Uni Reading List
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Management Accounting cover

Business

Business

Management Accounting

Carsten Rohde; Will Seal; Karen Mustard; Ray H. Garrison; Eric Noreen

A UK and European adaptation of Garrison and Noreen's managerial accounting text, written for students meeting cost and management accounting for the first time. It explains how managers use cost information to make decisions, plan and control through budgets, and assess performance, with worked examples, European company cases and features linking topics to accounting careers.

Prerequisites: No prior management accounting is required; some familiarity with basic financial statements helps but is not essential.

Difficulty Level
Beginner
Academic Level
Undergraduate
management accountingcost accountingbudgetingperformance managementTextbook

01 / Reading Guide

Reading Guide

Citation

Rohde, C., Seal, W., Mustard, K., Garrison, R. H., & Noreen, E. (2024). Management Accounting (7th ed.). McGraw Hill.

Chapter Summary

This is the European edition of Garrison and Noreen's Managerial Accounting, adapted for courses in the UK and Europe by Carsten Rohde (Copenhagen Business School), Will Seal (formerly Loughborough University) and Karen Mustard (University of Northampton). The seventh edition was published in October 2024 (copyright 2025) and runs to about 870 pages in nineteen chapters and four parts. McGraw Hill describes it as covering cost and management accounting, information for decision making, the planning and control of budgets and reporting, and performance management in a strategic context, for students from introductory to advanced levels. Recurring features include "Focus on Practice" boxes drawing on well-known companies, "Management Accounting in Action" dialogues set in realistic business situations, cross-references between chapters, and review questions. New in this edition are "Focus on Employability" boxes based on the CGMA Competency Framework, new or updated sections on sustainability and corporate social responsibility, big data and analytics, risk management after COVID-19 and graphing skills, end-of-chapter material graded by difficulty, and expanded Excel exercises.

Part 1: An Introduction to Management and Cost Accounting: Cost Terms, Systems Design and Cost Behaviour

Chapters 1–5: Management Accounting and the Business Environment; An Introduction to Cost Terms, Concepts and Classifications; Cost Behaviour: Analysis and Use; Job-Order and Service Department Costing; Process Costing

The opening part places management accounting in its business setting, sets out the vocabulary of cost classification, and shows how costs behave as activity changes. It then covers the two basic product costing systems: job-order costing (with the allocation of service department costs) and process costing.

Part 2: Information for Decision Making

Chapters 6–10: Cost-Volume-Profit Relationships; Profit Reporting under Variable Costing and Absorption Costing; Performance Measurement and Reporting on Segments; Activity-Based Costing; Relevant Costs for Decision Making

Part 2 uses cost behaviour for analysis: cost-volume-profit relationships, the comparison of variable and absorption costing in profit reports, segment reporting and performance measurement, activity-based costing as an alternative way of assigning overheads, and relevant costs for short-term decisions.

Part 3: Planning and Control

Chapters 11–15: Profit Planning and the Role of Budgeting; Standard Costs and Variance Analysis; Flexible Budgets and Performance Reporting; Capital Investment Decisions; Pricing and Intra-company Transfers

The control cycle: budgeting and profit planning, standard costs with variance analysis, and flexible budgets for performance reports. The part ends with long-term capital investment decisions and with pricing, including transfer pricing between parts of the same company.

Part 4: Value Metrics and Performance Management in a Strategic Context

Chapters 16–19: Strategic Management Accounting and the Balanced Scorecard; Management Control, Risk and Corporate Governance; Business Process Management: Towards the Lean Operation; Strategic Perspectives on Cost Management

The final part widens the view from techniques to strategy and organisation: the balanced scorecard and strategic management accounting, management control in relation to risk and corporate governance, business process management and lean operations, and strategic approaches to managing cost. These chapters reflect the European authors' research interests in management control, governance and performance metrics.

Key Concepts

Part 1: Costs and costing systems

  • Cost classification: grouping costs by behaviour, traceability and purpose, so the right cost is used for each task.
  • Cost behaviour: how costs change with activity, the basis for most later analysis.
  • Job-order and process costing: the two main systems for assigning costs to products and services.

Part 2: Decision making

  • Cost-volume-profit analysis: how changes in volume, price and cost affect profit.
  • Variable versus absorption costing: two ways of treating fixed production overheads in profit reports.
  • Activity-based costing: assigning overheads through the activities that cause them.
  • Relevant costs: the costs and revenues that differ between alternatives.

Part 3: Planning and control

  • Budgeting and flexible budgets: plans expressed in money, and budgets adjusted to the actual level of activity.
  • Variance analysis: comparing actual results with standard costs to find causes.
  • Capital investment appraisal: evaluating long-term investments.
  • Transfer pricing: prices charged between units of the same company.

Part 4: Strategy and control

  • Balanced scorecard: a set of financial and non-financial measures linked to strategy.
  • Management control and governance: how organisations align behaviour with goals and manage risk.
  • Lean operations: managing business processes to remove waste.

Critical Analysis

Strengths

  • An American core adapted for Europe. The book rests on Garrison and Noreen's American text, and the publisher says it has been tailored to UK and European courses, with a balanced discussion of theory and practice.
  • Complete coverage in one volume. The nineteen chapters run from cost terms to strategic performance management, so one book can serve an introductory module and a later intermediate one.
  • Practice and careers. The Focus on Practice boxes, Management Accounting in Action dialogues and the new Focus on Employability boxes connect the techniques to real companies and to accounting roles. Graded exercises, problems and cases, plus Excel exercises and the Connect platform, give a wide choice of practice.
  • Strategic and governance chapters. Part 4 extends the book into management control, risk, corporate governance and lean operations, and the new edition adds sustainability, CSR and data analytics.

Limitations

  • Length. At about 870 pages it contains far more than one course can use, and the publisher's claim to serve introductory through advanced levels means beginners must be steered to the core chapters.
  • Adapted rather than original. The structure follows the American parent text; students who want a fully UK approach to costing, including professional examination topics, may prefer Drury and Tayles.
  • Online resources tied to Connect. Some practice material and the adaptive reading are delivered through McGraw Hill's Connect platform, which depends on institutional access.
  • No published reviews found. The assessment above rests on the publisher's description and the table of contents.

Where It Fits in the Course

OpenStax's Principles of Accounting, Volume 2: Managerial Accounting is the other introductory book in the course: free, openly licensed and covering cost concepts, product costing, budgeting, variances and capital investment. It is useful as a free companion for Parts 1–3 of this book. Drury and Tayles's Management and Cost Accounting is a UK text covering the full range of cost and management accounting, written with professional examinations as well as degrees in mind, and is the natural next step or alternative for accounting specialists. Datar and Rajan's Horngren's Cost Accounting treats costing as a tool for decisions and strategy in more depth.

Atrill and colleagues' Management Accounting for Decision Makers focuses on analysis, planning and strategic decisions. For Part 4 of this book, Merchant and Van der Stede's Management Control Systems is the graduate-level treatment of controls, performance measures and incentives, and the natural follow-up to Chapters 16–17.

How to Use This Book

The book suits undergraduates in accounting or business taking a first or second course in management accounting. No previous management accounting is needed; familiarity with basic financial statements helps.

A practical plan:

  • First course: Part 1 (Chapters 1–5), then Chapters 6, 7, 10 and 11–13. These give cost terms and behaviour, product costing, cost-volume-profit analysis, relevant costs, budgeting and variance analysis.
  • Second course: Chapters 8, 9, 14 and 15 (segments, activity-based costing, capital investment, pricing and transfers), then Part 4.
  • Practice: for each chapter, work the review questions and then exercises in order of difficulty; use the Excel exercises alongside the chapters on cost-volume-profit analysis, budgeting and capital investment.

Read the Focus on Practice boxes and the Management Accounting in Action dialogues; they show how the techniques are used in companies. Use the Focus on Employability boxes when choosing modules or preparing for placements.