472 ACCOUNTING FOR MANAGERS
Marginal cost, 106, 203
Margin of safety, 109 – 10
Market-to-book ratio, 32
Market value added, 15
Marketing, 103 – 4, 115
market segments, 104, 116
Mark-up, 111
Marxist, 61 – 2
Matching principle, 32, 69, 72
Materials, 123 – 4, 128 – 9, 131 – 3
materials variance, 231 – 3
Microsoft, 33
Monetary measurement, 32
Motorola, 136
National Coal Board, 174
Natural perspective, 56
Net present value (NPV), 186 – 8
factors (table), 193
Net profit, 70, 155
Non-cybernetic, 58
Non-financial performance
measurement –seePerformance
measurement
Non-production overhead, 157
Non-rational, 55 – 6
Normative view, 248
Notes to the accounts, 84
Open system, 56
Operating and financial review, 84
Operating profit, 70
to sales (ratio), 85
Operations, 121 – 2
Opportunity cost, 35, 129, 144
Optimum selling price, 112 – 13
Ottakar’s (case study), 90
Overhead, 143, 157
allocation, 158 – 9, 168 – 70, 172
Pacioli, 6
Paradigm, defined 50
paradigmatic pluralism, 64
paradigm shift, 249
Pareto principle, 77
Payback, 183, 186, 189
Performance measurement, 9, 18 – 19, 32,
43 – 7, 56, 160, 182
Performance Measurement Association, 53
Performance Prism, 46
Performance Pyramid, 45
Period costs, 155
Planning, decision-making and control
defined, 5
Planning, programming and budgeting
system (PPBS), 208
Political economy, 61
Population ecology theory, 57 – 8
Power, 62–3
Predictive model, 41 – 2
Prepayments, 72 – 3
Present value –seeNet present value
Price, 27, 69, 203
pricing strategies, 104, 111 – 15
Price/earnings ratio, 87, 89
Prime cost, 157, 168
Priority-based budget, 208
Process costing, 124
Product costs, 155
Product market, 14, 15
Product/service mix, 127
Product-sustaining activities, 169
Production, 122, 126
overhead, 157
Profiling, 210
Profit, 26 – 7, 69, 106 – 7
controllable, 198
profit before interest and taxes (PBIT), 70,
88
profit centres, 20, 196
profit-volume graph, 110
Profit and Loss account, 26, 29, 67, 69 – 70, 84
Profitability, 84 – 5, 88
profitability index, 187
Provisions, 72 – 3, 100
Purchasing, 121 – 2, 147, 239, 240Quality –seeTotal quality management
Quality Bank (case study), 176 – 8
Quality Printing Company (case study),
137–8Radical paradigm, 58, 61 – 3
Ranking, 128
Ratio analysis, 84, 88
Rational perspective (or paradigm), 50, 55,
56, 248
Raw materials, 123
Relevance Lost,7,9,159–60
Relevant costs, 129 – 33, 204
defined, 129
equipment replacement, 131
labour, 144–6
make versus buy, 130
materials, 131 – 3
Relevant range, 106
Research, 247 – 50
Residual income (RI), 197 – 9, 206
Resource dependence theory, 58
Responsibility centres, 20, 34, 125
Results and Determinants Framework, 45