Robert
Kaplan , Harvard Business School
Anthony A. Atkinson , University of Waterloo
Published
January 1998 by Prentice Hall Business Publishing
Copyright
1998, 798 pp. Cloth
Leading-edge treatment of innovative management accounting issues used by major companies
throughout the world. Will appeal to professors that want a systematic management-
oriented approach to advanced management topics. Each chapter is accompanied by cases to
illustrate the concepts discussed.
In
addition to the many new cases added, old favorites have been retained and updated (i.e.,
incentive compensation, decentralization and management control systems).
Introduction.
Origins of Cost Management Systems. The Scientific Management Movement. Management Control
for Diversified Organizations. From Cost Management to Cost Accounting. Recent
Developments in Manufacturing and Service Companies. Contemporary Management Accounting
Developments. Summary.
1. Understanding Cost Behavior.
The Role of Management Accounting. Understanding Cost Behavior. An Example of Cost
Structure. Handling Indirect (Common) Costs. Computing the Cost of Unused Capacity.
Cost-Volume-Profit Analysis. Summary. Problems.
2. Short-Term Budgeting, Resource Allocations, and Capacity Cost.
The Example. Short-Term Planning and Budgeting. Activities, Resource Use, and Costs.
Optimizing the Use of Short-Term Resources. Opportunity Costs, Capacity Costs, and the
Theory of Constraints. This Issue of Multiple Resources. The Role of Cost Information in
Allocating Short-Term Resources. Budgeting Operations. Summary. Problems. Cases.
3. Assigning Resource Costs to Production Cost Centers.
Why Assign Service Department Costs? Measuring Costs of Using Service Departments. Avoid
Estimates and Allocations for Cost Control. A Fundamental Cost Accounting Equation.
Assigning Service Department Costs. Service Departments Not Directly Supporting Production
Output. Primary and Secondary Activities. The Nature and Problems of Reciprocal Services.
Special Case for Arbitrary Allocation. Summary. Appendix 3.1: The Reciprocal Cost
Procedure. Problems. Case.
4. Activity-Based Costing.
Assigning Service Department Costs to Activities. Assigning Service Department Costs: Some
Fixed and Some Variable. Activity Cost Drivers. Designing the Optimal System. Summary.
Cases.
5. Activity-Based Management.
The Product Profitability Whale Curve. Pricing. Using ABC for Analyzing Customer
Profitability. Product Substitution. Redesign Products. Improve Processes and Operations
Strategy. Technology Investment. Eliminate Products. Activity-Based Management: A Summary.
Problems. Cases.
6. Cost-Based Decision Making.
Target Costing. Kaizen Costing. Target Costing: A Comprehensive Example. Life Cycle
Costing. Other Costing Tools. Environmental, Salvage, and Disposal Costs. Conclusion.
Problems. Cases.
7. Decentralization.
Why Decentralize. Organization of Decentralized Units. Developing a Performance Measure
for Decentralized Operating Units. Summary. Problems. Cases.
8. The Balanced Scorecard: Measuring Total Business Unit Performance.
The Balanced Scorecard. Linking Multiple Scorecard Measures to a Single Strategy.
Diagnostic Versus Strategic Measures. Four Perspectives: Are They Sufficient? Summary.
Cases.
9. Financial Measures of Performance.
The Nature of Financial Control. Control in the Aggregate Using Financial Measures.
Control in the Small Using Nonfinancial Measures. Operations Control and Management By
Exception Using Variance Analysis. Productivity Measures. Summary. Problems. Cases.
10. Financial Measures of Performance: Return on Investment (ROI) and Economic Value
Added (EVA).
Relating Profits to Assets Employed. A Historical Perspective. The Matsushita Internal
Capital System. The Danger of ROI Control. Technical Shortcomings of the ROI Measure.
Economic Value Added (Residual Income). Expense Versus Capitalize. Price-Level
Adjustments. Depreciation Method. Summary of Technical Adjustments to ROI and EVA
Calculations. Linking ABC to Economic Value Added: Assigning Assets. Summary. Problems.
Cases.
11. Measuring Customer, Internal Business Process, and Employee Performance. Process
Perspective.
Customer Perspective. Internal Business Perspective: Operations and Innovation Processes.
Employee Capabilities. Summary and Conclusion. Problems. Cases.
12. Investing to Develop Future Capabilities Technology.
Is a New Theory Needed? Measuring All The Benefits from the New Process. Investing in
Organizational Capabilities. Summary on Building Organizational Capabilities.
13. Incentive and Compensation Systems.
The Expectancy View of Behavior. Intrinsic and Extrinsic Rewards. Tying Rewards to
Performance. Important Attributes of Compensation Systems. Rewarding Other Organization
Members. Summary. Problems. Cases.
14. Formal Models for Budgeting and Incentive Contracts.
Issues and Term in Formal Incentive Models. Problems of Obtaining Information for
Standards and Budgets. The Agency Model. Eliciting Honest Revelation of Privately Held
Belief. The Role of Insurance. Summary. Problems.
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