,
,
,
,
,
, Managerial 10e – Chapter 1 – Solutions Manual
15. JIT inventory system is a reengineering principle where inventory
is made available for customer consumption at the time of
customer demand. A JIT inventory system is designed to
eliminate the storage of large amounts of inventory. By
eliminating the storage of inventory, costs related to inventory
such as financing, warehouse space, security and maintenance,
theft, damage and obsolescence can be reduced or eliminated.
16. Reengineering is the term used to explain companies’ responses
to world-wide competition by changing production and delivery
systems so as to eliminate waste, reduce errors, and minimize
costs. Some of the best practices used by world-class
competitors include activity-based management, value-added
activities, and just-in-time inventory acquisition.
17. In traditional costing systems, indirect costs are assigned to
products, services, or customers using some allocation base
measured in volume such as direct labor hours. In activity-based
costing a different allocation system is used to improve the
accuracy of allocations. With activity-based costing, indirect
costs are first assigned to organizational activities and then to
products, services, or customers based on their use of that
activity. There is usually a two-level allocation process and more
than one allocation base may be used.
18. A value chain is the sequence of activities through which an
organization provides products to its customers.
1-b-6
© McGraw Hill LLC. All rights reserved. No reproduction or distribution without the prior written consent of McGraw Hill LLC.
, Managerial 10e – Chapter 1 – Solutions Manual
19. A value-added activity is any unit of work that contributes to a
product’s ability to satisfy customer needs. Value-added activities
include the following:
(1) Input activities - research and development, product design,
and hiring and training.
(2) Processing activities - assembly, inspection, and storing.
(3) Output activities - marketing, distribution, and customer
relations.
(4) Administrative activities - accounting and legal services,
personnel management, and public relations.
Nonvalue-added activities are tasks undertaken that do not
contribute to a product’s ability to satisfy customer needs.
Examples would include the following:
(1) Maintaining excess quantities of inventories.
(2) Transporting materials and products during production
and storage stages.
(3) Machine set-ups.
1-b-7
© McGraw Hill LLC. All rights reserved. No reproduction or distribution without the prior written consent of McGraw Hill LLC.
, Managerial 10e – Chapter 1 – Solutions Manual
SOLUTIONS TO EXERCISES - SERIES A - CHAPTER 1
EXERCISE 1-1A
Managerial Accounting Financial Accounting
a. X
b. X
c. X
d. X
e. X
f. X
g. X
h. X
i. X
j. X
1-b-8
© McGraw Hill LLC. All rights reserved. No reproduction or distribution without the prior written consent of McGraw Hill LLC.
, Managerial 10e – Chapter 1 – Solutions Manual
EXERCISE 1-2A
Selling, General, and
Product Cost Administrative Cost
a. X
b. X
c. X
d. X
e. X
f. X
g. X
h. X
i. X
j. X
1-b-9
© McGraw Hill LLC. All rights reserved. No reproduction or distribution without the prior written consent of McGraw Hill LLC.
,
,
,
,
, Managerial 10e – Chapter 1 – Solutions Manual
15. JIT inventory system is a reengineering principle where inventory
is made available for customer consumption at the time of
customer demand. A JIT inventory system is designed to
eliminate the storage of large amounts of inventory. By
eliminating the storage of inventory, costs related to inventory
such as financing, warehouse space, security and maintenance,
theft, damage and obsolescence can be reduced or eliminated.
16. Reengineering is the term used to explain companies’ responses
to world-wide competition by changing production and delivery
systems so as to eliminate waste, reduce errors, and minimize
costs. Some of the best practices used by world-class
competitors include activity-based management, value-added
activities, and just-in-time inventory acquisition.
17. In traditional costing systems, indirect costs are assigned to
products, services, or customers using some allocation base
measured in volume such as direct labor hours. In activity-based
costing a different allocation system is used to improve the
accuracy of allocations. With activity-based costing, indirect
costs are first assigned to organizational activities and then to
products, services, or customers based on their use of that
activity. There is usually a two-level allocation process and more
than one allocation base may be used.
18. A value chain is the sequence of activities through which an
organization provides products to its customers.
1-b-6
© McGraw Hill LLC. All rights reserved. No reproduction or distribution without the prior written consent of McGraw Hill LLC.
, Managerial 10e – Chapter 1 – Solutions Manual
19. A value-added activity is any unit of work that contributes to a
product’s ability to satisfy customer needs. Value-added activities
include the following:
(1) Input activities - research and development, product design,
and hiring and training.
(2) Processing activities - assembly, inspection, and storing.
(3) Output activities - marketing, distribution, and customer
relations.
(4) Administrative activities - accounting and legal services,
personnel management, and public relations.
Nonvalue-added activities are tasks undertaken that do not
contribute to a product’s ability to satisfy customer needs.
Examples would include the following:
(1) Maintaining excess quantities of inventories.
(2) Transporting materials and products during production
and storage stages.
(3) Machine set-ups.
1-b-7
© McGraw Hill LLC. All rights reserved. No reproduction or distribution without the prior written consent of McGraw Hill LLC.
, Managerial 10e – Chapter 1 – Solutions Manual
SOLUTIONS TO EXERCISES - SERIES A - CHAPTER 1
EXERCISE 1-1A
Managerial Accounting Financial Accounting
a. X
b. X
c. X
d. X
e. X
f. X
g. X
h. X
i. X
j. X
1-b-8
© McGraw Hill LLC. All rights reserved. No reproduction or distribution without the prior written consent of McGraw Hill LLC.
, Managerial 10e – Chapter 1 – Solutions Manual
EXERCISE 1-2A
Selling, General, and
Product Cost Administrative Cost
a. X
b. X
c. X
d. X
e. X
f. X
g. X
h. X
i. X
j. X
1-b-9
© McGraw Hill LLC. All rights reserved. No reproduction or distribution without the prior written consent of McGraw Hill LLC.
