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Cover of Fundamentals of Managerial Accounting v3.0
Published: 
April 2021
Page Count: 
842
ISBN (Digital): 
978-1-4533-9942-2

Fundamentals of Managerial Accounting

Version 3.0
By Kurt Heisinger and Joe Ben Hoyle

Included Supplements

Key Features

  • Each chapter starts with a realistic managerial scenario outlining an issue that must be addressed by the management accountant, followed by a modular chapter format built around learning objectives. Each learning objective includes:
    • embedded author-recorded videos using examples directly from the text
    • detailed descriptions of important concepts
    • section summary aligned with learning objectives called “Key Takeaways”
    • flashcards to help reinforce student learning
    • quizzes to help students assess their knowledge
    • active exercises with solutions called “Review Problems” which engage students in active learning and help them master key concepts, and
    • extensive end-of-chapter questions, exercises, problems, and cases closely aligned with the material presented within each learning objective.
  • Nearly 100 author-recorded video lessons directly tied to each section of the text enrich student learning and can be used for all class formats including online, hybrid, and in-class. To provide consistency, videos use examples directly from the text and are embedded at the beginning of each learning objective section.
  • A question and answer approach is used throughout text to stimulate critical-thinking skills.  
  • Essential topics are covered while maintaining academic rigor using a concise and jargon-free approach.
  • Author-written supplementary materials provide robust instructional support and include an instructor’s manual, solutions manual, test bank, quizzes embedded into the online reader version, flashcards, PowerPoint lecture slides, student working papers, and online homework questions.
  • Hyperlinks to companies and organizations are provided throughout the text to engage students with real-world applications of the concepts presented.
  • The extensive instructor manual provides effective guidance for instructors teaching online, in-class, or hybrid courses.
  • A free homework system is included that grades questions, furnishes feedback to students and class statistics to instructors. Multiple versions of the same question are available to minimize student copying.
  • Excel-based working papers customized for all end-of-chapter homework items are provided and can be completed in Excel or used as a template for hand-written homework.  
  • End-of-chapter assignments also include ethics cases, internet projects, group projects, real company analysis, and projects in Excel.
  • The text is customizable.

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Fundamentals of Managerial Accounting is suitable for introductory managerial accounting courses taught at the undergraduate level at two- and four-year colleges and universities. It can also be used effectively with graduate-level courses that cover the fundamentals of managerial accounting. 

Fundamentals of Managerial Accounting employs a clear and concise approach for students to learn the basics of key managerial accounting concepts. It also emphasizes the importance of understanding how managerial accounting fits into the larger picture of decision-making within organizations. Carefully developed to follow the standard scope and sequence of typical managerial accounting courses, this textbook encourages students to think like managers rather than to simply memorize concepts.  

New in This Version

  • Ethics cases throughout the text (e.g., Chapter 1 skill-building case 53; Chapter 2 skill-building case 40; Chapter 5 comprehensive case 51; Chapter 6 comprehensive case 63; Chapter 7 skill-building case 65)
  • Updated Institute of Management Accountants (IMA) Statement of Ethical Professional Practice (Chapter 1, Table 1.2)
  • New Business-in-Action vignettes and related end-of-chapter questions include:
    • Fraud at engine manufacturing company (Business-in-Action 1.3)
    • Efficient packaging at Amazon (Business-in-Action 3.4)
    • Oil industry price per barrel break-even point (Business-in-Action 6.1)
    • Outsourcing decision at Parallax (Business-in-Action 7.1)
    • Store closing decision at Best Buy (Business-in-Action 7.2)
    • Product line decision at Chevrolet (Business-in-Action 7.3)
    • Tesla’s China production facility decision (Business-in-Action 8.1)
    • Retailers budgeting for holiday product returns (Business-in-Action 9.1)
    • Biggest advertising spenders and budgeting for advertising spending (Business-in-Action 9.2)
    • Direct materials variance analysis and the impact of rising cocoa prices on chocolate producers (Business-in-Action 10.2)
    • Direct labor variance analysis and automating fulfillment of online grocery orders at Walmart (Business-in-Action 10.3)
    • Segmented income statement at Hewlett Packard (Business-in-Action 11.2)
    • Internal performance measures at General Electric (Business-in-Action 11.3)
    • Analyzing cash flows at Southwest Airlines (Business-in-Action 12.1)
    • Comparing cash flows at Home Depot and Lowe’s (Business-in-Action 12.2)
    • Dividend payments and stock repurchases at Apple (Business-in-Action 12.4)
  • About the Authors
  • Acknowledgments
  • Dedication
  • Preface

    • Chapter 1: How Is Managerial Accounting Used to Help Organizations?

  • 1.1 Comparing Managerial Accounting and Financial Accounting
  • 1.2 How Managers Use Planning and Control Functions
  • 1.3 Finance and Accounting Organizational Structure
  • 1.4 Ethical Standards for Accountants
  • 1.5 Computerized Accounting Systems
  • 1.6 Cost Classifications
  • 1.7 The Flow of Product Costs Through Inventory Accounts
  • 1.8 Manufacturing Company Income Statement
  • 1.9 End-of-Chapter Exercises

    • Chapter 2: How Do Organizations Use Job Costing to Track Production Costs?

  • 2.1 Distinguishing Between Job Costing and Process Costing
  • 2.2 Using a Job Costing System to Track Production Costs
  • 2.3 Assigning Manufacturing Overhead Costs to Jobs
  • 2.4 Using a Job Costing System in Service Organizations
  • 2.5 Summary of Cost Flows and Profitability Analysis at Custom Furniture Company
  • 2.6 End-of-Chapter Exercises

    • Chapter 3: How Do Organizations Use Activity-Based Costing to Allocate Overhead Costs?

  • 3.1 Why Do Organizations Allocate Overhead Costs?
  • 3.2 Plantwide and Department Allocation of Overhead Costs
  • 3.3 Activity-Based Costing Allocation of Overhead Costs
  • 3.4 Using Activity-Based Management to Improve Operations
  • 3.5 Activity-Based Costing (ABC) and Activity-Based Management (ABM) in Service Organizations
  • 3.6 Variations of Cost Allocation and Cost Analysis
  • 3.7 End-of-Chapter Exercises

    • Chapter 4: How Do Organizations Use Process Costing to Track Production Costs?

  • 4.1 Comparing Product Cost Flows for Job Costing and Process Costing
  • 4.2 Product Cost Flows in a Process Costing System
  • 4.3 How to Calculate Equivalent Units
  • 4.4 Using the Weighted Average Method for Process Costing
  • 4.5 Preparing a Production Cost Report
  • 4.6 End-of-Chapter Exercises

    • Chapter 5: How Are Cost Behavior Patterns Used to Predict Costs?

  • 5.1 How Costs Behave With Changes in Volume
  • 5.2 Methods For Estimating Fixed and Variable Costs
  • 5.3 Contribution Margin Income Statement
  • 5.4 Relevant Range and Nonlinear Costs
  • 5.5 Appendix: Regression Analysis Using Excel
  • 5.6 End-of-Chapter Exercises

    • Chapter 6: How Is Cost-Volume-Profit Analysis Used to Make Decisions?

  • 6.1 Cost-Volume-Profit Analysis for Single-Product Companies
  • 6.2 Cost-Volume-Profit Analysis for Multiple-Product and Service Companies
  • 6.3 Performing Sensitivity Analysis Using Cost-Volume-Profit Models
  • 6.4 How Changes in Cost Structure Impact Cost-Volume-Profit Analysis
  • 6.5 Using a Contribution Margin With Resource Constraints to Make Decisions
  • 6.6 Performing Cost-Volume-Profit Analysis For Companies With Income Taxes
  • 6.7 Using Variable Costing for Decision Making
  • 6.8 End-of-Chapter Exercises

    • Chapter 7: How Are Relevant Revenues and Costs Used to Make Short-Term Decisions?

  • 7.1 Using Differential Analysis to Make Short-Term Decisions
  • 7.2 Using Differential Analysis for Make-or-Buy Decisions
  • 7.3 Using Differential Analysis for Product Line Decisions
  • 7.4 Using Differential Analysis for Customer Decisions
  • 7.5 Review of Cost Terms Used in Differential Analysis
  • 7.6 Using Differential Analysis for Special Order Decisions
  • 7.7 Cost-Plus Pricing and Target Costing
  • 7.8 Identifying and Managing Bottlenecks
  • 7.9 Qualitative Factors to Consider for Decision Making
  • 7.10 Appendix: Making Decisions Involving Joint Costs
  • 7.11 End-of-Chapter Exercises

    • Chapter 8: How Is Capital Budgeting Used to Make Long-Term Decisions?

  • 8.1 Using Capital Budgeting to Make Long-Term Decisions
  • 8.2 Net Present Value (NPV)
  • 8.3 Internal Rate of Return (IRR)
  • 8.4 Issues Impacting NPV and IRR
  • 8.5 Payback Method
  • 8.6 Complexities of Estimating Cash Flows
  • 8.7 Performing Capital Budgeting For Companies With Income Taxes
  • 8.8 Appendix: Present Value Tables
  • 8.9 End-of-Chapter Exercises

    • Chapter 9: How Do Organizations Create and Analyze Operating Budgets?

  • 9.1 The Process of Planning and Controlling Operations
  • 9.2 The Budgeting Process
  • 9.3 Creating the Master Budget in a Manufacturing Organization
  • 9.4 Creating the Master Budget in a Nonmanufacturing Organization
  • 9.5 Ethical Issues in Creating Operating Budgets
  • 9.6 End-of-Chapter Exercises

    • Chapter 10: How Is Cost Variance Analysis Used to Evaluate Performance?

  • 10.1 Flexible Budgets and Cost Variance Analysis
  • 10.2 Establishing Standard Costs to Control Operations
  • 10.3 Using Direct Materials Variance Analysis to Evaluate Performance
  • 10.4 Using Direct Labor Variance Analysis to Evaluate Performance
  • 10.5 Using Variable Manufacturing Overhead Variance Analysis to Evaluate Performance
  • 10.6 Determining Which Cost Variances to Investigate
  • 10.7 Using Variance Analysis with Activity-Based Costing to Evaluate Performance
  • 10.8 Using Fixed Manufacturing Overhead Variance Analysis to Evaluate Performance
  • 10.9 Appendix: Recording Standard Costs and Variances
  • 10.10 End-of-Chapter Exercises

    • Chapter 11: How Are Responsibility Centers Used to Evaluate Performance?

  • 11.1 Reasons for Decentralizing an Organization
  • 11.2 Controlling Decentralized Organizations
  • 11.3 Using Segmented Income to Evaluate Investment Centers
  • 11.4 Using Return on Investment (ROI) to Evaluate Investment Centers
  • 11.5 Using Residual Income (RI) to Evaluate Investment Centers
  • 11.6 Using Economic Value Added (EVA) to Evaluate Investment Centers
  • 11.7 Wrap-Up of Chapter Example
  • 11.8 Appendix: Using Transfer Pricing Between Divisions
  • 11.9 End-of-Chapter Exercises

    • Chapter 12: How Is the Statement of Cash Flows Prepared and Used to Evaluate Performance?

  • 12.1 Purpose of the Statement of Cash Flows
  • 12.2 Three Categories of Cash Flow Activities
  • 12.3 Preparing the Statement of Cash Flows in Four Steps
  • 12.4 Preparing the Statement of Cash Flows Using the Indirect Method
  • 12.5 Analyzing Cash Flow Information
  • 12.6 Appendix: Preparing the Statement of Cash Flows Using the Direct Method
  • 12.7 End-of-Chapter Exercises

    • Chapter 13: How Do Managers Use Financial and Nonfinancial Performance Measures?

  • 13.1 Using Trend Analysis to Evaluate Financial Information
  • 13.2 Using Common-Size Analysis to Evaluate Financial Information
  • 13.3 Using Ratio Analysis to Evaluate Financial Information
  • 13.4 Wrap-Up of Chapter Example
  • 13.5 Nonfinancial Performance Measures: The Balanced Scorecard
  • 13.6 End-of-Chapter Exercises
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    Instructor’s Manual

    Instructor’s Manual

    The Instructor’s Manual guides you through the main concepts of each chapter and important elements such as learning objectives, key terms, and key takeaways. Can include answers to chapter exercises, group activity suggestions, and discussion questions.

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    PowerPoint Lecture Notes

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    Kurt Heisinger Sierra College

    Kurt Heisinger (CMA, CPA, MBA) teaches financial and managerial accounting full time and holds a tenured position at Sierra College. He recently received the Faculty of the Year award, which was voted on and presented by the Associated Students of Sierra College. Kurt has also taught accounting classes at the University of California at Davis, Sacramento City College, and American River College.

    Kurt began his career in public accounting with Ernst & Young and continued as a manager of a large local accounting firm in Northern California. He received his MBA at the University of California at Davis and is a certified management accountant (CMA) and certified public accountant (CPA). The knowledge Kurt gained from his seven years in industry and more than twenty years in education has enabled him to write a clear and concise book aimed at students with a variety of backgrounds.

    Joe Ben Hoyle University of Richmond

    Joe Hoyle is an Associate Professor of Accounting at the Robins School of Business at the University of Richmond. In 2006, he was named by Businessweek as one of 26 favorite undergraduate business professors in the United States. In 2007, he was selected as the Virginia Professor of the Year by the Carnegie Foundation for the Advancement of Teaching and the Council for the Advancement and Support of Education. In 2009, he was judged to be one of the 100 most influential members of the accounting profession by Accounting Today. In 2015, he was the inaugural recipient of the J. Michael and Mary Anne Cook Prize, recognized for consistently demonstrating the attributes of a superior teacher in the accounting discipline at an undergraduate level. Hoyle earned his BA degree in accounting from Duke University and his MA degree in business and economics, with a minor in education, from Appalachian State University. Hoyle also has three decades of experience operating his own CPA (Certified Public Accountant) Exam review programs. In 2008, he created CPA Review for Free (http://www.CPAreviewforFREE.com), which provides thousands of free questions to help accountants around the world prepare for the CPA Exam.

    Additions & Errata

    Fall 2021

    • Table 8.3 footnote ** now refers to Table 8.8 rather than Table 8.7
    • Table 8.7 number shown for 10% and 7 periods is now 0.5132 rather than 0.5645
    • Table 8.8:  The number for 15% and period 4 is now 2.8550 rather than 2.2832
    • Table 8.8: The number for 18% and period 18 is now 5.2732 rather than 5.2223
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