Tutoring for Cost Accounting A Managerial Emphasis by Horngren, Datar Rajan

Every business school student encounters cost accounting in their business school program. Cost accounting courses may be called management accounting, managerial accounting, managerial decision-making, etc. Note the difference between financial accounting and cost or managerial accounting here. Since our goal is to provide tutoring for all the quantitative courses in a business program, our graduate-level accounting tutors provide live online cost or managerial accounting tutoring for MBA, CPA, and CFA students. One of the most popular managerial accounting textbooks we encounter is Cost Accounting: A Managerial Emphasis by Charles T. Horngren, Srikant M. Datar, and Madhav V. Rajan. The textbook Cost Accounting: A Managerial Emphasis is published by Pearson.

The first edition of ‘Cost Accounting: A Managerial Emphasis’ was published in 1962 with Charles T. Horngren alone as the author, making this textbook more than 6 decades in print! The first edition introduced cost accounting as a critical component of managerial decision-making and laid the foundation for modern cost management practices as it developed over the years. We review the managerial accounting textbook by Horngren, Datar, and Rajan on this page:

Why Cost Accounting/Managerial Accounting is Important

Cost accounting is important for a number of business reasons, be it as an owner, investor, manager, or regulator. Cost accounting comes into play in various ways, including in strategic decision-making, operational control, building a competitive advantage, ensuring regulatory compliance and control, evaluating management performance, fair compensation, especially in performance rewards, enabling innovation and growth, etc.

Cost accounting is especially important for many strategic decisions, including pricing, product mix, market-entry, and make-or-buy decisions.

With the advent of technology, cost accounting and managerial accounting have enabled managers, even of large-scale operations, to track, understand, and control costs, enabling them to identify inefficiencies and reduce waste. Cost accounting helps reveals opportunities for building a strategic advantage, provides data for budgeting and forecasting and supports investment decisions by providing detailed cost-benefit analyses.

What is very important for investors and managers is that managerial accounting helps provide accurate profitability analysis by product, customer, or segment. It also improves performance management and enables better performance-based compensation schemes. This has become possible with the development of variance analysis over the last few decades.

Modern cost accounting systems are becoming more sophisticated, incorporating data analytics and artificial intelligence to provide real-time insights for decision-making.

Dual Course Textbook in Cost Accounting by Horngren

The ‘Cost Accounting: A Managerial Emphasis’ textbook by Horngren, Datar, and Rajan is comprehensive. Most MBA courses do not and cannot cover all the chapters in the textbook, so they are usually taught in two or three courses.

Professors can choose topics they want to cover in the introductory course. The second and subsequent courses can cover additional topics offered as electives for those interested. MBA programs call the subsequent courses managerial decision making and similar names to attract MBA students into the course as alternate names draw more students than a course with the name cost accounting.

Why is the textbook ‘Cost Accounting: A Managerial Emphasis’ by Horngren, Datar, and Rajan so Popular?

The textbook Cost Accounting: A Managerial Emphasis by Charles T. Horngren, Srikant M. Datar, and Madhav V. Rajan is popular in accounting education for several reasons:

  1. An Early Bird: The textbook Cost Accounting: A Managerial Emphasis by Charles T. Horngren was an early bird when it was first published in 1962. It may not have been the very first book on this subject, but it was among the few that took a managerial decision-making perspective.
  2. Continuous Improvement: Charles T. Horngren, along with additional authors including George Foster, Srikant M. Datar, and Madhav V. Rajan, have kept improving the textbook by adding the latest and most relevant content over its 17 editions. For example, The textbook Cost Accounting: A Managerial Emphasis added activity-based costing in the 1980s to artificial intelligence and sustainability in recent editions to stay current.
  3. Author Expertise: The author team combines deep academic knowledge with practical experience. Horngren served on the Accounting Principles Board for six years, the Financial Accounting Standards Board Advisory Council for five years, and the Council of the American Institute of Certified Public Accountants for three years. For six years, he served as a trustee of the Financial Accounting Foundation, which oversees the Financial Accounting Standards Board and the Government Accounting Standards Board. Horngren is a member of the Accounting Hall of Fame. Horngren was a pioneering figure in accounting education, while later authors like Datar, Foster, and Rajan brought fresh perspectives from their research and consulting work with major companies.
  4. Clear Writing Style: The textbook Cost Accounting: A Managerial Emphasis is known for its clear writing style. This alone makes the Cost Accounting textbook by Horngren, Datar, and Rajan a popular book among MBA students.
  5. Real-World Examples: Cost Accounting: A Managerial Emphasis by Horngren, Datar, and Rajan uses plenty of real-world examples. It allows students to understand complex cost or managerial accounting concepts through practical applications.
  6. End-Of-Chapter Problems: Each chapter has many additional questions. These questions range from simple to more complex end-of-chapter questions and help further drive home the concepts.  
  7. Global Perspective: Hongren, right from his early days, has addressed both U.S. and international accounting practices. So Cost Accounting: A Managerial Emphasis by Horngren, Datar, and Rajan has been translated into multiple languages and includes international case studies and examples, making it relevant for a global audience.
  8. Comprehensive Support Materials: The textbook Cost Accounting: A Managerial Emphasis by Horngren, Datar, and Rajan comes with extensive supporting resources for both instructors and students, including solution manuals, test banks, presentation slides, and online learning tools, including Quizlets and Channels currently.

Order of Topics in Cost Accounting: A Managerial Emphasis

The 800-plus page textbook Cost Accounting: A Managerial Emphasis by Charles T. Horngren, Srikant M. Datar, and Madhav V. Rajan is comprehensive in terms of the width of topics covered.

Introduction to Cost Accounting

The first few chapters cover the introductory cost and management accounting concepts usually covered in an introductory managerial accounting course. These include:

The first chapter of the cost accounting textbook titled ‘The Manager and Management Accounting’ introduces how and why managers should use accounting information for decision-making and management control purposes. It also explains the fundamental differences between financial and management accounting. The second chapter, ‘An Introduction to Cost Terms and Purposes’, defines key cost accounting concepts like direct/indirect costs, fixed/variable costs, and period/product costs, important understanding and applying management or cost accounting.

Basic Managerial Accounting Concepts: Part 2 of Cost Accounting: A Managerial Emphasis

The third chapter of the Cost Accounting: A Managerial Emphasis textbook by Horngren, Datar, and Rajan introduces the first stand-alone concept Cost–Volume–Profit Analysis, where students explore the relationship between changes in activity level and changes in total costs and profits from a break-even point and target profit perspective. In the fourth chapter, authors Horngren, Datar, and Rajan introduce Job Costing, which explains how to track costs for specific jobs or projects and is especially relevant to manufacturing or service environments where each job is unique. The fifth chapter of the Cost Accounting textbook introduces the critical concepts of Activity-Based Costing and Activity-Based Management. This method allocates overhead costs based on activities that drive costs, leading to more accurate cost information.

The following three chapters of the Cost Accounting: A Managerial Emphasis textbook by Horngren, Datar, and Rajan introduces budgeting and variance analysis. Students are introduced to the budgeting process and taught how organizations allocate, manage, and control managers or departments using flexible budgets, direct-cost variances, etc. Here, students learn flexible budgeting, overhead cost allocation, and overhead cost variances. A key lesson point is analyzing and controlling overhead cost variances through flexible budgeting techniques.

Additional Topics: Part 3 of Cost Accounting: A Managerial Emphasis

If there is time in the semester, professor add more topics from the later chapters of the Cost Accounting textbook series by Horngren, Datar, and Rajan.

Chapter 9 of the Cost Accounting: A Managerial Emphasis textbook deals with Inventory Costing and Capacity Analysis. Here students examines different methods of valuing inventory and analyzing how capacity utilization affects costs. In Chapter 10, authors Horngren, Datar, and Rajan introduce tools for analyzing and predicting cost behavior patterns and statistical techniques for cost estimation.

Chapter 10 and Chapter 11 of the Cost Accounting textbook series by Horngren, Datar, and Rajan deal with data analytics and decision making, which include relevant costs, sunk costs, etc.

Chapter 12 introduces Balanced Scorecard and Strategic Profitability Analysis, where students link accounting measures to strategic objectives through balanced scorecard implementation and strategic analysis.

Advanced Topics: Part 4 of The Cost Accounting textbook by Horngren, Datar, and Rajan

The last part of the textbook, Cost Accounting: A Managerial Emphasis by Horngren, Datar, and Rajan, deals with advanced topics in managerial accounting. Chapter 13 shows how important cost accounting is for Pricing Decisions and Cost Management in an organization.

Chapters 14 to 18 go deeper into cost allocation, profitability analysis, and variance analysis, including and explaining methods for fairly distributing shared costs across departments or products. The chapter ‘Cost Allocation: Joint Products and Byproducts’ specifically shows students how to allocate costs when multiple products are produced from the same production process, and another chapter, ‘Process Costing’, teaches students how to allocate costs in continuous production environments where identical units are produced.

Chapter 19 of the textbook Cost Accounting: A Managerial Emphasis by Horngren, Datar, and Rajan, titled ‘Spoilage, Rework, and Scrap,’ deals with accounting for quality issues and waste in production processes. Chapter 20 of the Cost Accounting textbook by Horngren, Datar, and Rajan goes further into the Balanced Scorecard: Quality and Time Management. The authors Horngren, Datar, and Rajan, in Chapter 21, titled ‘Inventory Management, Just-in-Time, and Simplified Costing Methods’, introduce modern inventory management techniques and their impact on costing systems.

Chapter 22 introduces Capital Budgeting and Cost Analysis, and Chapter 23 introduces management control systems, transfer pricing, and other issues a multinational company may have to deal with.

What are Channels for Cost Accounting: A Managerial Emphasis by Horngren, Datar, and Rajan

The textbook Cost Accounting: A Managerial Emphasis by Charles T. Horngren, Srikant M. Datar, and Madhav V. Rajan is published by Pearson, and so has used technology developments to aid in teaching over the years, first with online quizzes and now with additional video material. Channels is a subscription service in Pearson+ that provides video explanations, solutions, and practice problems to help students with homework and exam prep. Videos are personalized for each course. Today, Channels also has interactive AI‑powered summaries and an online community to help students. You can currently sign up for a 1‑month, 3‑month, or 12‑month term (note that these terms can change as they develop, so please check with the official website for more details).

Development of the Textbook Cost Accounting: A Managerial Emphasis by Horngren, Datar, and Rajan

Editions of ‘Cost Accounting: A Managerial Emphasis’ published by Charles T. Horngren alone:

  1. The first edition of the textbook Cost Accounting: A Managerial Emphasis published in 1962 introduced cost accounting as a managerial decision-making tool introducing a new perspective on accounting.
  2. The second edition of the cost accounting textbook published in 1967 expanded on cost allocation methods and introduced practical applications of cost accounting on data for business planning and control.
  3. In the third edition, published in 1972, Professor Horngren incorporated performance measurement concepts, including variance analysis in cost accounting.
  4. The fourth edition of Cost Accounting: A Managerial Emphasis was the first edition to be written by Horngren and Foster. This edition was published in 1982, and the authors, Horngren and Foster, added new chapters on budgeting and responsibility accounting.

Editions of ‘Cost Accounting: A Managerial Emphasis’ published by Charles T. Horngren and George Foster

  • This fifth edition, published in 1982, introduced activity-based costing (ABC costing) concepts
  • The sixth edition of the textbook Cost Accounting: A Managerial Emphasis by Horngren and Foster, published in 1987, focussed on strategic cost management and introduced a global perspective on cost structures.
  • This seventh edition, published in 1991, added content on transfer pricing and ethics in cost accounting.
  • The 8th Edition of the textbook Cost Accounting: A Managerial Emphasis by Horngren and Foster, expanded coverage to include environmental cost accounting and sustainability reporting in 1994.

Editions of ‘Cost Accounting: A Managerial Emphasis’ published by Charles T. Horngren, George Foster and Srikant M. Datar:

  • The ninth edition of Cost Accounting: A Managerial Emphasis was the first edition to be written by Horngren, Foster, and Datar. This edition, published in 1997, added chapters on the balanced scorecard approach, expanding cost accounting to broader areas, including strategy.
  • The tenth edition published in 2000 included international accounting standards and provided new global case studies.
  • The eleventh edition, published in 2003, integrated cost accounting with technology such as enterprise resource planning (ERP) systems.
  • The 12th edition published in 2005 added data analytics and real-time reporting advancements in cost management.

Editions of ‘Cost Accounting: A Managerial Emphasis’ published by Charles T. Horngren, Srikant M. Datar, and Madhav V. Rajan:

  • This 13th edition of Cost Accounting: A Managerial Emphasis was published in 2008 and added more content on the role of cost accounting in sustainability and corporate social responsibility.
  • The fourteenth edition of Cost Accounting: A Managerial Emphasis was the first edition to be written by Horngren, Datar, and Rajan. This edition, published in  2008, placed more focus on decision-making under uncertainty and risk management.
  • The fifteenth edition of the textbook Cost Accounting: A Managerial Emphasis, published in 2014, added content on performance measurement,
  • In the 16th edition published in 2017, the authors, Horngren, Datar, and Rajan, introduce a “different costs for different purposes” framework.
  • The 17th edition of the Cost Accounting textbook by Horngren, Datar, and Rajan, published in 2020, features a new chapter on data analytics, big data, and AI in modern cost accounting.

Author Teams of Cost Accounting: A Managerial Emphasis

Like most textbooks that have been published over decades, the managerial accounting textbook Cost Accounting: A Managerial Emphasis by Charles T. Horngren, Srikant M. Datar, and Madhav V. Rajan has had changes in the author team. The early editions were published by Professor Charles T. Horngren alone.

Professor George Foster joined as co-author in 1982 when the textbook Cost Accounting: A Managerial Emphasis was in its fifth edition. From the fifth edition to the eighth edition, the textbook Cost Accounting: A Managerial Emphasis was authored by Charles T. Horngren and Professor George Foster.  Professor Srikant M. Datar joined as co-author in 1997 to write the ninth edition of Cost Accounting: A Managerial Emphasis. From the ninth edition to the twelfth edition, the textbook Cost Accounting: A Managerial Emphasis was authored by Charles T. Horngren and Professor George Foster

Professor Madhav V. Rajan joined as co-author in 2008 to write the thirteenth edition of Cost Accounting: A Managerial Emphasis. Professor George Foster departed from the author team in 2008, so from the thirteenth edition to the seventeenth edition, the textbook Cost Accounting: A Managerial Emphasis was authored by Charles T. Horngren, Srikant M. Datar, and Madhav V. Rajan. Professor Charles T. Horngren has been the lead author and the only one to have been on the author team since 1962!

Author Profiles Horngren, Foster, Datar, and Rajan

Professor Charles T. Horngren

Professor Charles T. Horngren (1926-2011) was the Edmund W. Littlefield Professor of Accounting at Stanford University. He was one of the most influential accounting professors of the 20th century. Professor Charles Horngren revolutionized accounting education by emphasizing managerial decision-making over traditional bookkeeping approaches. Professor Horngren served on the Accounting Principles Board, the Financial Accounting Standards Board Advisory Council, and the Council of the American Institute of Certified Public Accountants. Professor Horngren was also a trustee of the Financial Accounting Foundation, which oversees the Financial Accounting Standards Board and the Government Accounting Standards Board.

Professor Srikant M. Datar

Professor Srikant M. Datar, who joined the Cost Accounting: A Managerial Emphasis author team in 1997, was the Arthur Lowes Dickinson Professor at Harvard and is now the Dean of Harvard Business School. His research and teaching focus on cost management, performance measurement, strategic implementation, leadership development, and ethical decision-making. He has worked extensively with major corporations on cost management systems and strategy implementation, bringing real-world experience to his academic work.

Professor Madhav V. Rajan

Professor Madhav V. Rajan who joined the Cost Accounting: A Managerial Emphasis author team in 2008 was at Stanford’s Graduate School of Business and now is the Dean of the University of Chicago’s Booth School of Business, where he has served since 2017. His research focuses on the economics of cost allocation, performance measurement, and incentive systems.

Professor George Foster

Professor George Foster, who was part of the textbook team from 1982 to 2008 or the 5th through 12th editions, is the Konosuke Matsushita Professor of Management, Emeritus at Stanford University. His research has focused on financial analysis, sports business management, and entrepreneurship.

These authors represent a remarkable combination of academic excellence and practical business understanding, which helps explain why their textbook has been so successful and influential in accounting education. Each brought distinct perspectives and expertise that helped shape both accounting theory and practice, keeping it relevant through the ages.

Other Textbooks Published By Charles T. Horngren, Srikant M. Datar, George Foster and Madhav V. Rajan

Horngren is the author of other accounting books published by Pearson Education: Introduction to Management Accounting, 15th ed. (2011, with Sundem and Stratton); Introduction to Financial Accounting, 10th ed. (2011, with Sundem and Elliott); Accounting, 8th ed. (2010, with Harrison and Bamber); and Financial Accounting, 8th ed. (2010, with Harrison). Horngren is the Consulting Editor for the Charles T. Horngren Series in Accounting

Professor Charles T. Horngren has published many other accounting textbooks, including:

  • “Introduction to Financial Accounting” with Professor Gary Sundem: The textbook Introduction to Financial Accounting is a foundational text introducing students to the basics of financial accounting with an emphasis on decision-making.
  • “Introduction to Management Accounting,” also with Professor Gary Sundem: Introduction to Management Accounting focuses on how accounting information is used for internal decision-making and control.
  • “Accounting” published with Professor Walter Harrison Jr. is a comprehensive introduction to both financial and managerial accounting principles.
  • “Financial Accounting,” written by Walter Harrison Jr., again is focused on financial accounting only but emphasizes the use of accounting information in business decisions.

Professor Srikant M. Datar has published many other accounting textbooks, including:

  • “Managerial Accounting: Making Decisions and Motivating Performance,” written with Professor Madhav Rajan: The cost accounting textbook Managerial Accounting: Making Decisions and Motivating Performance emphasizes decision-making and the role of accounting in motivating and evaluating managerial performance.
  • “Rethinking the MBA: Business Education at a Crossroads,” co-authored with David Garvin and Patrick Cullen:  Rethinking the MBA: Business Education at a Crossroads is a critical examination of business education and proposals for its reformation.
  • “Strategic Cost Management,” written with James Hatch: Strategic Cost Management, is a cost accounting textbook that focuses on using cost information for strategic decision-making and building a competitive advantage.

Professor Madhav V. Rajan has published many other accounting textbooks, including:

  • “The Economics of Cost,” co-authored with Stefan Reichelstein, teaches an analytical approach to cost measurement and allocation.
  • “Introduction to Management Accounting: A User Perspective” is a cost accounting textbook that emphasizes the practical application of management accounting.
  • A chapter in “Performance Measurement and Management Control” deals with advanced topics in management control systems.

Professor George Foster has published many “Financial Statement Analysis” – A comprehensive guide to analyzing financial statements for decision-making and contributed chapters to “Security Analysis” which focuses on the use of accounting information in security analysis and valuation.

Accounting Tutoring for ‘Cost Accounting: A Managerial Emphasis’ by Horngren, Datar, and Rajan And Other Textbooks

Email care@graduatetutor.com or call us or fill out the signup form below to start live one-on-one accounting tutoring for The ‘Cost Accounting: A Managerial Emphasis’ textbook by Horngren, Datar, and Rajan. Other popular textbooks we offer accounting tutoring for include: Financial Accounting – An Introduction to Concepts, Methods and Uses by Stickney & Weil, Financial & Managerial Accounting for Decision Makers , by Hanlon, Magee, Pfeiffer, Dyckman, Hartgraves and Morse, Financial Accounting by Libby Libby Short, or other textbooks published by Charles T. Horngren, Srikant M. Datar, George Foster and Madhav V. Rajan.

Call us if we can assist you with graduate-level tutoring in any other quantitative course you will encounter in a b-school program.

Sign Up Now