Nelson Higher Education

Higher Education

Cornerstones of Cost Management, 4th Edition

  • Don R. Hansen
  • Maryanne M. Mowen
  • ISBN-10: 1305970667
  • ISBN-13: 9781305970663
  • 1120 Pages | Hardcover
  • Previous Editions: 2015, 2013, 2011
  • COPYRIGHT: 2018 Published
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About the Product

Hansen/Mowen’s CORNERSTONES OF COST MANAGEMENT, 4E demonstrates the dynamic nature of cost accounting in today’s changing business environment. The book covers functional-based cost and control, and then activity-based cost systems, giving students the skills to manage any cost management system. Developed using extensive research on student learning behavior, this book presents concepts in a unique format that speaks to how students learn. Cornerstones examples in each chapter emphasize the How, Why, and What-Ifs of basic cost management concepts, while delving into the conceptual nature of each equation or topic. An integrated CengageNOWv2 package reinforces concepts with additional computerized exercises and problems.


  • ADDITIONAL ONLINE EXERCISES REINFORCE THE MOST HEAVILY USED CONCEPTS IN THE TEXT. Meaningful online exercises were developed based on actual faculty input describing the most important problems for student understanding.

  • CPA-TYPE EXERCISES PREPARE YOUR STUDENTS FOR SUCCESS ON THE EXAM. A section at the end of each chapter includes five exercises either taken directly from previous CPA exams or written specifically for this edition by the authors to provide examples of what students may encounter on the exam. These problems specifically prepare your students for a successful future in accounting.

  • "CORNERSTONES EXAMPLES" PROVIDE STEP-BY-STEP COVERAGE OF THE HOW, WHY, AND WHAT-IFS. These unique examples in each chapter help students solve and master basic cost management concepts. This method presents a model to help readers grasp the calculations and more easily complete homework, while also emphasizing why students are completing the calculation. The "What If" feature challenges students to think past the numbers and understand the actual concepts behind the equations.

  • "CORNERSTONES EXERCISES" CORRESPOND WITH SPECIFIC EXAMPLES AND CONCEPTS. Based on extensive research into student learning behavior, the authors have also created specific "Cornerstones Exercises." These exercises at the end of each chapter are structured like the "Cornerstones Examples" in the text and list which "Cornerstone Example" with which they correspond. These questions provide your students with precise guidance and detailed practice before moving on to the more complex questions at the end of the chapter.

  • STUDENT-FRIENDLY ORGANIZATION OF MATERIAL REINFORCES UNDERSTANDING. In addition to end-of-chapter material, such as the "Cornerstones Exercises" and a list of important equations discussed within that chapter, this edition includes a guide to the "Cornerstones Examples" that enables students to quickly reference examples when needed. All exercises and problems in the end of chapter material also list a corresponding learning objective. This assists you in deciding what to assign to your students and helps students understand what skills they should master from each exercise.

  • SERVICE SECTOR FOCUS EMPHASIZES THE IMPORTANCE OF THESE TYPES OF BUSINESSES IN COST MANAGEMENT. The significance of the service sector is recognized in this text through the extensive application of cost management principles to services. The book explains that services are not simply less complicated manufacturing settings but, instead, have their own unique characteristics and challenges.

  • COST MANAGEMENT INFORMATION SYSTEMS APPROACH OFFERS EXTENSIVE FLEXIBLITY. By focusing on ABC or unit-based systems and the implications of implementing those systems separately, the book’s discussion of these specific approaches stands alone. This book’s approach gives you the flexibility to modify the coverage to best meet the needs of your specific course.

  • BUDGETING COVERAGE IS PRESENTED WITH RELATED TOPICS IN A SINGLE CHAPTER. To provide a more integrated discussion, all budgeting and activity-based budgeting topics are covered extensively within one comprehensive chapter.

  • BOOK PROVIDES REAL-WORLD FOCUS TO ENSURE MATERIAL IS RELEVANT. All chapters include numerous references to real companies, such as the Walt Disney Company, McDonald's, RadioShack, and Lands' End, to illustrate each topic clearly for students. These examples ensure your students understand the relevance and real-world application of the concepts discussed.

  • REVIEW PROBLEMS PROVIDE ADDITIONAL PRACTICE. All chapters (except Chapter 1) include extensive review problems with solutions. These problems demonstrate the computational aspects of chapter materials and reinforce students understanding of chapter concepts before they undertake end-of-chapter materials.


“Cornerstone has been around a long time and is a trusted resource.”
— Perry Sellers, Lone Star College System

About the Author

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. 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 also served on the editorial board of The Accounting Review. His outside interests include family, church activities, reading, movies and watching sports.

Maryanne M. Mowen

Maryanne M. Mowen is associate professor of accounting emerita at Oklahoma State University. She received her Ph.D. from Arizona State University. With degrees in economics and history, she brings a unique interdisciplinary perspective to teaching and writing in both cost accounting and management accounting. Her research interests include management accounting, behavioral decision theory, and Sarbanes-Oxley compliance. She also teaches an ethics course about the impact of Sarbanes-Oxley on the accounting profession. Dr. Mowen has published articles in journals such as Decision Science, Journal of Economic Psychology and Journal of Management Accounting Research. She has also served as a consultant to mid-sized and Fortune 100 companies and works with corporate controllers on management accounting issues. Currently, she advises entrepreneurs and nonprofit organizations. Outside the classroom, she enjoys hiking, travelling, reading mysteries and solving crossword puzzles.

Table of Contents

1. Introduction to Cost Management.
2. Basic Cost Management Concepts.
3. Cost Behavior.
4. Activity-Based Costing.
Integrative Exercises.
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.
Integrative Exercises.
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.
Integrative Exercises.
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.
Integrative Exercises.
Check Figures.

New to this edition

  • NEW MATERIAL ON SUSTAINABILITY AND BIG DATA ANALYSIS IS WOVEN INTO EACH CHAPTER. Additional content in this edition relates the topics in each chapter to cost accounting and reinforces their importance to the cost and management accountant.
  • NEW COVERAGE HIGHLIGHTS DURATION-BASED COSTING. This costing methodology generally matches the cost assignments of ABC but provides a significantly simplified approach that requires considerably less data than ABC. It is introduced in the ABC chapter (Ch. 4) and is also used in the chapter on Lean Accounting (Ch. 15).


All supplements have been updated in coordination with the Main title.
Please see Main title page for new to this edition information.

Instructor Supplements

Instructor's Companion Website  (ISBN-10: 1337298166 | ISBN-13: 9781337298162)

Everything you need for your course in one place! This collection of product-specific lecture and class tools is available online via the instructor resource center at You'll be able to access and download materials such as PowerPoint presentations, images, instructor’s manual, videos, and more.

Solutions Manual  (ISBN-10: 1337298158 | ISBN-13: 9781337298155)

Contains fully worked-out solutions to all of the [odd-numbered exercises] in the text, giving students a way to check their answers and ensure that they took the correct steps to arrive at an answer.

Cengage Testing, powered by Cognero® Instant Access  (ISBN-10: 1305970683 | ISBN-13: 9781305970687)

Cengage Learning Testing, powered by Cognero®, is a flexible, online system that allows you to import, edit, and manipulate content from the text's test bank or elsewhere, including your own favorite test questions. Create multiple test versions in an instant and deliver tests from your LMS, your classroom, or wherever you want.

CengageNOWv2, 1 term Instant Access  (ISBN-10: 1305970756 | ISBN-13: 9781305970755)

With its engaging learning and assessment tools, CengageNOWv2 supports the entire student workflow, from motivation to mastery. For you, the instructor, CengageNOWv2 provides control and customization with the opportunity to tailor the learning experience to improve outcomes. This access code entitles you to one non-consecutive course enrollments, which includes the length of the course plus 14 days.

Student Supplements

Solutions Manual  (ISBN-10: 1337298158 | ISBN-13: 9781337298155)

Contains fully worked-out solutions to all of the [odd-numbered exercises] in the text, giving students a way to check their answers and ensure that they took the correct steps to arrive at an answer.

CengageNOWv2, 1 term Instant Access  (ISBN-10: 1305970756 | ISBN-13: 9781305970755)

Have the tools you need to be successful. A variety of tools are available in CengageNOWv2, all combined in one easy-to-use resource designed to improve your grades. Some resources help you prepare for class and succeed on homework, while others show you specific areas where you can work to improve. This access code entitles you to one non-consecutive course enrollments, which includes the length of the course plus 14 days.