New Features:

All the chapters have been improved and updated in various ways in this edition. The following table summarizes the most significant of these changes:

Chapter Major Content Changes in This Edition

Chapter 1 — Readable presentation of the forces of change in managerial accounting is provided.

Chapter 2 — Exhibits have been redesigned to enhance readability. More emphasis is now placed on service companies. A brief discussion of strategic planning was added along with a major case.

Chapter 3 — The schedule of cost of goods manufactured has been simplified to make it easier to understand and to construct. Under- or overapplied overhead is allocated among ending inventories and Cost of Goods Sold on the basis of the amount of overhead applied during the period and in terms of the ending balances of the accounts. A new appendix covers the controversy over the choice of the level of activity in the denominator of the predetermined overhead rate.

Chapter 5 — This was Chapter 6 in the fourth edition and has been revised and updated.

Chapter 6 — This was Chapter 7 in the fourth edition and has been revised and updated.

Chapter 7 — This was Chapter 8 in the fourth edition and has been revised and updated.

Chapter 8 — This new chapter covers activity-based costing. The ABC material in the text has been completely rewritten to emphasize decision making in both service and manufacturing companies. Spreadsheet templates are presented to illustrate computations. Cost flows are presented in an appendix. A major case was added.

Chapter 9 — Technical and behavioural materials were retained with extensions included on business intelligence and modern management changes in budgeting practices. Spreadsheet illustrations are incorporated. Strategic planning, business plans and activity budgeting have been integrated with the traditional material.

Chapter 10 — The balanced scorecard has been added to the chapter and integrated with the material on operating performance measures.

Chapter 11 — Much greater emphasis has been given to the control of overhead costs in service companies.

Chapter 12 — The chapter has been reorganized. The discussion of decentralization now comes first, followed by the segment margin. Life cycle and activity costing have been integrated into the discussion along with customer analysis and activity analysis. RI and EVA have received extended discussion. The transfer pricing appendix has been completely rewritten with a new approach based on the economics of negotiated transfer prices.

Chapter 13 — Included is a discussion of the managing of constraints while de-emphasizing the technical aspects of linear programming.

Chapter 14 — The preference ranking material that was previously in Chapter 15 has been brought forward to Chapter 14.

Chapter 17 — Trend analysis now includes time-series plots of data. Benchmarking and extended references are included along with a discussion of productivity.

Pricing Appendix — A new section stresses the role of the price elasticity of demand in setting prices. The contribution approach to cost-plus pricing has been dropped. The drawbacks of using the absorption costing approach to cost-plus pricing are given more coverage.

Quality Appendix — This cost of quality material has been extracted and presented here to streamline other chapters.

Retained Features:

"Focus on Current Practice" boxes contain glimpses of how actual companies use or are affected by concepts discussed in the chapter. Each chapter has a number of boxes, helping a student understand the uses of managerial accounting in actual business practice.

Vignettes known as "Managerial Accounting in Action," involve businesspeople in lifelike settings. They are frequently used to introduce core concepts and stimulate interest. They are essential to, and an integral part of, reading and understanding the text. Real products and services that students can relate to are used as much as possible.

International aspects of management have become increasingly important in recent years due to the emergence of regional and global markets. Discussion and examples that have an international dimension are identified by the icon shown in the margin.

The integration of Microsoft® Excel spreadsheet screen captures help students recognize the importance of spreadsheets as an ABC and budgeting tool.

More than 100 exercises, problems, and cases requiring written solutions (identified by the logo shown in the margin) improve students' written communication skills and address educational concerns.

Ethical issues are included both in assignment material and in the text (and identified by the icon shown in the margin). End-of-chapter assignments allow students an opportunity to consider ethical issues in making managerial decisions.

Clear presentation is always important, and the fifth edition does not ignore function for the sake of aesthetics. A contemporary design offers new real-world chapter openers, redesigned logos in the margins, as well as other engaging features — like boxed material that is integrated within the text and colour-coded chapter openers that reflect the division of chapters into parts. Discussions and examples ranging from ethics to the real world are identified in the margin of the text by appropriate icons.