Chapter 1

Management accounting is given a contemporary focus of supporting managers in their role of enhancing customer and shareholder value through the effective use of organisational resources.

• Chapter 1 has been substantially rewritten.
• A new integrated case study on Wendy’s ice-cream franchise illustrates the management accounting concepts that are discussed.
• A collage of actual advertisements for management accounting positions breathes life into the nature of management accounting.
• There are two new sections: ‘Management accounting: contributing to strategy’ and ‘Implementing plans: information for decisions’.
• The number of end-of-chapter learning activities has been expanded from 32 to 42. Thirteen are new activities and three contain revised data.

Chapter 2

This chapter introduces students to the terminology of management accounting before covering concepts in more detail later in the book.

• There is a new ‘Real life’ section-’Managing costs across the value chain: the Asian experience’.
• Some material has been moved to Chapters 1, 3 and 4 to reduce unnecessary duplication.
• Thirteen of the 39 end-of-chapter learning activities are either new or include new data.

Chapter 3

This chapter maintains the current approach to explaining cost behaviour, cost drivers and cost estimation, although some material has been reworked to remove duplication with earlier chapters.

• The section ‘Engineered, committed and discretionary costs’ has been revised and moved from Chapter 2.
• Sixteen of the 54 end-of-chapter learning activities are either new or include new data.

Chapter 4

Chapters 4 focuses on conventional approaches to product costing, retained from the previous edition.

• Fifteen of the 46 end-of-chapter learning activities are either new or include new data.

Chapter 5

Chapter 5 focuses on conventional approaches to product costing, retained from the previous edition.

• The number of end-of-chapter learning activities has increased from 46 to 57. Twenty-four are either new or include new data.

Chapter 6

This chapter was developed in response to market feedback that few management accounting textbooks place sufficient focus on service industries and service costing, even though the Australian economy relies far more on service industries than on manufacturing industries. This chapter presents conventional and activity-based approaches to costing in a range of different service contexts.

• Chapter 6 has been substantially rewritten.
• There is a new section called ‘Challenges to service organisations in the contemporary business environment’.
• The chapter includes a major new section contrasting service billing to service costing.
• There is a new ‘Real life’ covering the billing system in a national accounting group.
• The number of end-of-chapter learning activities has expanded from 44 to 54. Eight are either new or include new data.

Chapter 7

This chapter helps students to develop a deeper understanding of the processes for allocating overhead costs to products. It includes an introduction to activitybased approaches to estimating overhead costs. There are no major changes from the previous edition.

• Fourteen of the 52 end-of-chapter learning activities are either new or include new data.

Chapter 8

Chapter 8 describes common problems with conventional product costing systems and outlines the various activity-based approaches to estimating product costs.

• The number of end-of-chapter learning activities has expanded from 51 to 57. Twenty are either new or include new data.
• Several ‘Real life’ sections have been updated to reflect recent experiences of activity-based costing.

Chapter 9

This chapter presents a step-by-step guide to the budgeting process and describes some of the behavioural issues associated with budgeting.

• Twenty-three of the 45 end-of-chapter learning activities are either new or include new data.

Chapter 10

Chapters 10 and 11 focus on conventional approaches to estimating and controlling product costs through standard costing for direct material and direct labour.

• The number of end-of-chapter learning activities has increased from 47 to 57. Twenty-seven are either new or include new data.

Chapter 11

This chapter looks at flexible budgets and standard costing for overhead. It also outlines the criticisms and advantages of standard costing.

• Twenty-two of the 54 end-of-chapter learning activities are either new or include new data.

Chapter 12

Contemporary developments in measuring financial performance are integrated with conventional responsibility accounting performance reports. Now included are real-time reporting, the impact of shared services and team-based structures. The transfer pricing section has been reformulated to provide a clearer demonstration of the operation of such systems.

• There is a new section on transfer pricing and service level agreements.
• The number of end-of-chapter learning activities has increased from 39 to 54. Twenty are new and 16 include new data.

Chapter 13

This chapter presents internal financial reports and traditional financial measures (e.g. return on investment) and an expanded section on value-based management. Up-to-date material on reward systems, including performance-linked pay, is also included.

• There is an expanded section on economic value added and calculation of the weighted average cost of capital
• The number of end-of-chapter learning activities has expanded from 41 to 48. Fifteen are new and 10 include new data.

Chapter 14

Chapter 14 contains detailed material on the formulation and use of non-financial performance measures and balanced scorecards.

• A new ‘Real life’ describes Centrelink’s approach to designing balanced scorecard measures of learning and growth.
• Thirteen of the 43 end-of-chapter learning activities are either new or include new data.

Chapter 15

This chapter relates contemporary cost management and time management to the generation of customer value. Cost management techniques include activitybased management, business process re-engineering and life-cycle costing. A detailed coverage of target costing is included. The material on time-based management includes measures of break-even time and time-to-market and the identification and management of time drivers.

• There is a new ‘Real life’ describing the approach of Flinders Medical Centre to managing time and costs in a hospital setting.
• Eleven of the 54 end-of-chapter learning activities are either new or include new data.

Chapter 16

Three important and cutting-edge topics, which can all be viewed as part of supply-chain management, are brought together in this chapter. A particular emphasis is placed on e-commerce contributions to supplier and customer management. Concepts covered include enterprise resource planning systems, customer relationship management and business-tobusiness relationships.

• The coverage of customer profitability analysis has been expanded and includes a graphical analysis.
• Nineteen of the 58 end-of-chapter learning activities are new and 14 contain new data.

Chapter 17

Chapter 17 covers corporate social responsibility, triple bottom line reports, environmental reporting and social audits. It explores how management accounting can help an organisation manage its environmental and social performance. Management accountants have the skills to monitor performance across a range of social and environmental dimensions.

• NEW CHAPTER!
• Ten new ‘Real life’ sections illustrate both current best practice and lessons learned from the past. These feature major corporations, retailers, educational institutions and public sector organisations.
• It includes a new integrated case study on Cormack Manufacturing.
• There are forty-two new end-of-chapter learning activities.

Chapter 18

Cost volume profit analysis is presented as a tool to model the profit impact of changes in selling prices, costs and product mix. It is explained using formulabased and graphical approaches.

• This chapter features a revised method for incorporating activity-based costing concepts in cost volume profit analysis.
• Seventeen of the 52 end-of-chapter learning activities are new and 22 include new data.

Chapter 19

This chapter demonstrates how management accounting information can be used for a variety of tactical decisions: whether to accept or reject a special order; make or buy a product; add or delete a product, service or department; and sell a joint product or process it further.

• There is a new ‘Real life’ on outsourcing at the Bank of Queensland.
• Fourteen of the 58 end-of-chapter learning activities are new and 17 include new data.

Chapter 20

Chapter 20 contains up-to-date and comprehensive coverage of the factors that influence product and service pricing. Various alternative pricing strategies are presented, such as value-based pricing and economic-value pricing. Included in this chapter are sections on legal restrictions on pricing and shortterm and long-term product mix decisions.

• There are two new ‘Real life’ sections: one on predatory pricing and the other on pricing strategies in the Australian airline industry.
• Eighteen of the 56 end-of-chapter learning activities are new and 14 include new data.

Chapter 21

This chapter outlines techniques for analysing longterm decisions that consider the time value of money.

• There is a new ‘Real life’ on investment in IT and communications technology
• Twenty-six of the 55 end-of-chapter learning activities are new or include new data.

Chapter 22

The analysis in Chapter 21 is extended in this chapter to include the impact of income taxes and the difficulties of justifying investments in advanced technologies.

• The number of end-of-chapter learning activities has expanded from 37 to 46. Nineteen are either new or include new data.