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vi Contents
CHAPTER 3 Costing Systems: Process Costing 85
BUSINESS INSIGHT DEAN FOODS 85 Accounting for Costs 94

Concepts Underlying the Process Costing Assigning Costs 94
System 86 Process Costing for Two or More Production
Patterns of Product Flows and Cost Flow Departments 96
Methods 87 Preparing a Process Cost Report Using the
Cost Flows Through the Work in Process Inventory Average Costing Method 98
Accounts 88 Accounting for Units 98
Computing Equivalent Production 88 Accounting for Costs 99
Equivalent Production for Direct Materials 89 Assigning Costs 100
Equivalent Production for Conversion Costs 90 The Management Process and the Process
Summary of Equivalent Production 90 Costing System 103
Preparing a Process Cost Report Using the TriLevel Problem 104
FIFO Costing Method 91 Chapter Review 107
Accounting for Units 93 Chapter Assignments 109
CHAPTER 4 Value-Based Systems: Activity-Based Costing and Lean Accounting 123

BUSINESS INSIGHT LA-Z-BOY, INC. 123 Continuous Improvement of the Work
Concepts Underlying Value-Based Environment 133
Systems 124 Accounting for Product Costs in a JIT Operating
Value Chain Analysis 124 Environment 133
Supply Chains 124 Backflush Costing 134
Using Information from Value Chains and Supply Cost Flows in Traditional and Backflush
Chains 125 Costing 135
Process Value Analysis 125 Management Tools for Continuous
Value-Adding and Non-Value-Adding Activities Improvement 138
125 Total Quality Management 138
Activity-Based Management 127 Theory of Constraints 138
Activity-Based Costing 127 Comparison of ABM and Lean Operations 138
The Cost Hierarchy and the Bill of Activities 127 TriLevel Problem 141
The New Operating Environment and Lean Chapter Review 144

Operations 131 Chapter Assignments 145
Just-in-Time (JIT) 131
CHAPTER 5 Cost-Volume-Profit Analysis 163
BUSINESS INSIGHT FLICKR 163 The Scatter Diagram Method 169

Concepts Underlying Cost Behavior 164 The High-Low Method 170
Cost Behavior 164 Statistical Methods 171
Mixed Costs and the Contribution Margin The Engineering Method 171
Income Statement 169 Contribution Margin Income Statements 171
Copyright 2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part.
Contents vii
Cost-Volume-Profit Analysis 173 Assumptions Underlying CVP Analysis 178

Breakeven Analysis 173 Applying CVP to Target Profits 178
Using an Equation to Determine the Breakeven TriLevel Problem 182
Point 174 Chapter Review 184
The Breakeven Point for Multiple Products 175 Chapter Assignments 186
Using CVP Analysis to Plan Future Sales,
Costs, and Profits 178
CHAPTER 6 The Budgeting Process 199
BUSINESS INSIGHT FRAMERICA CORPORATION 199 The Cost of Goods Manufactured Budget 210
Concepts Underlying the Budgeting Financial Budgets 212
Process 200 The Budgeted Income Statement 212
The Master Budget 200 The Capital Expenditures Budget 213
Preparation of a Master Budget 202 The Cash Budget 213
Budget Procedures 204 The Budgeted Balance Sheet 216
Operating Budgets 204 Budgeting and the Management Process 218
The Sales Budget 204 Advantages of Budgeting 218
The Production Budget 205 Budgeting and Goals 218
The Direct Materials Purchases Budget 206 Budgeting Basics 219
The Direct Labor Budget 208 TriLevel Problem 221
The Overhead Budget 208 Chapter Review 223
The Selling and Administrative Expenses Chapter Assignments 225
Budget 209
CHAPTER 7 Flexible Budgets and Performance Analysis 247
BUSINESS INSIGHT VAIL RESORTS 247 Residual Income 258

Concepts Underlying Performance Economic Value Added 259
Analysis 248 Performance Measurement 260
What to Measure, How to Measure 248 Organizational Goals and the Balanced
Types of Responsibility Centers 249 Scorecard 260
Organizational Structure and Performance Performance Evaluation and the Management
Reports 251 Process 263
Performance Evaluation of Cost Centers and Performance Incentives and Goals 264
Profit Centers 253 Linking Goals, Performance Objectives, Measures,
Flexible Budgets and Performance Analysis 253 and Performance Targets 264
Evaluating Cost Center Performance Using Performance-Based Pay 264
Flexible Budgeting 254 The Coordination of Goals 264
Evaluating Profit Center Performance Using TriLevel Problem 266
Variable Costing 254
Chapter Review 269
Performance Evaluation of Investment Chapter Assignments 271
Centers 256
Return on Investment 256
viii Contents
CHAPTER 8 Standard Costing and Variance Analysis 289
BUSINESS INSIGHT IROBOT CORPORATION 289 Business Application 298

Concepts Underlying Standard Costing 290 Computing and Analyzing Direct Labor
Variance Analysis 291 Variances 299
Computing Standard Costs 291 Computing Total Direct Labor Cost Variance 299
Standard Direct Materials Cost 291 Business Application 301
Standard Direct Labor Cost 292 Computing and Analyzing Overhead
Standard Overhead Cost 292 Variances 302
Total Standard Unit Cost 293 Computing Total Overhead Cost Variance 302
The Role of Flexible Budgets in Variance Business Application 307
Analysis 293 Using Cost Variances to Evaluate Managers’
Using Variance Analysis to Control Costs 295 Performance 309
Computing and Analyzing Direct Materials TriLevel Problem 311
Variances 296 Chapter Review 317
Computing Total Direct Materials Cost Variance 296 Chapter Assignments 318
CHAPTER 9 Short-Run Decision Analysis 331
BUSINESS INSIGHT BANK OF AMERICA 331 Segment Profitability Analysis 338

Concepts Underlying Decision Analysis 332 Incremental Analysis for Sales Mix
Concepts Underlying Incremental Analysis 332 Decisions 340
Incremental Analysis for Outsourcing Sales Mix Analysis 341
Decisions 335 Incremental Analysis for Sell-or-Process-
Outsourcing Analysis 335 Further Decisions 343
Incremental Analysis for Special Order Sell-or-Process Further Analysis 343
Decisions 336 The Management Process 345
Special Order Analysis: Price and Relevant Cost TriLevel Problem 346
Comparison 337 Chapter Review 348
Special Order Analysis: Minimum Bid Price for Chapter Assignments 350
Special Order 338
Incremental Analysis for Segment
Profitability Decisions 338
CHAPTER 10 Capital Investment Analysis 365
BUSINESS INSIGHT AIR PRODUCTS AND CHEMICALS, Disposal or Residual Values 370
INC. 365
The Net Present Value Method 371
Concepts Underlying Long-Term Decision Advantages of the Net Present Value Method 371
Analysis 366
The Net Present Value Method Illustrated 371
Capital Investment Analysis 366
Other Methods of Capital Investment
The Minimum Rate of Return on Investment 367
Analysis 373
Capital Investment Analysis Measures and The Payback Period Method 373
Methods 369
The Accounting Rate-of-Return Method 374
Expected Benefits from a Capital Investment 369
The Management Process 377
Equal Versus Unequal Cash Flows 369
TriLevel Problem 378
Carrying Value of Assets 369
Chapter Review 380
Depreciation Expense and Income Taxes 369
Chapter Assignments 381
Contents ix
CHAPTER 11 Pricing Decisions, Including Target Costing and Transfer Pricing 393
BUSINESS INSIGHT LAB 126 393 Pricing Based on Target Costing 404
Concepts Underlying Pricing Decisions 394 Differences Between Cost-Based Pricing and Target
Revenue Recognition and Pricing Policies 394 Costing 405
Pricing Policy Objectives 394 Target Costing Analysis in an Activity-Based
Management Environment 406
External and Internal Pricing Factors 395
Pricing for Internal Providers of Goods and
Economic Pricing Concepts 396
Services 407
Total Revenue and Total Cost Curves 396
Transfer Pricing 408
Marginal Revenue and Marginal Cost Curves 397
Developing a Transfer Price 409
Auction-Based Pricing 398
Other Transfer Price Issues 410
Cost-Based Pricing Methods 399
Using Transfer Prices to Measure Performance 410
Gross Margin Pricing 399
Pricing and the Management Process 412
Return on Assets Pricing 400
TriLevel Problem 413
Summary of Cost-Based Pricing Methods 401
Chapter Review 416
Pricing Services 402
Factors Affecting Cost-Based Pricing Methods 403
CHAPTER 12 Quality Management and Measurement 435
BUSINESS INSIGHT FACEBOOK 435 Measuring Quality: An Illustration 445

Concepts Underlying Quality 436 Evaluating the Costs of Quality 445
Recognition of Quality 437 Evaluating Nonfinancial Measures of Quality 447
Deming Prizes 437 The Role of Management Information
EFQM Excellence Award 437 Systems in Quality Management 449
Malcolm Baldrige National Quality Award 438 Enterprise Resource Planning Systems and Software
as a Service 449
ISO Standards 438
Managers’ Use of MIS 449
Financial and Nonfinancial Measures of
Quality 440 TriLevel Problem 451
Financial Measures of Quality 440 Chapter Review 453

Nonfinancial Measures of Quality 442 Chapter Assignments 454
Measuring Service Quality 445
CHAPTER 13 The Statement of Cash Flows 469
BUSINESS INSIGHT AMAZON.COM, INC. 470 Depreciation, Amortization, and Depletion 478
Concepts Underlying the Statement of Cash Gains and Losses 479
Flows 471 Changes in Current Assets 479
Relevance of the Statement of Cash Flows 471 Changes in Current Liabilities 480
Classification of Cash Flows 472 Schedule of Cash Flows from Operating Activities
Required Disclosure of Noncash Investing and 482
Financing Transactions 474 Step 2: Determining Cash Flows from
Alternate Presentations of Operating Activities 474 Investing Activities 483
Step 1: Determining Cash Flows from Investments 484
Operating Activities 476 Plant Assets 484
x Contents
Step 3: Determining Cash Flows from Cash Flow Ratios 491

Financing Activities 487 Free Cash Flow 493
Bonds Payable 487 Asking the Right Questions About the Statement
Common Stock 487 of Cash Flows 494
Retained Earnings 488 Ethical Considerations in Analyzing the Statement
Treasury Stock 488 of Cash Flows 495
A Look Back At: Amazon.com, Inc. 496
Step 4: Preparing the Statement of Cash
Flows 489 Review Problem 497
Cash Flows and the Financial Statements 490 Chapter Review 500
Analyzing Cash Flows 491
SUPPLEMENT TO CHAPTER 13 The Direct Method of Preparing the Statement of

Cash Flows 519
Determining Cash Flows from Operating Cash Payments for Operating Expenses 521
Activities 519 Cash Payments for Interest 522
Cash Receipts from Sales 520 Cash Payments for Income Taxes 522
Cash Receipts from Interest and Dividends 520 Compiling the Statement of Cash Flows 522
Cash Payments for Purchases 520 Assignments 524
CHAPTER 14 Financial Statement Analysis 528

BUSINESS INSIGHT STARBUCKS CORPORATION 529 Evaluating Operating Asset Management 547
Concepts Underlying Financial Performance Supplemental Financial Ratios for Assessing
Measurement 530 Operating Asset Management and Liquidity 549
Standards of Comparison 531 Evaluating Market Strength with Financial
Sources of Information 532 Ratios 550
Tools and Techniques of Financial Analysis 534 Financial Statement Analysis and
Performance Assessment 551
Horizontal Analysis 534
Evaluating Quality of Earnings 553
Trend Analysis 536
Accounting Methods 553
Vertical Analysis 537
Accounting Estimates 554
Financial Ratio Analysis 540
One-Time Items 555
Comprehensive Illustration of Financial
Ratio Analysis 540 Management Compensation 557
A Look Back At: Starbucks Corporation 558
Evaluating Profitability and Total Asset
Management 541 Review Problem 559
Evaluating Liquidity 543 Chapter Review 563
Evaluating Financial Risk 545 Chapter Assignments 564
Appendix A The Time Value of Money 585
Endnotes 593
Glossary 595
Company Name Index 607
Subject Index 608
Latest Research on Student Learning
We talked to over 150 instructors and discovered that current

textbooks did not effectively:
• Help students logically process information
• Build on what students already know in a carefully guided sequence
• Reinforce core accounting concepts throughout the chapters
• Help students see how the pieces of accounting fit together
Crosson/Needles addresses these challenges by creating a better solution for you.

This includes new features and a brand new structure for enhanced learning.
We have worked hard to create a textbook

that mirrors the way you learn!
© Martin Marraud/Getty Images
A Logical Methodology to Building Knowledge:
THE Three Section Approach
Crosson/Needles continuously evolves to meet the needs of today’s learner.

As a result of our research, the chapters have been organized into a Three
Section Approach, which helps students more easily digest the content.
1 The first section is Concepts and focuses on the overarching accounting con-
cepts that require consistent reiteration throughout the course.
2 With a clear understanding of the concepts, you can proceed to the second
section, Accounting Applications. Here, you can practice the application of
accounting procedures with features like “Apply It!”.
3 Finally, move to section three, Business Applications. This section illustrates how the
concepts and procedures are used to make business decisions. Real company exam-
ples are used throughout the chapter to show the relevance of accounting.
“I think this new chapter structure would be much easier for students to read
and comprehend.”
Shannon Ogden
Black River Technical College
T riLevel Problems within CengageNOW mirror the Three Section Approach and con-
nect the sections—Concepts, Accounting Applications, and Business Applications. In
this way, the problems teach you to think holistically about an accounting issue.
xii Preface
Preface xiii
Breaking Down the Three Section Approach

SECTION 1: CONCEPTS
In Section 1, students experience the Concepts related to each chapter. In this case, concepts are the overarching accounting
concepts that need to be reinforced throughout the accounting course, such as measurement, recognition, the matching rule,
and classification.
Every chapter’s Section 1 reinforces these key concepts so that once students understand the concepts, they can apply them to
every aspect of the management process—from planning to performing to evaluating to communicating information about a
business. This is a clear and logical way to present accounting.
908 Chapter 20: The Budgeting Process
seCtion 1 ConCePTs
ConCepts
■■ Comparability
■■ Understandability
Concepts Underlying the
Budgeting Process
Relevant Budgeting is the process of identifying, gathering, summarizing, and communicating
leaRning objeCtive financial and nonfinancial information about an organization’s future activities. The
budgeting process provides managers of all types of organizations the opportunity to
Define budgeting and
match their organizational goals with the resources necessary to accomplish those goals.
describe how it
Budgeting empowers all in the organization to understand organizational goals in terms
relates to the concepts of
of their responsibilities and be held accountable for budget plans and results since they
comparability and
can be compared. Budgeting is synonymous with managing an organization. Budgets
understandability.
are plans of action based on forecasted transactions, activities, and events.
The concepts of understandability and comparability underlie the power of budget-
ing. Budgeting enhances understandability, since managers and employees will under-
stand their organizational roles and responsibilities based on how the budget links the
organization’s strategic plans to its annual plans. Because the budget expresses these
plans and objectives in concrete monetary terms, managers and employees are able to
understand and act in ways that will achieve them. Budgeting enhances comparability,
since budget-to-actual comparisons give managers and employees a means of monitor-
ing the results of their actions. As you will see in this chapter, budgeting is not only an
essential part of planning; it also helps managers command, control, evaluate, and report
“It does a very good job in explaining each concept and reinforcing each one by giving specific
on operations.
examples.”
the Master Budget
Paul Jaijairam A master budget consists of a set of operating budgets and a set of financial budgets
Bronx Community College that detail an organization’s financial plans for a specific period, generally a year. When
a master budget covers an entire year, some of the operating and financial budgets may
show planned results by month or by quarter. As the term implies, operating budgets
are plans used in daily operations.
Operating budgets include:
■■ sales budget
■■ production budget
■■ direct materials purchases budget
■■ direct labor budget
■■ overhead budget
■■ selling and administrative expenses budget
Copyright 2013 Cengage Learning. All cost
■■
RightsofReserved.
goods manufactured budget
May not be copied, scanned, or duplicated, in whole or in part.
The sales budget is prepared first because it is used to estimate sales volume and
revenues. Once managers know the quantity of products or services to be sold and how
many sales dollars to expect, they can develop other budgets that will enable them to
xiv Preface
SECTION 2: ACCOUNTING APPLICATIONS

In Section 2, students learn the accounting procedures and the technical application of concepts. Students can apply
the fundamental concepts they have already learned in Section 1. Section 2 includes things like building budgets and
creating schedules and reports.
seCtion 2 ACCoUnTIng APPLICATIons

aCCounting appliCations
■■ Prepare operating
budgets
Preparation of a Master Budget
■■ Sales budget Exhibits 1, 2, and 3 display the elements of a master budget for a manufacturing orga-
■■ Production budget nization, a retail organization, and a service organization, respectively. As these illustra-
■■ Direct materials tions indicate, the process of preparing a master budget is similar in all three types of
purchases budget organizations in that each prepares a set of operating budgets that serve as the basis
■■ Direct labor budget for preparing the financial budgets. The sales budget (or, in service organizations, the
service revenue budget) is prepared first because it is used to estimate sales volume and
■■ Overhead budget
revenues. Once managers know the quantity of products or services to be sold and how
■■ Selling and administra- many sales dollars to expect, they can develop other budgets that will enable them to
tive expenses budget
manage their resources so that they generate profits on those sales.
■■ Cost of goods manufac-
tured budget
■■ Prepare financial budgets Exhibit 1
■■ Budgeted income Preparation of a Master Budget for a Manufacturing Organization
statement
■■ Cash budget Sales Budget
■■ Budgeted balance
sheet
Production
Relevant Budget
leaRning objeCtives
Identify the elements

Operating Direct Materials Direct Labor
of a master budget in Budgets Purchases Budget Budget
Overhead Budget
different types of
organizations and the
guidelines for preparing
budgets. Cost of Goods
Manufactured Budget
Prepare the operating

“Section
budgets2that
walks through the accounting procedures very well. I like the use of a visual plus
support the
Selling and
Cost of Goods
narrative
the to explain the procedures.”
financial budgets. Sold Budget* Administrative
Expenses Budget
Gerald Childs
Prepare a budgeted
Waukesha County Technical College Budgeted Income
income statement, a Statement
cash budget, and a budgeted
balance sheet.
Financial Budgeted
Cash Budget
© Cengage Learning 2014
Budgets Balance Sheet
Capital
Expenditures Budget
Preface xv
SECTION 3: BUSINESS APPLICATIONS

With a solid foundation of the fundamental accounting concepts as well as how to apply these concepts when performing
accounting procedures, students are now ready for Section 3: Business Applications. This section teaches students how
managerial accounting information is used to make business decisions.
seCtion 3 BUsIness APPLICATIons

business
appliCations
■■ Planning
Budgeting and the
■■ Performing Management Process
■■ Evaluating
Budgets are essential to accomplishing an organization’s strategic plan. They are used
■■ Communicating
to communicate understandable information, coordinate activities and resource usage,
motivate employees, and provide comparative information to evaluate performance. For
Relevant example, a board of directors may use budgets to determine managers’ areas of respon-
leaRning objeCtive sibility and to measure managers’ performance in those areas. Budgets are also used to
manage and account for cash.
Explain why
budgeting is essential
to the management process. Advantages of Budgeting
Budgeting is advantageous for organizations, because budgets:
■■ foster organizational communication
■■ ensure a focus both on future events and on resolving day-to-day issues
■■ assign resources and the responsibility to use them wisely to managers who are held
accountable for their results
■■ can identify potential constraints before they become problems
■■ facilitate congruence between organizational and personal goals
■■ define organizational goals and objectives numerically, against which actual perfor-
mance results can be evaluated
Budgeting and goals

Budgeting helps managers achieve both long-term and short-term goals.
long-term goals strategic planning is the process by which management establishes
an organization’s long-term goals. These goals define the direction that an organization
will take and are the basis for making annual operating plans and preparing budgets.
Long-term goals cannot be vague. They must set specific tactical targets and timetables
and assign responsibility to specific personnel. For example, a long-term goal for a com-
pany that currently holds only 4 percent of its product’s market share might specify
that the vice president of marketing is to develop strategies to ensure that the company
controls 10 percent of the market in five years and 15 percent by the end of ten years.
“This is a nice and useful touch to help students tie everything together. The theory can be dry at
times, so this recap
t helps engage the students’ attention again.”
Dennis Mullen
City College of San Francisco
What Can Cause the Planning Process to Fail?
When chief financial officers were asked what caused their planning process to fail, the six factors
they most commonly cited were:1
• An inadequately defined strategy
ja / iStockphoto.com
• No clear link between strategy and the operational budget
• Lack of individual accountability for results
• Lack of meaningful performance measures
• Inadequate pay for performance
optimal price, which is $32.50 per unit.
If all the information used in microeconomic theory were certain, picking the opti-
mal price would be fairly easy. Although an analysis relies on projected amounts for unit
sales, product costs, and revenues, it usually highlights cost patterns and the unantici-
pated influences of demand. For this reason, it is important that managers consider the
microeconomic approach to pricing when setting product prices.
auction-Based pricing
In recent years, as a result of auctions hosted by Internet companies like eBay, yahoo,
and Priceline.com, auction-based pricing has skyrocketed in popularity. Auction-based
pricing occurs in one of two ways:
xvi ■■ Sellers post what they have to sell, ask for price bids, and accept a buyer’s offer to Preface
purchase at a certain price, or
■■ Buyers post what they want, ask for prices, and accept a seller’s offer to sell at a
certain price.
To illustrate the seller’s auction-based price, suppose a corporation like Intel has
an excess of silicon chips after a production run. The company posts a message on the
Internet asking for the quantity of silicon chips that prospective buyers are willing to buy
and the price that they are willing to pay. After the offers are received, the company pre-
pares a demand curve of all offers and selects the one that best fits the quantity of silicon
chips it has available for sale.
To illustrate the buyer’s auction-based price, consider an individual who wants to fly
Examples, Activities, and Practice round-trip to Europe on certain dates and posts his or her needs on one of the Internet’s
auction markets. After receiving the offers to sell round-trip tickets to Europe, the indi-
vidual will accept the offer that best suits his or her needs.
Auction-based pricing will continue to grow in importance as a result of the escalat-
ing amount of business that is being conducted over the Internet by both organizations
and individuals. Just about anything can be bought or sold via the Internet.
Business Perspective
▲
What’s It Worth to Shop Online?
TriLevel Problem Throughout the chapter, Business Perspective
929

© Alija / iStockphoto.com
The Internet makes it possible to price efficiently at the level of marginal costs. For instance, at websites like Priceline.com, travelers pick a destination
features keep students engaged by providing real
and a price they are willing to pay for air or hotel reservations. The price must be guaranteed by credit card. An airline or hotel has a limited amount of
business context and examples from well-known
Randi Quelle is the manager of the electronics department in a large dis-
time to accept or reject the bid. If the bid is accepted, the buyer is obligated to pay for the air or hotel reservation. The hotels and airlines are often will-
count store. During a recent meeting, Quelle and her supervisor agreed
soLUTIon
Budgets and information that might be useful include:
ing to accept the low bid prices because the marginal cost of filling an additional seat on an airplane or an extra room in a hotel is very low.
companies, including Google, CVS, Boeing, Ford
that Quelle’s goal for the next year would be to increase the number of
flat-screen televisions sold by 20 percent. The department sold 500 TV
• Breakdown by month of last year’s sales to use as a guide to build this
year’s monthly targets. This would include seasonal sales information.
sets last year. Two salespersons currently work for Quelle. What types of
Motor Company, Microsoft, L.L. Bean, and The
• Budgets by salesperson, which may indicate a need for a third sales-
budgets should Quelle use to help her achieve her sales goal? What kinds person.
of information should those budgets provide? • Inventory and purchasing information.
ChApter 20
Assume that a product has the total cost and total revenue sOLUTION
Walt Disney Company. •
•
Budgets of sales promotion and advertising.
Information on customer flow and the best times to sell.
Try IT! se9, se10, e12A, e13A, e14A, e15A, e12B, e13B, e14B,
The Budgeting Process

curves pictured in Exhibit 2A. The difference between total 4,000. If the same total profit will be made at both the 4,000- and the 9,000-unit levels, e15B
revenue and total cost is the same at the 4,000- and 9,000- it does not make economic sense to produce the additional 5,000 units.
unit levels. Which of these two levels of activity would you
Try IT! se2, e2A, e2B
chose as goals for total sales over the life of the product?
Business insight TriLevel Problem

Framerica Corporation The beginning of this chapter focused on Framerica Corporation. One of Framerica’s pri-
orities is to help employees attain personal goals. A participatory budgeting process is a
highly effective way to achieve goal congruence between a company’s goals and objec-
Chapter Assignments tives and employee personal aspirations. Complete the following requirements in order to 933
Framerica Corporation is one of the leading manufacturers of pic- leArning oBJeCtiVes answer the questions posed at the beginning of the chapter.
CHE-NEEDLES_FINM-12-0107-025.indd 1106 17/12/12 8:30 PM
ture frames in North America. Because the company believes its work operating Budgets section 1: Concepts 919
force is its most valuable asset, one of its priorities is to help employ- Define budgeting and describe What concepts underlie the usefulness of the budgeting process?
ees attain their personal goals. One highly effective way of achieving Key
how it Terms
relates to the concepts of
Exhibit 10 section 2: Accounting Applications
Jeremy Hoare/Photoshot
congruence between a company’s goals and its employees’ personal comparability and understandability. How does the budgeting process translate long-term goals into operating objectives?
Cost of Goods Framecraft Company
Assume Framerica has an Information Processing Division that provides database
aspirations is through a participatory budgeting process—an ongoing Manufactured Budget
Identify the elements of a master management services Costforof
the professional
goods photographers
Manufactured and artists who buy its frames.
Budget source of
dialogue that involves personnel at all levels of the company in mak- budget
budgetcommittee
in different928 (LO5)
types of cost ofthe
Suppose goods
divisionmanufactured
uses state-of-the-art
For the year endedequipment
Decemberand pro forma
31 employs financial
five information spe-
Data
cialists. Each specialist works an average of 160 hours a month. Assume the division’s con-
ing budgeting decisions. This ongoing dialogue provides both manag- budgetedand
organizations balance
the sheet 924for
guidelines
Framerica (LO4)
Corporation budget
trollerDirect
918the(LO3)
materials
has compiled used:
following information:
statements 909 (LO1)
ers and lower-level employees with insight into the company’s current budgeted income
preparing budgets. directDirect labor budget
materials 916 (LO3)
inventory, production budget 913 (LO3)
Direct materials
Actual Data for Forecasted Data
statement 920 (LO4) beginning purchases
direct materials $ 1,200*sales budget 912 purchases
(LO3) budget
activities and future direction and motivates them to improve their Past year for This year
Prepare the operating
(LO1) budgets that Purchases 45,550 Direct materials
performance, which, in turn, improves the company’s performance.
budgets Business Insight and TriLevel Problems ▲
budgeting
support908
908
the (LO1)
financial budgets.
budget 914 (LO3)
financial
Client
Cost budgets
billings (sales)
november December
908 available
(LO1)
$25,000
of direct materials
$35,000
sales forecast
January February 913 March(LO3)
purchases budget
selling and administrative
$25,000 $20,000 $40,000
Each chapter opens with a Business Insight that shows how a

Selling and administrative
1. ConCept ▶ What concepts underlie the usefulness of the budgeting capital expenditures master
expenses budget 908 (LO1)
for use $46,750 expenses 11,000budget 12,500 917 (LO3)
Prepare a budgeted income 12,000 13,000 12,000
process? budget 921
statement, (LO4)
a cash budget, and a operating
Operating Less budgets
direct
supplies materials908 (LO1) 3,500
inventory,
2,500 static
2,500 budgets2,500 Direct927 (LO5)
materials
4,000
budgeted small company would use accounting information to make deci-

cash budget
balance921 (LO4)
sheet. overhead
Processing
ending
budget 916 (LO3)
overhead 3,200
Cost of direct materials used
3,500
1,500*
strategic
3,000
$ 45,250
planning
2,500
purchases budget
3,500926 (LO5)
2. ACCounting AppliCAtion ▶ How does the budgeting process continuous budget 928 (LO5) participative budgeting 927sales
(LO5) zero-based
month of budgeting 928 (LO5)
translate long-term goals into operating objectives?
sions.
Explain The
why Business
budgeting Insight
is essential poses
cent Overhead
are collected three
in the
costs first monthquestions—each
following sale, and 10 percent ofOverhead
are collected
171,045
which Of theDirect
clientlabor
in the budget
billings, 60 percent are cash
costs collected during the54,300 sale, 30 per-
Direct labor budget
second month following sale. Operating supplies are paid for in the month of purchase.
3. Business AppliCAtion ▶ Why are budgets an essential part of

will be answered in one Selling
to the management process.
of
lowing
the
Total
Work
three
andmanufacturing
administrative
in process
the cost’s
sections
costs
expenses and processing
inventory, beginning
incurrence.
of the
overhead chapter.
$270,595
are paid in the month
—**
Atfol- the
planning, controlling, evaluating, and reporting on business? end of each

Chapter chapter, thepaidTriLevel
Assignments The
Lessdivision
work in Problem
hasprocess
a bank inventory,
loan of $12,000
revisits the Business
with a 12 percent annual interest
ending —** rate. Interest is
monthly, and $2,000 of the loan principal is due on February 28 of next year. Income taxes
Cost of goods manufactured $270,595
Insight company to tie the three
earn $8.50 sections together.
of $4,550 for this calendar year are due and payable on March 15 of next year. The information
specialists an hour, and all payroll-related employee benefit costs are included in * The desired direct materials inventory balance at the beginning of the year is $1,200 (24,000 ounces 3
$0.05 per ounce); at year end, it is $1,500 (30,000 ounces 3 $0.05 per ounce).
** It is the company’s policy to have no units in process at the beginning or end of the year.
DisCussion Questions
LO 1, 2 DQ1. ConCept ▶ What is a master budget and what are the guidelines that enhance its
CHE-NEEDLES_FINM-12-0107-020.indd 929 understandability and comparability? 15/12/12 4:24 PM
LO 3, 4 DQ2. Why does the preparation of operating budgets before financial budgets increase
the usefulness of the budget process?
▲
Apply It! and Try It! Sample Company is preparing

LO 5 a production budget for the
DQ3. Business year. The
AppliCAtion soLUTIon
▶ Why is the difference between a static budget and a
Apply It! activities throughout the chapter
company’s policy is to maintain a finished goods inventory equal to one-
continuous budget important in understanding budgets? January February March
half of the next month’s sales. Sales of 4,000 units are budgeted for April.
Sales in units 3,000 2,400 6,000
Complete the following monthly DQ4. budget
LO 5 production ConCept for the▶
first Business
quarter AppliCAtion ▶ How are understandability and compa-
illustrate and solve a short exercise and then to determine how many units should be produced in January, February,
and March:
rability enhanced when knowinggoods
Add desired units of ending
whoinventory
finished
is responsible for the budgeting
1,200 process?
3,000 2,000
reference end-of-chapter assignments where LO 5

Desired total units
DQ5. ConCept ▶ Business AppliCAtion ▶ Why does the use of budgets in the
January February March Less desired units of beginning finished
4,200 5,400 8,000
management process reinforce the goodsconcepts

inventory of comparability1,500 and understandability to
students can go to Try It! This provides students
1,200 3,000
Sales in units 3,000 2,400 6,000
better business performance? Total production units 2,700 4,200 5,000
Add desired units in ending finished
with an example to reference as they are work- goods inventory ? ? ?
Desired total units ? ?
short exerCises
? Try IT! se2, se3, se4, e2A, e3A, e4A, e5A, e6A, e7A, e2B, e3B,
ing to complete homework, making getting Less desired units of beginning

finished goods inventory
LO 1, 2
?
Budget Usefulness ? ?
e4B, e5B, e6B, e7B
started less intimidating. Total production units ? ? ?

se1. ConCept ▶ Budgeting is not only an essential part of planning; but it also helps man-
agers command, control, evaluate, and report on operations. Why are the concepts of under-
standability and comparability important in budgeting? List the reasons for your answer.
Jeremy Hoare/Photoshot
LO 3 Production Budget
se2. Windsor Lock Company’s controller is preparing a production budget for the year.
The company’s policy is to maintain a finished goods inventory equal to one-half of
the following month’s sales. Sales of 5,000 locks are budgeted for April. Complete the
monthly production budget for the first quarter:
January February March
Sales in units 5,000 4,000 6,000
Add desired units of ending finished goods inventory 2,000 ? ?
Desired total units 7,000 ? ?
CHE-NEEDLES_FINM-12-0107-020.indd 907 Less desired
15/12/12units
4:24 of
PMbeginning finished goods inventory ? ? ?
CHE-NEEDLES_FINM-12-0107-020.indd 919
Total production units 4,500 ? ?
15/12/12 4:24 PM
CHE-NEEDLES_FINM-12-0107-020.indd 933 15/12/12 4:24 PM
TRILEVEL PROBLEM:
Tying it all Together!
NEW TriLevel Problems within CengageNOW follow

the same Three Section Approach the book employs
by including Concepts, Accounting Applications, and
Business Applications. The problems reinforce and apply
overarching concepts while also tying the three sections
together to give students a complete understanding.
“Any time the students are engaged in

the learning process and have to actively
participate, I think they enhance their
retention of the material. The ability to
relate this to an actual company (whether
real or not) allows students to see this

information in practice.”
Chuck Smith
Iowa Western Community College
96% of instructors surveyed said that the

TriLevel Problem adequately coached
students through thinking about an issue.
“The [TriLevel Problem] links procedure to “It reviews everything students have learned
the creation and use of information, and in a format they will find useful, and it links
closes that loop between what students the three areas together. I love this. Each one
are doing and why it is useful.” ending with a business application.”
Andy Williams Joan Ryan
Edmonds Community College Clackamas Community College
Preface xvii
NEW CengageNOW Features
Help Students Make Connections
NEW Blueprint Problems

▲
In CengageNOW, these problems cover primary learning
objectives and help students understand the fundamen-
tal accounting concepts and their associated building
blocks—not just memorize the formulas required for a
single concept. Blueprint Problems include rich feedback and
explanations, providing students with an excellent learning
resource.
NEW Blueprint Connections ▲
Blueprint Connections in CengageNOW build upon concepts

covered and introduced within the Blueprint Problems. These
scenario-based exercises help reinforce students’ knowledge
of the concept.
NEW Animated Activities

▲
Animated Activities in CengageNOW are videos that guide stu-

dents through selected core topics using a realistic company
example to illustrate how the concepts relate to the everyday
activities of a business.
xviii Preface
NEW CengageNOW Features
Help Students Make Connections
▲
NEW Check My Work Feedback
Written feedback is now available when students click on “Check My Work” in CengageNOW to provide students with
valuable guidance as they work through homework items.

▲
NEW Post-submission Feedback
After students have submitted their assignments for a grade in CengageNOW, they can go back and see the correct
answers to better understand where they might have gotten off track.
NEW Apply It Demos

These demonstration videos in CengageNOW will help students
complete end-of-chapter questions from Section 2.
Preface xix
Acknowledgments
In developing and refining the tenth edition of Managerial Accounting, we wanted to

ensure that we were creating a textbook that truly reflected the way we teach accounting.
To do so, we asked for feedback from over 150 professors, other professional colleagues,
and students. We want to recognize those who made special contributions to our efforts
in preparing this edition through their reviews, suggestions, and participation in surveys,
interviews, and focus groups. We cannot begin to say how grateful we are for the feed-
back from the many instructors who have generously shared their responses and teaching
experiences with us.
John G. Ahmad, Northern Virginia Community College Meg Costello, Oakland Community College
Robert Almon, South Texas College Richard Culp, Ball State University
Elizabeth Ammann, Lindenwood University Sue Cunningham, Rowan Cabarrus Community College
Paul Andrew, SUNY, Morrisville Robin D’Agati, Palm Beach State College
Ryan Andrew, Columbia College Chicago Emmanuel Danso, Palm Beach State College
Sidney Askew, Borough of Manhattan Community College Robert Derstine, Kutztown University
Joe Atallah, Irvine Valley College Michael Dole, Marquette University
Shele Bannon, Queensborough Community College Jap Efendi, University of Texas at Arlington
Michael Barendse, Grossmont College Dustin Emhart, North Georgia Technical College
Beverly R. Beatty, Anne Arundel Community College Denise M. English, Boise State University
Robert Beebe, Morrisville State College Michael Farina, Cerritos College
Teri Bernstein, Santa Monica College J. Thomas Franco, Wayne County Community College
Cynthia Bird, Tidewater Community College Dean Gray, Reedley College
David B. Bojarsky, California State University Timothy Green, North Georgia Technical College
Linda Bolduc, Mount Wachusett Community College Timothy Griffin, Hillsborough Community College
John Bongorno, Cuyahoga Community College Teri Grimmer, Portland Community College
Anna Boulware, St. Charles Community College Michael J. Gurevitz, Montgomery College
Amy Bourne, Oregon State University Qian Hao, Wilkes University
Thomas Branton, Alvin Community College Sara Harris, Arapahoe Community College
Billy Brewster, University of Texas at Arlington Syed Hasan, George Mason University
Nina E. Brown, Tarrant County College Wendy Heltzer, DePaul University
Tracy L. Bundy, University of Louisiana at Lafayette Merrily Hoffman, San Jacinto College
Jacqueline Burke, Hofstra University Shanelle Hopkins, Carroll Community College
Marci L. Butterfield, University of Utah David Hossain, California State University, Los Angeles
Charles Caliendo, University of Minnesota Phillip Imel, NOVA Community College, Annadale
Gerald Childs, Waukesha County Technical College ThankGod O. Imo, Tompkins Cortland Community College
James J. Chimenti, Jamestown Community College Paul Jaijairam, Bronx Community College
Alice Chu, Golden West College Gene Johnson, Clark College
Sandra Cohen, Columbia College Howard A. Kanter, DePaul University
Lisa Cole, Johnson County Community College Irene Kim, George Washington University
Debora Constable, Georgia Perimeter College Christopher Kinney, Mount Wachusett Community College
Barry Cooper, Borough of Manhattan Community College Gordon Klein, University of California, Los Angeles
Cheryl Copeland, California State University, Fresno Shirly A. Kleiner, Johnson County Community College
Susan Cordes, Johnson County Community College Leon Korte, University of South Dakota
xxi
xxii Acknowledgments
Lynn Krausse, Bakersfield College Shannon Ogden, Black River Technical College
Les Kren, University of Wisconsin, Milwaukee Glenn Pate, Palm Beach State College
Donnie Kristof-Nelson, Edmonds Community College Sy Pearlman, California State University, Long Beach
Christopher Kwak, De Anza College Rama Ramamurthy, College of William & Mary
Richard Lau, California State University, Los Angeles Lawrence A. Roman, Cuyahoga Community College
Suzanne R. Laudadio, Durham Technical Community College Gregg Romans, Ivy Tech Community College
George Leonard, St. Petersburg College Joan Ryan, Clackamas Community College
Lydia Leporte, Tidewater Community College Donna B. Sanders, Guilford Technical Community College
Hui Lin, DePaul University Regina Schultz, Mount Wachusett Community College
Joseph Lipari, Montclair State Jay Semmel, Broward College
Xiang Liu, California State University, San Bernardino Andreas Simon, California Polytechnic State University
Angelo Luciano, Columbia College Jaye Simpson, Tarrant County College
Susan Lueders, DePaul University Alice Sineath, Forsyth Technical Community College
Cathy Lumbattis, Southern Illinois University Kimberly Sipes, Kentucky State University
Sakthi Mahenthiran, Butler University Chuck Smith, Iowa Western Community College
Eileen Marutzky, DePaul University Robert K. Smolin, Citrus College
Robert Maxwell, College of the Canyons Jennifer Sneed, Arkansas State University, Newport
Mark McCarthy, DePaul University Lyle Stelter, Dakota County Technical College
Clarice McCoy, Brookhaven College Rhonda Stone, Black River Technical College
Terra McGhee, University of Texas at Arlington Gracelyn Stuart-Tuggle, Palm Beach State College – Boca
Florence McGovern, Bergen Community College Raton
Cheryl McKay, Monroe County Community College Linda Tarrago, Hillsborough Community College
John McQuilkin, Roger Williams University Steve Teeter, Utah Valley University
Jeanette Milius, Iowa Western Community College Don Trippeer, SUNY Oneonta
Jeanne K. Miller, Cypress College Robert Urell, Irvine Valley College
Rita Mintz, Calhoun Community College La Vonda Ramey, Schoolcraft College
Jill Mitchell, Northern Virginia Community College, Patricia Walczak, Lansing Community College
Annandale Scott Wandler, University of New Orleans
Odell Moon, Victor Valley College Chris Widmer, Tidewater Community College
Kathleen Moreno, Abraham Baldwin Agricultural College Andy Williams, Edmonds Community College
Walter Moss, Cuyahoga Community College Wanda Wong, Chabot College
Dennis Mullen, City College of San Francisco Ronald Zhao, Monmouth University
Elizabeth A. Murphy, DePaul University Teri Zuccaro, Clarke University
Penny Nunn, Henderson Community College
Christopher O’Byrne, Cuyamaca College
We also wish to express deep appreciation to colleagues at Santa Fe Community

College, Emory University, and DePaul University, who have been extremely supportive
and encouraging.
Finally, very important to the quality of this book are our Developmental Editor,
Krista Kellman; Executive Editor, Sharon Oblinger; and Senior Brand Manager, Kristen
Hurd.
About the Authors
Susan V. Crosson received her B.B.A. degree in economics and accounting from
Southern Methodist University and her M.S. degree in accounting from Texas Tech
University. She is currently teaching in the Goizueta Business School at Emory

University in Atlanta, Georgia. Until recently, she was the Accounting Faculty Lead
and Professor at Santa Fe College in Gainesville, Florida. She has also been on the
faculty of the U
niversity of Florida; Washington University in St. Louis; University of
Oklahoma; Johnson County Community College in Kansas; and Kansas City Kansas
Community College. She is internationally known for her YouTube accounting videos
as an innovative application of pedagogical strategies. In recognition of her professional
and academic activities, she was a recipient of the Outstanding Service Award from
the American Accounting Association (AAA), an Institute of Management Accoun-
tants’ Faculty Development Grant to blend technology into the classroom, the F lorida
Association of Community Colleges Professor of the Year Award for Instructional

Excellence, and the University of Oklahoma’s Halliburton Education Award for Excel-
lence. Currently, she serves as President of the Teaching, Learning, and Curriculum
section of the AAA. Recently, she served as a Supply Chain Leader for The Commission
on Accounting Higher Education, which published “Pathways to a Profession,” Charting
a National Strategy for the Next Generation of Accountants. She has also served on vari-
ous committees for the AICPA, Florida Institute of CPAs, and the Florida Association
of Accounting Educators.
Belverd E. Needles, Jr., received B.B.A. and M.B.A. degrees from Texas Tech
niversity and his Ph.D. degree from the University of Illinois at Urbana-Champaign.
U
He teaches financial accounting, managerial accounting, and auditing at DePaul Uni-
versity, where he is an internationally recognized expert in international accounting and
education. He has published in leading journals and is the author or editor of more
than 20 books and monographs. His current research relates to international finan-
cial reporting, performance measurement, and corporate governance of high-perfor-
mance companies in the United States, Europe, India, and Australia. His textbooks are
used throughout the world and have received many awards, including (in 2008) the
McGuffey Award from the Text and Academic Authors Association. Active in many aca-
demic and professional organizations, he is immediate past Vice-President-Education of
the American Accounting Association. He has received the Distinguished Alumni Award
from Texas Tech University, the Illinois CPA Society Outstanding Educator Award and
its Life-Time Achievement Award, the Joseph A. Silvoso Faculty Award of Merit from
the Federation of Schools of Accountancy, the Ledger & Quill Award of Merit, and the
Ledger & Quill Teaching Excellence Award. He was named Educator of the Year by
the American Institute of CPAs, Accountant of the Year for Education by the national
honorary society Beta Alpha Psi, and Outstanding International Accounting Educator
by the American Accounting Association. He has received the Excellence in Teaching
Award from DePaul University.
xxiii
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puolittain poltetun savukkeen unohtuneena nuokkuessa hänen
tiukkaan puristettujen huuliensa välissä. Hänen kookas vartalonsa oli
jäykästi ojennettuna, hänen nyrkkiin puserretut kätensä riippuivat
kankeina sivuilla, ja hän näytti kuumeisen maltittomasti pyrkivän
eteenpäin ja vain tahtoansa ponnistamalla pitävän itseänsä
liikkumattomana.
Hän oli unohtanut koko ympäristönsä eikä näyttänyt vähään

aikaan huomaavan, ettei hän enää ollut yksin, ja Caryllista tuntui,
ettei hän voinut häiritä toisen äänettömyyttä.
Kun odottaminen ja toimettomuus alkoivat jo tuntua vikomtista

sietämättömältä ja hän liikahteli rauhattomasti, pyörähti Poju äkkiä
häneen päin ja kysyi:
»Tiedätkö, mitä pikku äiti tarkoitti sanoessaan: 'Isabeau de

Chailles' ja kuka on Isabeau de Chailles?»
Hetkisen Caryll tuijotti häneen tuiki ällistyneenä. Eikö Poju tiennyt

— taivaan hyvä Jumala, eikö hän tietänyt? Sitten hän ihan äkkiä
muisti Saint Hubertin maininneen hänelle, ettei Poju tiennyt, ja
katkerasti hän mietti, miksi oli hänen, juuri hänen, tehtäväksensä
jäänyt selvittää asia miehelle, joka oli niin säälimättömästi ryöstänyt
tytön omakseen.
Mutta joka suhteessa oli parempi, että hänen veljensä saisi tietää
totuuden, saisi tietää sen ilman lisäviivytystä, ja niinpä hän tukahdutti
omat tunteensa ja pää toisaalle käännettynä kertoi hyvin lyhyesti
tarinan, jonka hän oli itse kuullut Pojun tulo-iltana.
Ja hänen lopetettuaan kertomuksensa kääntyi hänen

kuuntelijansa sanaakaan virkkamatta ja poistui äänettömänä.
Kun Poju vihdoin seisahtui, ei hän nähnyt sitä polkua, jolle hän oli
umpimähkäisesti osunut, eikä kuutamoista, valkeahohteista
tasankoa, vaan ainoastaan kasvot — hienot, soikeat kasvot ja
tummat, rukoilevat silmät, jotka olivat sumeat ja kosteat kyynelistä,
hänen aiheuttamistansa kyynelistä.
Hänestä tuntui tukehduttavalta, ja hän kiskoi vaipan paksuja,

kaulansa ympärille kiedottuja laskoksia.
Minkä erotuksen tämä tarina teki? Luultiinko hänen välittävän siitä,

kuka tyttö oli? Kreivitär de Chailles tai Jasmin, tanssijatar — mitä se
hänestä merkitsi? Itse tyttö oli kaikki kaikessa, vain tyttö, jota hän
rakasti, jota hän ei ollut sydämessänsä lakannut rakastamasta,
vaikka hän vimmoissaan oli väittänyt toisin ja vannonut vihaavansa
häntä. Ja lainkaan ajattelematta tytön säälittävää heikkoutta,
lainkaan ajattelematta omia voimiansa hän oli laskenut koko
luontonsa ominaisen rajuuden valloilleen ja rangaissut tyttöä
kauheasti siitä kavalluksesta, josta hän häntä syytti.
Tyydyttääksensä julmaa ja järjetöntä kostonhimoaan hän oli

alentunut jopa henkilökohtaiseen väkivaltaan. Hullun raivon vallassa
hän oli rääkännyt häntä — häntä, Jasminia, hentoa, haurasta
kukkaansa! Hän oli tuottanut hänelle sekä ruumiillisia että sielullisia
kärsimyksiä, leikitellyt hänen herkkäuskoisuudellaan ja pelollaan ja
murjonut armottomilla käsillään viehkeätä pikku olentoa, vaikka hän
nyt olisi valmis uhraamaan elämänsä saadaksensa taaskin pitää sitä
sylissään edes hetkisenkin. Mitä olivat ne tuskaiset viikot merkinneet
Jasminille?
Jasmin oli rukoillut häneltä armoa — ja sitten hän oli kohdellut

tyttöä halpamaisesti.
Jasmin oli itkenyt hänen jalkojensa juuressa — mutta hän oli
pilkannut häntä, nauranut hänen rukouksilleen ja ivannut hänen
viattomuuden- ja rakkaudenvakuutuksiaan. Ja Jasmin oli rakastanut
häntä, nyt hän oli siitä varma, rakastanut häntä ihan loppuun saakka,
rakastanut häntä sittenkin, vaikka hän oli lyönyt häntä.
Yhtä selvästi kuin silloin, viimeisenä yönä, hän näki Jasminin

tuskaiset, kyyneleiset silmät, kuuli vapisevan, vetoavan äänen, ja
häneltä pusertui ankara nyyhkytys.
»Allah, Allah, kaikkein armollisin», rukoili hän, »jospa ennättäisin

hänen luoksensa ajoissa — jospa saisin sovittaa —»
Enää hänen oli mahdoton odottaa. Hevosten olisi ponnistettava

eteenpäin, vaikka ne ratsastettaisiin kuoliaiksi. Hän pyörähti ympäri
ja luikkasi äkkiä, ja miehet kapsahtivat pystyyn.
Ja ennenkuin hän ehti muiden luokse, riensi vainuaja hänen

ohitsensa, nyt taaskin ratsastaen, sillä nousseen kuun valossa jäljet
näkyivät melkein yhtä selvästi kuin päivällä.
Jälleen ratsailla oli hänen helpompi kestää, ja nopea liike, takaa

kuuluva kavioiden töminä ja kasvoja hivelevä lauha yö-ilma olivat
omituisen rauhoittavia ja valoivat hänen mieleensä uutta toivoa ja
uutta rohkeutta.
Mutta kun tunti toisensa jälkeen kului, ja jäljet yhä hellittämättä

jatkuivat edelleen, haihtui häntä tukenut toivo, ja hirvittävä pelko,
joka alusta alkaen oli jäytänyt hänen sydäntänsä, muuttui
sieluntuskaksi, niin että hän vääntelehti ikäänkuin ruumiillisesta
kivusta. »Liian myöhään! Liian myöhään!» Se oli kuin viuhuvan
tuulen huokaus. Ja pistävän hiekan suhinasta, nelistävien kavioiden
kumeasta jymystä hän oli kuulevinansa murheellisen kaiun: »Liian
myöhään, liian myöhään!»
Hän ei ollut milloinkaan ennen hoputtanut isoa, mustaa orittaan

niinkuin hän sitä nyt hoputti, milloinkaan ennen ei hänen terävistä
kannuksistaan ollut tihkunut verta niinkuin niistä nyt tihkui. Jo aikoja
sitten loppunut tie oli jäänyt kauas jälkeen, ja hän ratsasti
painautuneena melkein hevosensa kaulaan kiinni, kuumeiset,
hiekkakuoren reunustamat silmät tähdättyinä ainoastaan sekaviin
kavionjälkiin, jotka kertoivat yhtä vinhasta, yhtä hurjasta vauhdista
kuin heidänkin vauhtinsa oli.
Kilometrin toisensa jälkeen hän kannuksillaan ja äänellään kiihoitti

uljasta ratsuansa, jonka voimakkaiden jäsenien hän tunsi
värähtelevän ja vapisevan polviensa välissä. Ja yhäti Caryll ja
heimon soturit seurasivat häntä jonossa kumartuneina syvään
satuloissansa, kasvot harmaina ja aavemaisina aamusarastuksen
säälimättömässä valossa. Eteenpäin, aivoissa vain yksi ajatus.
Eteenpäin, kunnes hänen päätänsä huimasi ja hänen sydämensä
raskas sykintä humisi hänen korvissaan kuin rummunpärrytys.
Eteenpäin, kunnes itäiselle taivaalle levisi vaalea punerrus.
Eteenpäin taaskin aaltoilevalla maaperällä. Eteenpäin, ohi matalan
jonon kallioisia kumpuja, jotka olivat kohonneet näkyviin
hämmästyttävän äkkiä. Ne piilottivat jäljet, jotka noudattivat
kumpujen suuntaa ja sivuuttivat korkeimman kallioseinämän juuren
ja sitten jyrkästi kääntyivät vasemmalle.
Huimaa vauhtia Poju kiersi ulkonevan kallionkielekkeen ympäri

laajassa kaaressa, mutta heittäytyi sitten taaksepäin, hengähtäen
voimakkaasti, ähkäisten ja kiskoen oriinsa suupieliä minkä jaksoi.
Hänen edessänsä oli ränstynyt kylä-pahanen, hiekkaan
hautautunut ja hylätty; katottomat majat ja rapistuneet tiiliseinät
seistä törröttivät kolkkoina ja lohduttomina kylmässä
aamuhämärässä, näyttäen asumattomilta ja autioilta. Mutta samassa
kun Poju oli pujahtanut esiin suojaavan kallioseinämän takaa olivat
hänen tähyilevät silmänsä havainneet väijyvän, tarkkailevan
hahmon, joka nopeasti oli hiipinyt taemmaksi, ja kadonnut
rappeutuneiden talojen väliin, ja hän arvasi pitkän takaa-ajon nyt
päättyneen.
Väsymys karisi hänestä, ja hän tunsi vain hurjaa, hivelevää

kiihtymystä. Siihen hukkui pelkokin, joka kalvoi häntä, kun hän
hypistellen vyöstään irroittamaansa jykevätekoista revolveria odotti,
kunnes Caryll ja muut miehet porhalsivat näkyviin. Päästäen sitten
kaikuvan luikkauksen hän viittasi heille ja lähti kiitämään kylää kohti
yhäti muutamia askelia toisten edellä.
Ja kiljuen kuin pahathenget, joina heitä pidettiin, riensivät

arabialaiset hänen jälessään, kilpaillen siitä, kuka ennättäisi
ensimmäisenä, ja sulloutuen yhteen lähestyessänsä ensimmäistä
koukertelevaa, hiekkakinosten peittämää kujaa.
Vinhasti nelistäen ja harppaillen tiellensä osuvien soraläjien ylitse

syöksyi kookas ori pitkin kapeata kujaa vähäiselle aukeamalle,
entiselle kauppatorille, ja liukui pitkän matkan seisahtuessaan, kun
Poju kiskoi sen vapisten kavahtamaan takajaloilleen räiskyvän
kuulatuiskun keskellä.
Laukaukset tulivat puolittain sortuneen, katottoman pylväistön

pimeästä sisäänkäytävästä, mutta kun aukio täyttyi Pojun
seuralaisista ja vastaukseksi jyrähti yhteislaukaus, lakkasi
ampuminen heti. Ja keikahdettuansa satulasta Poju hyökkäsi
hämyiseen käytävään Caryllin ja miesten rientäessä yhtenä
mylläkkänä hänen kintereillään.
He juoksivat sokkeloisissa, kolkoissa, mutkittelevissa käytävissä,

ihmetellen, ettei kuulunut minkäänlaisia ääniä, ja odottaen väijytystä,
joka tuntui välttämättömältä, kunnes he uudelleen tuoksahtivat
päivänvaloon ja oivalsivat, mistä selittämättömältä tuntunut hiljaisuus
johtui.
Luvultansa heikompina ja haluttomina enää tukemaan yritystä,

jonka tulokset olivat olleet tyyten toisenlaiset kuin he olivat
odottaneet, olivat von Lepelin miehet ensimmäisen vähäisen
puolustautumiskokeensa jälkeen jättäneet palkkaajansa oman
onnensa nojaan ja kiiruhtivat pelastamaan oman nahkansa ja
saamansa saaliin vartoamatta lopullista suoritusta, jota, sen he
arvasivat, he eivät ikinä saisi.
Kun Poju seuralaisineen syöksyi murtuneesta ovesta leveälle,

lakealle aavikolle avautuvalle kadulle, näkivät he viimeisten
vastustajainsa kapuavan satulaan ehättääkseen jo täyttä vauhtia
pakenevien tovereittensa jälkeen.
Jupisten komennuksen Poju viittasi S'ririä ja sotilasosastoa

ajamaan heitä takaa. Mutta hän itse seisoi hievahtamatta paikallaan,
kujan toisesta päästä kuuluvasta laukausten räiskeestä välittämättä
ja huomaamatta edes Caryllin läheisyyttä, värähtämättä tuijottaen
erään talon ovetonta sisäänkäytävää, jonka vieressä hyppi seinään
kiinnitettyyn renkaaseen sidottu hevonen, korskuen hikisenä
hermostumisesta ja kauhusta.
Päästäen sitten yhteen purtujen hampaittensa välistä pitkän

sihauksen hän alkoi liikkua melkein huomaamattomasti, hiipien
hitaasti ja kuulumattomasti kapeata ovea kohti, josta von Lepel
revolveri kädessä, vyötäisiänsä myöten alastomana ja
paljasjalkaisena, likaiset kasvot revittyinä ja verisinä tuijotti häneen
kasvoillansa hillitöntä epätoivoa verhoava röyhkeän halveksimisen
ilme.
Sitten alkaneen hiljaisuuden aikana kaikkien pidättäessä

henkeänsä kajahti pilkallinen nauru, ja saksalainen urkkija kallistui
eteenpäin. Virnistäen hän ampui polvensa varasta. Kuula suhahti
sentimertin murto-osan päästä Pojun pään sivuitse, riipaisi reiän
hänen haionsa reunaan ja osui hänen takanansa seisovaan
sotilaaseen, joka sortui maahan, päästäen omituisen, hiljaisen,
yskäisyn ja huokauksen sekaisen äänen.
Mutta samassa, ennenkuin von Lepel ehti laukaista toistamiseen,

ponnahti Poju eteenpäin nopeasti ja joustavasti kuin hyppäävä
pantteri, sysäsi saksalaisen revolverin syrjään, ja karkasi hänen
kimppuunsa.
Aavistamaton hyökkäys, jota torjumaan von Lepel ei ollut

valmistautunut, horjutti hänet tasapainosta; hän paiskautui tiiliseinää
vasten ja ponnisteli turhaan koettaessaan irroittaa kurkkuunsa
puristuneita teräksenlujia käsiä, jotka hitaasti kuristivat hänestä
hengen. Hän tunsi, että hän oli alakynnessä, että vaikka hän olikin
harjaantunut voimistelija, hänen voimansa olivat heikot verrattuina
hänen vastustajansa voimiin ja että kuolema kohtaisi hänet
kauheammalla tavalla kuin hän koskaan oli kuvitellut, ja hän kävi
heikoksi ja kylmäksi pelosta, jota hän ei ollut milloinkaan ennen
tuntenut.
Tukehtumaisillaan ja kiemurrellen, veristävien silmiensä

pullistuessa ulos kuopistaan hän rimpuili ja taisteli henkensä edestä,
johon hän yhä takertui, tuijottaen tiukkoihin, säälimättömiin
kasvoihin, jotka kumartuivat yhä likemmäksi häntä, kunnes hän
vihdoin menetti näkönsä, hänen värisevät raajansa vavahtivat
viimeisen kerran suonenvedontapaisesti ja hänen päänsä retkahti
hervottomasti eteenpäin.
Ja horjuen taaksepäin Poju hellitti ruumiin, päästäen pitkän,

puistattavan huokauksen, seisoi hetkisen paikallaan ja silmäili, ei
vainajaa, vaan omia verisiä sormiansa. Sitten häntä taaskin puistatti
kamala väristys, ja katsahtamattakaan hartaasti tarkkaileviin
arabialaisiin tai Carylliin, joka nojasi seinään ruumiillisesti
pahoinvoipana kammottavasta näystä, hän kumartui ja astui
matalasta ovesta sisälle. Häntä ei omatunto soimannut siitä, mitä
hän oli tehnyt. Se, että hän oli paljain käsin surmannut miehen, kuten
kerran hänen isänsä oli tehnyt aikaisemmin, ei sillä hetkellä
merkinnyt hänestä mitään. Hän ajatteli ainoastaan sitä, mitä hän
löytäisi tämän rappeutuneen talon sisäkammioista.
Hieman horjuen käydessään hän eteni puuduttavan pelon vallassa

pienen, avoimen pihan poikki, useiden katottomien huoneiden
lävitse, mitään näkemättä kompuroiden kasaantuneiden roska- ja
soraläjien ylitse, kunnes vihdoin vapisten pysähtyi raunioiden
keskellä kokonaisena ja eheänä säilyneen pienen huoneen ovelle.
Vaisto vakuutti hänelle, että hänen etsimänsä olento oli siellä, ja

hetkisen hän empi nyrkkiensä puristuessa tiukemmalle, niin että
kynnet upposivat syvälle hänen kämmeniinsä. Sitten hän hyvin
hitaasti astui kynnyksen ylitse ja tutkivasti tähyili hämärää, likaista
huonetta.
Ja etäisessä sopessa oli Jasmin — ei kuolleena, kuten hän oli

pelännyt, vaan rukoillen kuolemaa äänellä, joka sittemmin kaikui
Pojun korvissa vuosikausia. Hän kyyrötti puolittain alastomana
maassa, hänestä näki, että hän oli kamppaillut epätoivoisesti, hänen
hajallaan oleva tukkansa valui hänen paljaille olkapäilleen, ja hän
valitti ja vääntelehti tuskissansa kasvot painettuina rapautunutta
seinää vasten.
Ja tuskin hengittäen Poju seisoi kuin kivettyneenä, tuijottaen

murtuneeseen, säälittävään pikku olentoon, samalla kun hänen
poikamaiset piirteensä yksi toisensa jälkeen ikiajoiksi katosivat, ja
hänen kasvonsa muuttuivat tiukoiksi ja peloittaviksi.
»Jasmin!» Käheänä puristui huudahdus hänen huuliltansa kuin

helvetissä kituvan sielun valitus, ja hurjasti parahtaen tyttö hypähti
pystyyn.
»Herra!» Hennot kädet ojennettuina kiihkeään tervehdykseen hän

syöksyi lattian poikki. Mutta hänen ehdittyänsä Pojun luokse muuttui
hänen silmiensä riemuisa ilme äkkiä pelokkaaksi, ja hän peräytyi,
peittäen kasvonsa käsillään. Tukahdutetusti nyyhkyttäen hän lankesi
Pojun jalkojen juureen ja kiemurteli hiekkaisella permannolla.
»Tapa minut, tapa minut!» uikutti hän.
Pojun silmien edessä väikkyi kummallista utua, joka sumensi

hänen katsettaan, ja hänen jyskyttävissä ohimoissansa tuntui
kauhea puristus, ikäänkuin rautavannetta olisi hitaasti kiristetty
hänen aivoihinsa.
Tappaa Jasmin — ja sitten itsensä. Oliko hänellä enää muuta

mahdollisuutta! Koettaen vastustaa jäistä kylmyyttä, joka hiipi hänen
kankeihin jäseniinsä, pitäen häntä liikkumattomana, hän hapuili
kädellään revolveria, jonka hän oli pistänyt takaisin vyöhönsä.
Mutta kun hänen sormensa puristuivat jykevän aseen nupin
ympärille, hätkähti hän rajusti, ja hänen kasvojansa vääristi hirvittävä
nytkähdys. Tappaa Jasmin — menettää hänet myöskin toisessa,
tuntemattomassa maailmassa, jossa Jasminin viaton sielu olisi
korkealla, hänen synnintahraaman sielunsa yltämättömissä! Ja
minkä tähden hän aikoi Jasminin surmata?
Vain sen arvoinenko hänen rakkautensa oli? Ähkäisten niin, että

hänen sydämensä tuntui olevan halkeamaisillaan, hän sinkosi
revolverin kädestään, sieppasi työtön syliinsä ja puristi häntä
rintaansa vasten intohimoisen voimakkaasti.
»Jasmin, Jasmin, anna anteeksi.»
Melkein pyörtyneenä tyttö lepäsi hänen tiukassa syleilyssään,

kunnes vihdoin kosteat silmäripset, jotka olivat kuin tumma
silkkireunus pehmeällä poskella, alkoivat värähdellä hänen tulisista
suudelmistaan ja kyyneleiset silmät, joista uhkui ainoastaan
rakkautta ja luottamusta, avautuivat hitaasti ja katsoivat hänen
silmiinsä.
»Mikä anteeksiantaja minä olen?» jupisi tyttö nöyrästi. »Enkö ole

sinun, ja etkö sinä saa tehdä minulle mitä tahdot?»
Arkaillen sitten pieni, ruskeahipiäinen käsi pujottautui Pojun

kaulaan. »Herra, herra, jos tietäisit, kuinka sinua rakastan — kuinka
olen ikävöinyt sinun rakkauttasi! Mutta uskothan nyt vihdoinkin?
Uskothan nyt, etten kavaltanut sinua?»
Pojun kasvot painuivat hänen rinnallansa aaltoilevaan, tummaan

tukkaan. »Uskon, uskon», vastasi hän katkonaisesti. »Antakoon
Allah minulle anteeksi, kuten sinä olet antanut — Jasmin, rakkaani
— Jasminini!»
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Financial and Managerial Accounting 9th Edition John

(Original PDF) Horngren's Financial & Managerial

CHAPTER 3 Costing Systems: Process Costing 85

BUSINESS INSIGHT DEAN FOODS 85 Accounting for Costs 94

CHAPTER 4 Value-Based Systems: Activity-Based Costing and Lean Accounting 123

The New Operating Environment and Lean Chapter Review 144

CHAPTER 5 Cost-Volume-Profit Analysis 163

BUSINESS INSIGHT FLICKR 163 The Scatter Diagram Method 169

Cost-Volume-Profit Analysis 173 Assumptions Underlying CVP Analysis 178

CHAPTER 6 The Budgeting Process 199

CHAPTER 7 Flexible Budgets and Performance Analysis 247

BUSINESS INSIGHT VAIL RESORTS 247 Residual Income 258

CHAPTER 8 Standard Costing and Variance Analysis 289

BUSINESS INSIGHT IROBOT CORPORATION 289 Business Application 298

CHAPTER 9 Short-Run Decision Analysis 331

BUSINESS INSIGHT BANK OF AMERICA 331 Segment Profitability Analysis 338

CHAPTER 10 Capital Investment Analysis 365

CHAPTER 12 Quality Management and Measurement 435

BUSINESS INSIGHT FACEBOOK 435 Measuring Quality: An Illustration 445

Financial Measures of Quality 440 Chapter Review 453

CHAPTER 13 The Statement of Cash Flows 469

Step 3: Determining Cash Flows from Cash Flow Ratios 491

SUPPLEMENT TO CHAPTER 13 The Direct Method of Preparing the Statement of

CHAPTER 14 Financial Statement Analysis 528

Appendix A The Time Value of Money 585

We talked to over 150 instructors and discovered that current

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Breaking Down the Three Section Approach

SECTION 2: ACCOUNTING APPLICATIONS

910 Chapter 20: The Budgeting Process

seCtion 2 ACCoUnTIng APPLICATIons

Identify the elements

Prepare the operating

Budgets Balance Sheet

SECTION 3: BUSINESS APPLICATIONS

926 Chapter 20: The Budgeting Process

seCtion 3 BUsIness APPLICATIons

Budgeting and goals

© Cengage Learning 2014

The Budgeting Process

Business insight TriLevel Problem

Each chapter opens with a Business Insight that shows how a

budgeted small company would use accounting information to make deci-

3. Business AppliCAtion ▶ Why are budgets an essential part of

planning, controlling, evaluating, and reporting on business? end of each

Apply It! and Try It! Sample Company is preparing

reference end-of-chapter assignments where LO 5