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Cases in Managerial and Cost Accounting
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Cases in Managerial and Cost Accounting

First edition
April 2009 | 224 pages | Cambridge Business Publishers
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Formerly published by Cambridge Business Publishers, now published by Sage 
 
Cases in Managerial and Cost Accounting strengthens the managerial relevance of cost and management accounting by placing accounting information squarely in the context of real business decisions. Rather than emphasizing accounting mechanics alone, the casebook challenges students to ask the right questions, analyze information critically, and develop well-reasoned recommendations. 

Designed for undergraduate, graduate, and executive education courses, the cases demonstrate how internal financial information can be used to evaluate performance, protect assets, plan operations, and support strategy. Each case immerses students in realistic business situations where costs, cost behavior, planning, and performance measurement play a central role in managerial decision-making. Organized to support discussion-based teaching, the book encourages students to move beyond calculation and toward interpretation, judgment, and strategic thinking—without sacrificing essential accounting concepts.

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UNDERSTANDING COSTS AND COST BEHAVIORS (pg. 2)
Blackheath Manufacturing Company: Cost behaviors and relevant costs in a pricing decision (pg. 5)

 
Giberson’s Glass Studio: Cost behaviors and relevant costs in a product mix decision with constrained resources (pg. 9)

 
The Horizon Insurance Agency: Relevant costs and cash flows in an outsourcing decision (pg. 16)

 
FinePrint Company: Cost behaviors and relevant costs in a special order decision and an outsourcing decision (pg. 2)

 
Breeden Security, Inc. (A): Budgeting scenarios and break-even analysis (pg. 20)

 
BW Manufacturing Company: Product planning using contribution margin analysis (pg. 23)

 
Greenlawn Commercial Package Business: Relevant costs and sunk costs in decision making in a services environment (pg. 28)

 
The Craddock Cup: Cost behaviors; sunk costs; break-even analysis; overhead allocation (pg. 31)

 
 
Part II: FUNDAMENTALS OF PRODUCT AND SERVICE COSTING
Shun Electronics Company: Overhead allocation in product costing and uncovering cross-product subsidies (pg. 38)

 
Breeden Security, Inc. (B): Evolution of costing systems from traditional cost systems to activity-based cost systems; customer profitability analysis (pg. 45)

 
Johnson Beverage, Inc.: Using activity-based costing to assess customer profitability (pg. 57)

 
Finnegan’s Gardens: Costing services: allocation of common costs and line of business profitability (pg. 64)

 
Gibson Insurance Company: Allocating shared infrastructure costs for determining business unit costs and product costs (pg. 70)

 
Data Services at Armistead: Costing services using activity thinking and strategic choices; customer profitability analysis (pg. 80)

 
Wendy’s Chili: A Costing Conundrum: Joint costs and costing by-products: costing the chili (pg. 91)

 
 
Part III: PLANNING, BUDGETING, AND VARIANCE ANALYSIS (pg. 102)
Blackheath Manufacturing Company —Revisited: Budgeting and profit variance analysis (pg. 102)

 
Toddler Treasures, Inc.: Basic variance analysis of direct materials, direct labor, and overhead (pg. 109)

 
Charley’s Family Steak House (A): Developing a profit plan (pg. 112)

 
Charley’s Family Steak House (B): Flexible budgeting and strategic profitability analysis (pg. 119)

 
EntertainmentNow.com: Flexible budgeting and strategic profitability analysis (pg. 126)

 
Oriole Furniture, Inc. (A): Profit planning and control (pg. 130)

 
Consumer Service Company (A): Negotiating a profit plan and ethics of budgeting (pg. 135)

 
 
Part IV: PERFORMANCE MEASUREMENT AND INCENTIVE SYSTEMS (pg. 140)
Performance Measurement at Thomas J. Lipton: Measuring product-line performance: ROI vs. Residual Income (Economic Profit) (pg. 140)

 
Maverick Lodging: The Balanced Scorecard system in a hotel management company (pg. 152)

 
The Gail Palmer Ashton Graduate School of Business: The Balanced Scorecard Initiative Developing performance metrics in a university setting (pg. 170)

 
Lynchburg Foundry: The Ductile Dilemma: Transfer pricing and costing a by-product (pg. 175)

 
Xyberspace Consulting, Inc.: Transfer pricing: allocation of shared services costs (pg. 186)

 
Mountain Lumber Company: Linking performance measures to strategy: evaluating a performance measurement and incentive plan (pg. 194)

 
Key features
NEW TO THIS EDITION:
  • Refined case selection to emphasize managerial relevance and contemporary business issues.
  • Improved case organization to support discussion-driven and decision-focused instruction.
  • Continued expansion of cases illustrating strategic, operational, and performance-measurement decisions.
  • Enhanced balance between accounting content and management application.
KEY FEATURES:
  • Decision-Focused Casebook: Emphasizes how managers use cost and management accounting information in real decisions.
  • Discussion-Driven Design: Cases encourage students to develop their own questions and analytical paths.
  • Four-Part Structure: Organized around understanding costs, costing systems, planning and budgeting, and performance measurement.
  • Cost Behavior and Relevance: Cases illustrate relevant costs, opportunity costs, sunk costs, and cost-volume-profit analysis.
  • Product and Service Costing: Includes cases on overhead allocation, activity-based costing, joint costs, and customer profitability.
  • Planning and Control: Addresses budgeting, flexible budgets, variance analysis, and strategic profitability analysis.
  • Performance Measurement and Incentives: Explores ROI, residual income, balanced scorecards, transfer pricing, and incentive systems.
  • Strategic Context: Demonstrates how accounting information supports both operating and long-term strategic decisions.
  • Managerial Emphasis: Strengthens the management dimension of managerial and cost accounting courses.
  • Scalable Across Levels: Suitable for undergraduate, graduate, and executive education settings.