Higher Education

Cornerstones of Cost Management, 3rd Edition

  • Don R. Hansen Oklahoma State University
  • Maryanne M. Mowen Oklahoma State University
  • ISBN-10: 1285751787  |  ISBN-13: 9781285751788
  • 1120 Pages
  • © 2015 | Published
  • College Bookstore Wholesale Price = $290.00
  • Newer Edition Available
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Providing the most up-to-date and thorough coverage of cost management topics, Hansen/Mowen's CORNERSTONES OF COST MANAGEMENT provides students with a solid foundation with its unique Cornerstones approach. Adapted from the leading Cost Management text also from Don Hansen and Maryanne Mowen, and created from our research on student learning behavior, this text presents concepts in a step-by-step format. This presentation helps students understand the How, Why, and What Ifs of solving and mastering basic cost management topics, while also getting at the conceptual nature of each equation or topic. Hansen/Mowen's CORNERSTONES OF COST MANAGEMENT demonstrates the dynamic, exciting nature of cost accounting in today's changing business environment. The text first covers functional-based cost and control and then activity-based cost systems, giving students the understanding and skills to manage any cost management system. Cornerstones examples throughout each chapter provide students with step-by-step coverage of the How, Why, and What Ifs of solving and mastering basic cost management concepts, while also getting at the conceptual understanding that students often struggle to grasp. It includes CPA-Type Exercises in each chapter that have been taken directly from past CPA Exams or have been written by the authors to prepare students for their futures in business.

Features and Benefits

  • CPA-Type Exercises: A section in the end of chapter includes five exercises either taken directly from previous CPA Exams or written specifically for this textbook by the authors to provide an example of what students can expect to encounter on the exam, preparing them for a future in accounting.
  • "Cornerstones Examples" throughout each chapter provide students with step-by-step coverage of the How, Why, and What Ifs of solving and mastering basic cost management concepts. This method presents them with a model to help them truly grasp the calculations and therefore more easily complete homework, while also helping them understand why they are doing the calculation. The "What If" feature takes it a step further, challenging students to think past the numbers and understand the true concept behind the equations.
  • Cornerstones Exercises: Based on our research on student learning behavior, the authors have also created specific "Cornerstones Exercises." These exercises in the end of chapter are structured like the "Cornerstones Examples" in the text and list which "Cornerstone Example" they match. These questions allow students to have some guidance and practice before moving on to the more complex questions in the end of chapter.
  • CPA-Type Exercises: This section in the end of chapter includes five exercises either taken directly from previous CPA Exams or written specifically for this textbook by the authors to provide an example of what students can expect to encounter on the exam, preparing them for a future in accounting.
  • Student-Friendly Organization: In addition to end-of-chapter material such as the "Cornerstones Exercises" and the list of the important equations discussed within that chapter, we have included a guide to the "Cornerstones Examples" and where to find them, allowing students to quickly reference them when needed. All exercises and problems in the end of chapter also reference the learning objective they are addressing, making it easier for you to decide what to assign to your students, and helping your students understand what they should be learning from each exercise.
  • Service Sector Focus: The significance of the service sector is recognized in this text through the extensive application of cost management principles to services. The text explains that services are not simply less complicated manufacturing settings but instead have their own characteristics.
  • Cost Management Information Systems Approach: By focusing on ABC or unit-based systems and the implications of implementing those systems separately, the discussion of these specific approaches stands alone, giving you the flexibility to modify the coverage to best meet the needs of your specific course.
  • Budgeting Coverage: For a more integrated discussion, all budgeting and activity-based budgeting topics are covered extensively within one comprehensive chapter.
  • Real-World Focus: All chapters include numerous references to real companies such as the Walt Disney Company, McDonald's, RadioShack, Lands' End, and many more to help illustrate each topic for students, ensuring your students understand the relevance and real-world application of the concepts discussed.
  • Review Problems: All chapters (except Chapter 1) include review problems and solutions. These problems demonstrate the computational aspects of chapter materials and reinforce the students' understanding of chapter concepts before they undertake end-of-chapter materials.

Table of Contents

1. Introduction to Cost Management.
2. Basic Cost Management Concepts.
3. Cost Behavior.
4. Activity-Based Costing.
5. Product and Service Costing: Job-Order System.
6. Process Costing.
7. Allocating Costs of Support Departments and Joint Products.
8. Budgeting for Planning and Control.
9. Standard Costing: A Functional-Based Control Approach.
10. Decentralization: Responsibility Accounting, Performance.
Evaluation, and Transfer Pricing.
11. Strategic Cost Management.
12. Activity-Based Management.
13. The Balanced Scorecard: Strategic-Based Control.
14. Quality and Environmental Cost Management.
15. Lean Accounting and Productivity Measurement.
16. Cost-Volume-Profit Analysis.
17. Activity Resource Usage Model and Tactical Decision Making.
18. Pricing and Profitability Analysis.
19. Capital Investment.
20. Inventory Management: Economic Order Quantity, JIT, and the Theory of Constraints.
Check Figures.

What's New

  • Additional verification and text improvements have been incorporated throughout. Additional rounding instructions have been added in Chapter 3. In Chapter 5, the feature on Normal and Abnormal Spoilage in a Job-Order Environment has been rewritten for clarity. In Chapter 16, Multiple-Product Analysis example has been updated and Cornerstones 16.4 has been revised.
  • Significant changes with this edition occur in the CengageNOW™ online homework platform.
  • NEW: Cost Accounting Bootcamp--a refresher on key managerial accounting concepts.
  • NEW: Blueprint Problems--problems that walk-through concepts in step format.
  • NEW: Analyzing Relationship Problems--allow students to manipulate data to understand relationships.
  • NEW: Integrative Problems--incorporate concepts from multiple chapters to test the student's ability to build on prior knowledge to develop critical decision-making and analytical skills.
  • NEW: MindTap READER eBook, which is more than a digital version of the textbook. It is an interactive learning resource that was built from the ground up to create a digital reading experience based on how students assimilate information in an online environment. MindTap Reader eBook allows learners to make notes, highlight text, and even find definitions right from the page.

Alternate Formats

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  • Loose Leaf Version

    ISBN-10: 1285779401  | ISBN-13: 9781285779409

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  • CengageNOW 2 Terms (12 Months) + Bound Book

    ISBN-10:  1305425340 | ISBN-13:  9781305425347

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Learning Resource Bundles

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ePack: Text + CengageNOW Instant Access

ISBN-10: 1305425340 | ISBN-13: 9781305425347

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This Bundle Includes:

  • Cornerstones of Cost Management
    List Price = $385.95  | CengageBrain Price = $385.95  | College Bookstore Wholesale Price = $290.00
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Efficacy and Outcomes


"I believe this [Integrative Exercises] is both an innovative and a great idea by Cengage for this particular course."

— Dr. Ronald F. Premuroso, The University of Montana

"I applaud the strategy of including comprehensive, integrative problems to be used with the text."

— Kenneth P. Sinclair, Lehigh University


All supplements have been updated in coordination with the main title. Select the main title's "About" tab, then select "What's New" for updates specific to title's edition.

For more information about these supplements, or to obtain them, contact your Learning Consultant.

Instructor Supplements

Solutions Manual  (ISBN-10: 1285852214 | ISBN-13: 9781285852218)

CengageNOW Instant Access  (ISBN-10: 1285779355 | ISBN-13: 9781285779355)

CengageNOW™ is a powerful course management and online homework tool that provides robust instructor control and customization to optimize the learning experience and meet desired outcomes. CengageNOW™ features Author-Written Homework from the Textbook, Integrated eBook, Personalized Study Plans, Assessment Options, and Course Management Tools, including Gradebook. CengageNOW™ is compatible with both WebCT® and Blackboard® platforms and is ideal for both traditional lecture-based courses and distance learning.

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Student Supplements

LMS Integrated for CengageNOW™, 2 terms Instant Access  (ISBN-10: 1305089952 | ISBN-13: 9781305089952)

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CengageNOW Instant Access  (ISBN-10: 1285779355 | ISBN-13: 9781285779355)

CengageNOW™ is an easy-to-use online resource that helps you study in less time to get the grade you want. CengageNOW™ allows you to test new concepts through pre- and post-tests. Personalized study plans target the areas on which you need to focus.

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Meet the Author

Author Bio

Don R. Hansen

Dr. Don R. Hansen is Professor Emeritus of Oklahoma State University. He has an undergraduate degree in mathematics from Brigham Young University. He received his Ph.D. from the University of Arizona in 1977. Dr. Hansen has published articles in both accounting and engineering journals, including The Accounting Review, The Journal of Management Accounting Research, Accounting Organizations and Society, Accounting Horizons, and IIE Transactions. He has served on the editorial board of The Accounting Review. His outside interests include family, church activities, reading, movies, and watching sports.

Maryanne M. Mowen

Dr. Maryanne M. Mowen is Associate Professor Emerita of Accounting at Oklahoma State University. She currently teaches online classes in cost and management accounting for Oklahoma State University. She received her Ph.D. from Arizona State University. Dr. Mowen brings a unique interdisciplinary perspective to teaching and writing in cost and management accounting, with degrees in history and economics. She has taught classes in ethics and the impact of the Sarbanes-Oxley Act on accountants. Her scholarly research focuses on areas of management accounting, behavioral decision theory, and compliance with the Sarbanes-Oxley Act. She has published articles in journals, such as Decision Science, The Journal of Economics and Psychology, and The Journal of Management Accounting Research. Dr. Mowen has served as a consultant to mid-sized and Fortune 100 companies and works with corporate controllers on management accounting issues. She is a member of the Northern New Mexico chapter of SCORE and serves as a counselor, assisting small and start-up businesses. Outside the classroom, she enjoys hiking, traveling, reading mysteries, and working crossword puzzles.

Online Solutions

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