Note From the Authors...

Our goal in writing this text is to teach students managerial accounting concepts that will improve their ability to make sound business decisions. The text differs from traditional managerial accounting books in the following respects.

We emphasize the development of decision making skills.
Notice that the table of contents places decision making up front. Procedural topics like manufacturing cost flow, job-order, and process costing are placed at the end of our text while traditional books discuss these topics early. We put decision making front and center because we believe it is important. Beyond placement we introduce topics within a decision making context. For example, in Chapter 2 we introduce “cost behavior” within the context of operating leverage. We focus on how cost behavior affects decisions such as “am I sure enough that volume will be high that I want to employ a fixed cost structure or do I want to reduce operating leverage risk by building a variable cost structure. Further, notice that Chapter 3 is written around a realistic business scenario where a management team is using CVP data to evaluate decision alternatives. Indeed, all chapters are written in a narrative style with content focused on a decision making scenarios. This makes the text easy to read and interesting as well as informative.

We employ a step-wise learning model.
We believe students learn better if concepts are isolated and introduced progressively in a step-wise fashion. For example, understanding cost behavior is essential to comprehending the need for allocation and an understanding of allocation is essential for comprehending the concept of relevance. Likewise, understanding cost behavior and allocation is critical to comprehending the purpose and function of the manufacturing overhead account. This step-wise learning approach also explains the way chapters are arranged in the text. We provide thorough coverage of basic concepts before students are expected to use those concepts. Traditional texts fail to recognize the importance of this learning principle.

We place greater emphasis on service companies.
For example, our budgeting chapter uses a merchandising business while most traditional texts use a manufacturing company. Using a service company is not only more relevant but also simplifies the learning environment thereby making it easier for students to focus on budgeting concepts rather than procedural details. This is only one example of our efforts to place greater emphasis on service companies.

We provide extensive coverage of corporate governance.
The accounting scandals of Enron, MCI WorldCom, HealthSouth and others led to the enactment the Sarbanes-Oxley Act (SOX). SOX places significant pressure on managerial accountants to identify and eliminate fraudulent reporting. This text not only provides coverage of appropriate content but also provides a framework for emphasizing ethics throughout the text. We encourage you to review the content on pages 19 through 23 in Chapter 1. Further, look at Exercises 16 and 17, and Problem 26 to see how students are challenged to apply the new content. Also, notice that a corporate governance case is included in the Analyze, Think, and Communicate (ATC) section of end-of-chapter materials for every chapter in the text. Specifically, look at ATC Problem 5 in each chapter.

Tom Edmonds • Bor-Yi Tsay • Phil Olds