Management Accounting for Non-specialists 3rd Ed.

Eddie McLaney, Peter Atrill

Publisher: Pearson, 2002, 403 pages

ISBN: 0-273-65591-4

Keywords: Finance

Last modified: July 9, 2021, 5:20 p.m.

Accessible, learner-friendly and jargon-free, this best-selling text in management accounting is the ideal starting point for non-accounting students. Clear and concise it not only arms the reader with the basic principles of the subject but actively encourages students to build on these through an 'open-learning' approach, involving them in various questions and activities along the way.

The third edition has been thoroughly updated and revised improving existing features and expanding content.

Features include

  • New Chapter 11 on strategic management accounting
  • Added material on management accounting in practice
  • An updated and revised selection of end-of-chapter, self-assessment, and review questions.
  • Improved glossary of technical terms

Management Accounting for Non-specialists is suitable for all undergraduate and postgraduate students from any discipline taking an introductory course or module in management accounting. The 'open-learning' approach also makes it suitable for those studying independently or on distance-learning courses.

  1. Introduction to management accounting
    • Introduction
    • Objectives
    • What is accounting?
    • Who are the users?
    • Not-for-profit organisations
    • How useful is accounting information?
    • Accounting as a service function
    • Costs and benefits of accounting information
    • Accounting as an information system
    • Management and financial accounting
    • Management accounting information and management decisions
    • Management accounting and human behaviour
    • The changing nature of management accounting
    • Management accounting and information technoogy
    • The changing role of the management accountant
    • Business objectives
    • Summary
    • Key terms
    • Further reading
    • Review questions
  2. Relevant costs
    • Introduction
    • Objectives
    • What is meant by 'cost'?
      • A definition of cost
    • Relevant costs: opportunity and outlay costs
    • Sunk costs and committed costs
    • Qualitative factors of decisions
    • Self-assessment question 2.1
    • Summary
    • Key terms
    • Further reading
    • Review questions
    • Exercises
  3. Cost-volume-profit analysis
    • Introduction
    • Objectives
    • The behaviour of osts
      • Fixed costs
      • Variable costs
      • Semi-fixed (semi-variable) costs
    • Break-even analysis
    • Contribution
    • Margin of safety and operating gearing
    • Profit-volume charts
    • The economist's view of the break-even chart
    • Weaknesses of break-even analysis
    • Marginal analysis
      • Accepting/rejecting special contracts
      • The most efficient use of scarce resources
      • Make-or-buy decisions
      • Closing or continuation decisions
    • Self-assessment question 3.1
    • Summary
    • Key terms
    • Further reading
    • Review questions
    • Exercises
  4. Full costing
    • Introduction
    • Objectives
    • The nature of full costing
    • Uses of full cost information
    • Criticisms of full costing
    • Full costs in single-product operations
    • Full costs in multi-product operations
      • Direct and indirect costs
      • Job costing
      • Full costing and the behaviour of costs
      • The problem of indirect costs
      • Job costing: a worked example
    • Selecting the basis for charging overheads
      • Segmenting the overheads
      • Dealing with overheads on a departmental basis
      • Batch costing
      • Full cost as the break-even price
      • The forward-looking nature of full costing
      • Full costing in service industries
    • Self-assessment question 4.1
    • Summary
    • Key terms
    • Further reading
    • References
    • Review questions
    • Exercises
  5. Managing in a competitive environment
    • Introduction
    • Objectives
    • Costing and the changed business environment
    • Activity-based costing
      • Cost drivers
      • Cost pools
      • ABC and service industries
      • Criticism of ABC
    • Self-assessment question 5.1
    • Pricing
      • Economic theory
      • Some practical considerations
      • Full cost (cost-plus) pricing
      • Relevant/marginal cost pricing
      • Pricing strategies
    • Recent developments in pricing and cost management
      • Total life-cycle costing
      • Target costing
      • Kaizen costing
      • Benchmarking
    • Summary
    • Key terms
    • Further reading
    • References
    • Review questions
    • Exercises
  6. Budgeting
    • Introduction
    • Objectives
    • Budgets, long-term plans and corporate objectives
      • Step 1: Setting the aims and objectives of the business
      • Step 2: Identifying the options available
      • Step 3: Evaluating the options and making a selection
      • Step 4: Setting detailed short-term plans or budgets
      • Step 5: Collecting information on performance and exercising control
    • Time horizon of plans and budgets
    • Budgets and forecasts
    • Periodic and continual budgets
    • The interrelationship of various budgets
    • The uses of budgets
    • The budget-setting process
      • Step 1: Establish who will take responsibility
      • Step 2: Communicate budget guidelines to relevant managers
      • Step 3: Identify the key, or limiting, factor
      • Step 4: Prepare the budget for the area of the limiting factor
      • Step 5: Prepare draft budgets for all other areas
      • Step 6: Review and coordinate budgets
      • Step 7: Prepare the master budgets
      • Step 8: Communicate the budgets to all interesting parties
      • Step 9: Monitor performance relative to the budget
    • Incremental and zero-base budgeting
    • An example of a budget: the cash budget
    • Preparing other budgets
    • Activity-based budgeting
    • Non-financial measures in budgeting
    • Self-assessment question 6.1
    • Who needs budgets?
    • Summary
    • Key terms
    • Further reading
    • References
    • Review questions
    • Exercises
  7. Accounting for control
    • Introduction
    • Objectives
    • Using budgets for control — flexible budgets
      • Feedback and feedforward controls
    • Comparison of actual performance with the budget
      • Flexing the budget
      • Sales volume variance
      • Sales price variance
      • Materials variances
      • Labour variances
      • Fixed overhead variance
    • Standard quantities and costs
      • Labour cost standards and the learning-curve effect
    • Reasons for adverse variances
    • Non-operating profit variances
    • Investigating variances
    • Compensating variances
    • Necessary conditions for effective budgetary control
    • Limitations of the traditional approach to control through variances and standards
    • Behavioural aspects of budgetary control
    • Self-assessment question 7.1
    • Summary
    • Key terms
    • Further reading
    • References
    • Review questions
    • Exercises
  8. Making capital investment decisions
    • Introduction
    • Objectives
    • The nature of investment decisions
    • Methods of investment appraisal
    • Accounting rate of return (ARR)
    • Payback period (PP)
    • Net present value (NPV)
      • Interest lost
      • Risk
      • Inflation
      • Actions of a logical investor
      • Why NPV is superior to ARR and PP
    • Internal rate of return (IRR)
    • Some practical points
    • Investment decision making in practice
    • Self-assessment question 8.1
    • Dealing with risk in investment appraisal
      • Assessing the level of risk
      • Reacting to the level of risk
    • Management of the investment project
      • Stage 1: Determine investment funds available
      • Stage 2: Identify profitable project opportunities
      • Stage 3: Evaluate the proposed project
      • Stage 4: Approve the project
      • Stage 5: Monitor and control the project
    • Summary
    • Key terms
    • Further reading
    • References
    • Review questions
    • Exercises
    • Appendix: Preset value table
  9. Managing working captal
    • Introduction
    • Objectives
    • The nature and purpose of working capital
    • The scale of working capital
    • Management of stocks
      • Budgets of future demand
      • Financial ratios
      • Recording and reordering systems
      • Levels of control
      • Stock-management models
      • Materials requirement planning (MRP) system
      • Just-in-time (JIT) stock management
    • Management of debtors
      • Which customers should receive credit?
      • Length of credit period
      • Cash discounts
      • Self-assessment question 9.1
      • Collection policies
      • Credit management and the small business
    • Management of cash
      • Why hold cash?
      • How much cash should be held?
      • Controlling the cash balance
      • Cash budgets and the management of cash
      • Operating cash cycle
      • Cash transmission
    • Management of trade creditors
      • Controlling trade creditors
    • Management of bank overdrafts
    • Summary
    • Key terms
    • Further reading
    • Review questions
    • Exercises
  10. Measuring and controlling divisional performance
    • Introduction
    • Objectives
    • Why do businesses divisionalise?
    • Divisional performance measurement
      • Return on investment
      • Residual income
      • Divisional performance measures and long-term, performance
      • Further measurement issues
    • Self-assessment question 10.1
    • Transfer pricing
      • Transfer pricing olicies
      • Market prices
      • Variable cost of goods or services
      • Full cost of goods or services
      • Negotiated prices
    • Summary
    • Key terms
    • Further reading
    • References
    • Review questions
    • Exercises
  11. Strategic management accounting
    • Introduction
    • Objectives
    • What is strategic management?
    • What is strategic management accounting?
    • Assessing a strategic change
    • Competitor probability analysis
    • Customer probability analysis
    • The quest for shareholder value
      • Creating shareholder value
      • The need for new forms of measurement
      • Net present value (NPV) analysis
      • Extending NPV analysis: shareholder value analysis
      • Measuring free cash flows
      • Managing the business with SVA
      • The implications of SVA
      • Economic value added (EVA®)
      • EVA® and SVA
      • EVA® or SVA?
    • Non-financial measures of performance
    • The balanced scorecard
    • Self-assessment question 11.1
    • Summary
    • Key terms
    • Further reading
    • References
    • Review questions
    • Exercises
  • Appendix A: Glossary of key terms
  • Appendix B: Solutions to self-assessment questions
  • Appendix C: Solutions to selected exercises

Reviews

Management Accounting for Non-specialists

Reviewed by Roland Buresund

Outstanding ********* (9 out of 10)

Last modified: July 18, 2007, 3:27 p.m.

Oh NO! Why didn't I have this book while studying for my MBA?

Truth to tell, it is a bit thin, but very readable. Especially if you're not into accounting but only wants to know enough to become a pretty good manager.

Covers the basics very efficiently and fulfills its promise very well. Recommended.

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