and 13 to present
the decision analysis for both short- and long-term situations. Section 5 is the logical conclusion of the discussion in the book because it covers the financial statement analysis used by the various stakeholders of the organization. The material in Chapter 14 is presented online because of the need to keep the length of the book reasonable and because some academic programs include financial statement analysis either as part of a financial accounting course or as a stand-alone course. The specific changes in each of the individual chapters of the eighth edition are presented below.
• Chapter 1 provides a discussion of how strategy, budget planning including business plans, and the environment interact with the management accountant. The section on ethics has been modified to include approaches for dealing with situations involving ethical violations. Recent developments in the business environment were rewritten to reflect changes.
• Chapter 2 retains its coverage of the nature of costs but the appendix on quality and its costs has been moved to Chapter 11 where it can be combined with the discussion of balanced scorecards.
• Chapter 3 on job costing adds a discussion on the impact of capacity definitions on costing and the information available for managers. This discussion also links to later chapters on constrained decision analysis and long-term capital budgeting.
• Chapter 4 was rewritten to provide a logical presentation of process costing and an examination of how service departments influence overhead costing. An online appendix is available for the treatment of lost units, an important issue for advancing process costing and a means of presenting a foundation for environmental cost analysis.
• Chapter 5 on activity-based costing is relocated to follow the discussion of costing techniques in Chapters 3 and 4. An extensive rewrite of this chapter highlights the importance of ABC and its limitations. A new exhibit has been developed to provide an overview of the mechanics of ABC. Also, a new appendix has been added to expand the discussion of using ABC for external reporting.
• Chapters 6 and 7 retain their popular content of cost behaviour and cost-volume-profit analysis for decision analysis material that follows. Chapter 7 also provides an online discussion of how uncertainty is incorporated in cost-volume-profit analysis.
• Chapter 8 on variable costing contains an elaboration of conversions of absorption to variable costing and vice versa. In addition, the application of variable costing to segment costing is now included because of its natural connection and the foundation it provides for budgeting, control and decision making.
• Chapter 9 now includes a more focused discussion of the master budget and incorporates the use of flexible budgets as a decision and control tool. In addition, a new comprehensive review problem has been developed. An online appendix describes inventory management practices for those seeking a more
advanced discussion.
• Chapter 10 on standard costing incorporates both variable and fixed overhead analysis. The discussion of the variable overhead spending variance has been expanded to improve understanding. The material on mix and yield variances has been moved to an appendix. An online appendix on the role of learning in labour cost estimation is provided for those wishing to integrate regression analysis of cost behaviour with labour estimation in learning environments.
• Chapter 11 now presents the material on transfer pricing in the body of the chapter. The balanced scorecard section has been revised to improve focus and to incorporate quality costs. The section on international aspects of quality has been updated to include ISO 14000, which deals with environmental management systems.
• Chapter 12 on short-term decision analysis incorporates an example of variable cost pricing. A new decision aid has been added for “make or buy” decisions. The discussion of the theory of constraints has been expanded.
• Chapter 13 was rewritten to improve the logical flow of longterm budgeting and analysis. Non-tax and tax influences were incorporated in a consistent presentation of the structure of the budget and decision analysis.
• Chapter 14 is an online chapter with content similar to the seventh edition discussion of financial statement analysis. Logic and flow have been improved to suit the chapter’s use by management and stakeholders.
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2009 McGraw-Hill Higher Education