Garrison Managerial Accounting 17th Edition presents a comprehensive and up-to-date overview of the principles and practices of managerial accounting. This authoritative text provides a clear and concise explanation of the concepts and techniques used by managers to plan, control, and evaluate their organizations’ operations.
With its focus on real-world applications, Garrison Managerial Accounting 17th Edition provides students with a practical understanding of how managerial accounting is used to make informed decisions and improve organizational performance.
Introduction
Managerial accounting is the process of identifying, measuring, analyzing, interpreting, and communicating financial information to managers for decision-making purposes.
The purpose of managerial accounting is to provide managers with the information they need to plan, control, and evaluate their operations.
Managerial accounting is important because it helps managers to make informed decisions about how to allocate resources, set prices, and manage costs.
Structure and Organization of the Book
The book is divided into seven parts:
- Part 1: Introduction to Managerial Accounting
- Part 2: Cost Accounting Systems
- Part 3: Cost Allocation and Activity-Based Costing
- Part 4: Budgeting and Performance Measurement
- Part 5: Cost-Volume-Profit Analysis
- Part 6: Capital Budgeting
- Part 7: Special Topics in Managerial Accounting
Cost Accounting Systems
Cost accounting systems are used to track and report the costs of a company’s products or services.
Types of Cost Accounting Systems
- Job costing systems
- Process costing systems
- Activity-based costing systems
Advantages and Disadvantages of Each Type of System, Garrison managerial accounting 17th edition
The advantages and disadvantages of each type of system are as follows:
| Type of System | Advantages | Disadvantages |
|---|---|---|
| Job costing systems | – Provides detailed information about the costs of individual jobs or products. | – Can be complex and time-consuming to implement. |
| Process costing systems | – Provides more timely information than job costing systems. | – Less detailed than job costing systems. |
| Activity-based costing systems | – Provides more accurate information about the costs of products or services than traditional costing systems. | – Can be complex and time-consuming to implement. |
Cost Allocation and Activity-Based Costing
Cost allocation is the process of assigning costs to different products or services.
Methods of Cost Allocation
- Direct costing
- Indirect costing
- Activity-based costing
Advantages and Disadvantages of Activity-Based Costing
The advantages and disadvantages of activity-based costing are as follows:
- Advantages
- Provides more accurate information about the costs of products or services than traditional costing systems.
- Can help managers to identify and reduce costs.
- Disadvantages
- Can be complex and time-consuming to implement.
- May not be appropriate for all companies.
Budgeting and Performance Measurement
Budgeting is the process of planning and allocating resources.
Types of Budgets
- Operating budgets
- Capital budgets
- Cash budgets
Process of Budget Preparation and Execution
The process of budget preparation and execution includes the following steps:
- Develop a budget.
- Execute the budget.
- Monitor the budget.
- Evaluate the budget.
Role of Performance Measurement in Managerial Accounting
Performance measurement is the process of assessing how well a company is performing.
Performance measurement is important because it helps managers to identify areas where the company can improve its performance.
Cost-Volume-Profit Analysis
Cost-volume-profit analysis (CVP analysis) is a technique that is used to analyze the relationship between costs, volume, and profit.
Types of CVP Analysis
- Breakeven analysis
- Profitability analysis
- Sensitivity analysis
Advantages and Disadvantages of CVP Analysis
The advantages and disadvantages of CVP analysis are as follows:
- Advantages
- Can help managers to make informed decisions about how to price products or services.
- Can help managers to identify areas where the company can improve its profitability.
- Disadvantages
- Can be complex and time-consuming to perform.
- May not be accurate if the company’s costs or volume are not stable.
Capital Budgeting: Garrison Managerial Accounting 17th Edition
Capital budgeting is the process of evaluating and selecting long-term investment projects.
Methods of Capital Budgeting
- Net present value
- Internal rate of return
- Payback period
Advantages and Disadvantages of Each Method
The advantages and disadvantages of each method are as follows:
| Method | Advantages | Disadvantages |
|---|---|---|
| Net present value | – Considers the time value of money. | – Can be complex and time-consuming to calculate. |
| Internal rate of return | – Easy to understand and interpret. | – Does not consider the time value of money. |
| Payback period | – Easy to calculate. | – Does not consider the time value of money. |
Special Topics in Managerial Accounting
Role of Managerial Accounting in Decision Making
Managerial accounting plays a vital role in decision making by providing managers with the information they need to make informed decisions.
Ethical Considerations in Managerial Accounting
Managers must be aware of the ethical considerations that are involved in managerial accounting.
Current Trends in Managerial Accounting
The following are some of the current trends in managerial accounting:
- The use of big data
- The use of cloud computing
- The use of artificial intelligence
Managerial Accounting in Different Industries
Managerial accounting is used in a variety of industries, including:
- Manufacturing
- Retail
- Healthcare
- Financial services
FAQ Summary
What is the purpose of managerial accounting?
Managerial accounting provides information and analysis to help managers plan, control, and evaluate their organizations’ operations.
What are the different types of cost accounting systems?
The three main types of cost accounting systems are job costing, process costing, and activity-based costing.
What is the importance of budgeting in managerial accounting?
Budgeting is essential for planning and controlling an organization’s financial resources.
What is the role of performance measurement in managerial accounting?
Performance measurement helps managers assess the effectiveness of their organizations’ operations and identify areas for improvement.
