For Loredana and Alexis [600138]

For Loredana and Alexis

x

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ACCOUNTING FOR MANAGERS

Acknowledgements
The author acknowledges the indirect contribution of Stan Brignall at Aston to
this text, which is in no small part the result of team teaching at Aston over the
last three years. The author is also grateful for the helpful suggestions made by
Amanda Nayak of Birmingham and Mike Tayles of Bradford. He also thanks SteveH a r d m a na n dS a r a hB o o t ha tJ o h nW i l e yf o rt h e i rs u p p o r ta n dh e l p f u la d v i c ethroughout the writing of the book.

Part I

4

2
Accounting and its Relationship
to Shareholder Value and BusinessStructure

4
Management Control, Management
Accounting and its Rational-Economic
Assumptions

MANAGEMENT CONTROL, MANAGEMENT ACCOUNTING

CONSTRUCTING FINANCIAL STATEMENTS
69
Reporting profitability
Businesses exist to make a profit. Thus, as we saw in Chapter 3, the basic accounting
concept is that:

106
ACCOUNTING FOR MANAGERS
costs

134

OPERATING DECISIONS

OPERATING DECISIONS
139
Table 9.12 Vehicle Parts Co.
Existing
machineNew CNC
machine
Original cost 250,000 1,000,000

HUMAN RESOURCE DECISIONS

156
ACCOUNTING FOR MANAGERS

ACCOUNTING DECISIONS

186

188

204

222

242

RESEARCH IN MANAGEMENT ACCOUNTING
249

254
ACCOUNTING FOR MANAGERS
Dent’s case study of EuroRail is a highly regarded field study of accounting
change in which organizations are portrayed as cultures, i.e. systems of knowl-
edge, belief and values. Prior to the study, the dominant culture in EuroRail was
engineering and production, but this culture was displaced by economic andaccounting concerns that constructed the railway as a profit-seeking enterprise.Dent traced the introduction of a revised corporate planning system, the amend-
ment of capital expenditure approval procedures and the revision of budgeting
systems, each of which gave power t o business managers. Dent describes how
accounting played a role ‘in constructing specific knowledges’ (p. 727).
Taken together, these readings provide a practical critique of traditional costing
methods, several theoretical perspectives from which accounting can be viewedand a field study of how accounting changed the reality in one organization.

260

RESEARCH IN MANAGEMENT CONTROL

292

MANAGERIAL ACCOUNTING RESEARCH
299

316

318

352

354

356

364

382
ACCOUNTING FOR MANAGERS
žMake suggestions to management to overcome any problems you have
identified.
The case studies are also provided with suggested solutions (Appendix 4) so that
students can self-test themselves.

392
ACCOUNTING FOR MANAGERS
If the company has a limited production capacity, preventing all its budgeted sales
from being produced, how should Magnificent rank its products for manufacturein order to maximize profitability?

410
ACCOUNTING FOR MANAGERS
Table A2.4
Sales 1,100,000
Less cost of sales
Opening stock 150,000Purchases 650,000

SOLUTIONS TO QUESTIONS

SOLUTIONS TO QUESTIONS

SOLUTIONS TO QUESTIONS
425
If £120 ,000 of costs were recovered over the number of units produced (20 ,000+20,000=
40,000), the purchasing cost per unit would be £3 (£120 ,000/40,000 units) for both L and M.
11.7
Purchasing Quality control Despatch
Total cost £60 ,

430

Table A3.6

456

SOLUTIONS TO CASE STUDIES
459
The breakeven price for 100 passengers is:
12

Author Index
The author index contains a list of the first-named author only.
Alexander, D., 171

468