, A MANAGERIAL EMPHASIS
Sixteenth Edition
Global Edition
Srikant M. Datar
Harvard University
Madhav V. Rajan
Stanford University
Harlow, England • London • New York • Boston • San Francisco • Toronto • Sydney • Dubai • Singapore • Hong
Kong Tokyo • Seoul • Taipei • New Delhi • Cape Town • Sao Paulo • Mexico City • Madrid • Amsterdam • Munich
• Paris • Milan
,Vice President, Business Publishing: Donna Battista Content Producer, Global Edition: Nitin Shankar
Director of Portfolio Management: Adrienne D’Ambrosio Senior Manufacturing Controller, Global Edition: Trudy
Senior Portfolio Manager: Ellen Geary Kimber
Senior Acquisitions Editor, Global Edition: Sandhya Operations Specialist: Carol Melville
Ghoshal Creative Director: Blair Brown
Associate Project Editor, Global Edition: Paromita Banerjee Manager, Learning Tools: Brian Surette
Assistant Project Editor, Global Edition: Arka Basu Content Developer, Learning Tools: Sarah Peterson
Content Producer: Christine Donovan Managing Producer, Digital Studio, Arts and Business:
Vice President, Product Marketing: Roxanne McCarley Diane Lombardo
Director of Strategic Marketing: Brad Parkins Digital Studio Producer: Regina DaSilva
Strategic Marketing Manager: Deborah Strickland Digital Studio Producer: Alana Coles
Product Marketer: Tricia Murphy Digital Content Team Lead: Noel Lotz
Field Marketing Manager: Natalie Wagner Digital Content Project Lead: Martha LaChance
Field Marketing Assistant: Kristen Compton Media Production Manager, Global Edition: Vikram Kumar
Product Marketing Assistant: Jessica Quazza Full-Service Project Management and Composition:
Vice President, Production and Digital Studio, Arts and Integra Software Services
Business: Etain O’Dea Interior Design: Integra Software Services
Director of Production, Business: Jeff Holcomb Cover Art: weerapat wattanapichayakul/123RF®
Managing Producer, Business: Ashley Santora
Microsoft and/or its respective suppliers make no representations about the suitability of the information contained in the
documents and related graphics published as part of the services for any purpose. All such documents and related
graphics are provided “as is” without warranty of any kind. Microsoft and/or its respective suppliers hereby disclaim all
warranties and conditions with regard to this information, including all warranties and conditions of merchantability,
whether express, implied or statutory, fitness for a particular purpose, title and non-infringement. In no event shall
Microsoft and/or its re- spective suppliers be liable for any special, indirect or consequential damages or any damages
whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious
action, arising out of or in connection with the use or performance of information available from the services.
The documents and related graphics contained herein could include technical inaccuracies or typographical errors.
Changes are periodically added to the information herein. Microsoft and/or its respective suppliers may make
improvements and/
or changes in the product(s) and/or the program(s) described herein at any time. Partial screen shots may be viewed in full
within the software version specified.
Microsoft® and Windows® are registered trademarks of the Microsoft Corporation in the U.S.A. and other countries. This
book is not sponsored or endorsed by or affiliated with the Microsoft Corporation.
Acknowledgments of third-party content appear on the appropriate page within the text.
Pearson Education Limited
Edinburgh Gate
Harlow
Essex CM20 2JE
England
and Associated Companies throughout the world
Visit us on the World Wide Web at:
www.pearsonglobaleditions.com
© Pearson Education Limited 2018
The rights of Srikant M. Datar and Madhav V. Rajan to be identified as the authors of this work have been asserted by
them in accordance with the Copyright, Designs and Patents Act 1988.
Authorized adaptation from the United States edition, entitled Horngren’s Cost Accounting: A Managerial Emphasis,
16th Edition, ISBN 978-0-13-447558-5 by Srikant M. Datar and Madhav V. Rajan, published by Pearson Education © 2018.
All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any
form or by any means, electronic, mechanical, photocopying, recording or otherwise, without either the prior written
permission of the publisher or a license permitting restricted copying in the United Kingdom issued by the Copyright
Licensing Agency Ltd, Saffron House, 6–10 Kirby Street, London EC1N 8TS.
All trademarks used herein are the property of their respective owners. The use of any trademark in this text does not vest
in the author or publisher any trademark ownership rights in such trademarks, nor does the use of such trademarks
imply any affiliation with or endorsement of this book by such owners.
ISBN 10: 1-292-21154-7
ISBN 13: 978-1-292-21154-1
British Library Cataloguing-in-Publication Data
A catalogue record for this book is available from the British
Library 10 9 8 7 6 5 4 3 2 1
Typeset in Sabon MT Pro by Integra-PDY IN
Printed and bound by L.E.G.O. in Italy
, 1 The Manager and Management Accounting 21
2 An Introduction to Cost Terms and Purposes 48
3 Cost–Volume–Profit Analysis 86
4 Job Costing 127
5 Activity-Based Costing and Activity-Based Management 172
6 Master Budget and Responsibility Accounting 217
7 Flexible Budgets, Direct-Cost Variances, and Management Control 269
8 Flexible Budgets, Overhead Cost Variances, and Management Control 308
9 Inventory Costing and Capacity Analysis 349
10 Determining How Costs Behave 392
11 Decision Making and Relevant Information 446
12 Strategy, Balanced Scorecard, and Strategic Profitability Analysis 497
13 Pricing Decisions and Cost Management 544
14 Cost Allocation, Customer-Profitability Analysis, and Sales-Variance
Analysis 579
15 Allocation of Support-Department Costs, Common Costs, and Revenues 621
16 Cost Allocation: Joint Products and Byproducts 663
17 Process Costing 695
18 Spoilage, Rework, and Scrap 738
19 Balanced Scorecard: Quality and Time 768
20 Inventory Management, Just-in-Time, and Simplified Costing Methods 798
21 Capital Budgeting and Cost Analysis 838
22 Management Control Systems, Transfer Pricing, and Multinational
Considerations 876
23 Performance Measurement, Compensation, and Multinational
Considerations 911
Sixteenth Edition
Global Edition
Srikant M. Datar
Harvard University
Madhav V. Rajan
Stanford University
Harlow, England • London • New York • Boston • San Francisco • Toronto • Sydney • Dubai • Singapore • Hong
Kong Tokyo • Seoul • Taipei • New Delhi • Cape Town • Sao Paulo • Mexico City • Madrid • Amsterdam • Munich
• Paris • Milan
,Vice President, Business Publishing: Donna Battista Content Producer, Global Edition: Nitin Shankar
Director of Portfolio Management: Adrienne D’Ambrosio Senior Manufacturing Controller, Global Edition: Trudy
Senior Portfolio Manager: Ellen Geary Kimber
Senior Acquisitions Editor, Global Edition: Sandhya Operations Specialist: Carol Melville
Ghoshal Creative Director: Blair Brown
Associate Project Editor, Global Edition: Paromita Banerjee Manager, Learning Tools: Brian Surette
Assistant Project Editor, Global Edition: Arka Basu Content Developer, Learning Tools: Sarah Peterson
Content Producer: Christine Donovan Managing Producer, Digital Studio, Arts and Business:
Vice President, Product Marketing: Roxanne McCarley Diane Lombardo
Director of Strategic Marketing: Brad Parkins Digital Studio Producer: Regina DaSilva
Strategic Marketing Manager: Deborah Strickland Digital Studio Producer: Alana Coles
Product Marketer: Tricia Murphy Digital Content Team Lead: Noel Lotz
Field Marketing Manager: Natalie Wagner Digital Content Project Lead: Martha LaChance
Field Marketing Assistant: Kristen Compton Media Production Manager, Global Edition: Vikram Kumar
Product Marketing Assistant: Jessica Quazza Full-Service Project Management and Composition:
Vice President, Production and Digital Studio, Arts and Integra Software Services
Business: Etain O’Dea Interior Design: Integra Software Services
Director of Production, Business: Jeff Holcomb Cover Art: weerapat wattanapichayakul/123RF®
Managing Producer, Business: Ashley Santora
Microsoft and/or its respective suppliers make no representations about the suitability of the information contained in the
documents and related graphics published as part of the services for any purpose. All such documents and related
graphics are provided “as is” without warranty of any kind. Microsoft and/or its respective suppliers hereby disclaim all
warranties and conditions with regard to this information, including all warranties and conditions of merchantability,
whether express, implied or statutory, fitness for a particular purpose, title and non-infringement. In no event shall
Microsoft and/or its re- spective suppliers be liable for any special, indirect or consequential damages or any damages
whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious
action, arising out of or in connection with the use or performance of information available from the services.
The documents and related graphics contained herein could include technical inaccuracies or typographical errors.
Changes are periodically added to the information herein. Microsoft and/or its respective suppliers may make
improvements and/
or changes in the product(s) and/or the program(s) described herein at any time. Partial screen shots may be viewed in full
within the software version specified.
Microsoft® and Windows® are registered trademarks of the Microsoft Corporation in the U.S.A. and other countries. This
book is not sponsored or endorsed by or affiliated with the Microsoft Corporation.
Acknowledgments of third-party content appear on the appropriate page within the text.
Pearson Education Limited
Edinburgh Gate
Harlow
Essex CM20 2JE
England
and Associated Companies throughout the world
Visit us on the World Wide Web at:
www.pearsonglobaleditions.com
© Pearson Education Limited 2018
The rights of Srikant M. Datar and Madhav V. Rajan to be identified as the authors of this work have been asserted by
them in accordance with the Copyright, Designs and Patents Act 1988.
Authorized adaptation from the United States edition, entitled Horngren’s Cost Accounting: A Managerial Emphasis,
16th Edition, ISBN 978-0-13-447558-5 by Srikant M. Datar and Madhav V. Rajan, published by Pearson Education © 2018.
All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any
form or by any means, electronic, mechanical, photocopying, recording or otherwise, without either the prior written
permission of the publisher or a license permitting restricted copying in the United Kingdom issued by the Copyright
Licensing Agency Ltd, Saffron House, 6–10 Kirby Street, London EC1N 8TS.
All trademarks used herein are the property of their respective owners. The use of any trademark in this text does not vest
in the author or publisher any trademark ownership rights in such trademarks, nor does the use of such trademarks
imply any affiliation with or endorsement of this book by such owners.
ISBN 10: 1-292-21154-7
ISBN 13: 978-1-292-21154-1
British Library Cataloguing-in-Publication Data
A catalogue record for this book is available from the British
Library 10 9 8 7 6 5 4 3 2 1
Typeset in Sabon MT Pro by Integra-PDY IN
Printed and bound by L.E.G.O. in Italy
, 1 The Manager and Management Accounting 21
2 An Introduction to Cost Terms and Purposes 48
3 Cost–Volume–Profit Analysis 86
4 Job Costing 127
5 Activity-Based Costing and Activity-Based Management 172
6 Master Budget and Responsibility Accounting 217
7 Flexible Budgets, Direct-Cost Variances, and Management Control 269
8 Flexible Budgets, Overhead Cost Variances, and Management Control 308
9 Inventory Costing and Capacity Analysis 349
10 Determining How Costs Behave 392
11 Decision Making and Relevant Information 446
12 Strategy, Balanced Scorecard, and Strategic Profitability Analysis 497
13 Pricing Decisions and Cost Management 544
14 Cost Allocation, Customer-Profitability Analysis, and Sales-Variance
Analysis 579
15 Allocation of Support-Department Costs, Common Costs, and Revenues 621
16 Cost Allocation: Joint Products and Byproducts 663
17 Process Costing 695
18 Spoilage, Rework, and Scrap 738
19 Balanced Scorecard: Quality and Time 768
20 Inventory Management, Just-in-Time, and Simplified Costing Methods 798
21 Capital Budgeting and Cost Analysis 838
22 Management Control Systems, Transfer Pricing, and Multinational
Considerations 876
23 Performance Measurement, Compensation, and Multinational
Considerations 911
