SOLUTION MANUAL
Horngren's Accounting, The Managerial Chapters, 14th Edition
By Tracie Miller-Nobles Brenda Mattison, All Chapters 1 - 9
,Table of contents
d d
1. Introduction to Managerial Accounting
d d d
2. Job Order Costing
d d
3. Process Costingd
4. Cost-Volume-Profit Analysis d
5. Master Budgets
d
6. Flexible Budgets and Standard Cost Systems
d d d d d
7. Cost Allocation and Responsibility Accounting
d d d d
8. Short-Term Business Decisions
d d
9. Capital Investment Decisions
d d
,Chapter M:1 d
Introduction to Managerial Accounting
d d d
Review Questions
d
1. Whatdisdthedprimarydpurposedofdmanagerialdaccounting?
Thedprimarydpurposedofdmanagerialdaccountingdisdtodprovidedinformationdtodhelpdmanagersdplan,ddir
ect,dcontrol,danddmakeddecisions.
2. Listdsixddifferencesdbetweendfinancialdaccountingdanddmanagerialdaccounting.
Financialdaccountingdanddmanagerialdaccountingddifferdondthedfollowingd6ddimensions:d(1)dprimarydusers
,d(2)dpurposedofdinformation,d(3)dfocusdanddtimeddimensiondofdthedinformation,d(4)drulesdanddre-
dstrictions,d(5)dscopedofdinformation,dandd(6)dbehavioral.
3. Explaindtheddifferencedbetweendlinedpositionsdanddstaffdpositions.
Linedpositionsdareddirectlydinvolveddindprovidingdgoodsdordservicesdtodcustomers.dStaffdpositionsdsup
portdlinedpositions.
4. Explaindtheddifferencesdbetweendplanning,ddirecting,danddcontrolling.
Planningdmeansdchoosingdgoalsdandddecidingdhowdtodachievedthem.dDirectingdinvolvesdrunningdthedday-
to-
daydoperationsdofdadbusiness.dControllingdisdthedprocessdofdmonitoringdoperationsdanddkeepingdthedcomp
anydondtrack.
5. ListdthedfourdIMAdstandardsdofdethicaldpracticedanddbrieflyddescribedeach.
ThedfourdIMAdstandardsdofdethicaldpracticedanddaddescriptiondofdeachdfollow.
I. Competence.
Maintaindandappropriatedleveldofdprofessionaldleadershipdanddexpertisedbydenhancingdkn
owledgedanddskills.
Performdprofessionalddutiesdindaccordancedwithdrelevantdlaws,dregulations,danddtechnicaldsta
ndards.
Provideddecisiondsupportdinformationdanddrecommendationsdthatdaredaccurate,dclear,dconcise,
, anddtimely.
Recognisedanddhelpdmangedrisk.
II. Confidentiality.
Keepdinformationdconfidentialdexceptdwhenddisclosuredisdauthorizeddordlegallydrequired.
Informdalldrelevantdpartiesdregardingdappropriatedusedofdconfidentialdinformation.d Monitordtoden
suredcompliance.
Refraindfromdusingdconfidentialdinformationdfordunethicaldordillegaldadvantage.
III. Integrity.
Mitigatedactualdconflictsdofdinterest.dRegularlydcommunicatedwithdbusinessdassociatesdtodavoiddapp
arentdconflictsdofdinterest.ddAdvisedalldpartiesdofdanydpotentialdconflicts.
Refraindfromdengagingdindanydconductdthatdwoulddprejudicedcarryingdoutddutiesdethically.
Abstaindfromdengagingdindordsupportingdanydactivitydthatdmightddiscreditdthedprofession.
Contributedtodadpositivedethicaldculturedanddplacedintegritydofdthedprofessiondabovedpersonaldint
erest.
5,dcont.
IV. Credibility.
Communicatedinformationdfairlydanddobjectively.
Providedalldrelevantdinformationdthatdcoulddreasonablydbedexpecteddtodinfluencedandintendeddus
er’sdunderstandingdofdthedreports,danalyses,dordrecommendations.
Reportdanyddelaysdorddeficienciesdindinformation,dtimeliness,dprocessing,dordinternaldcontrolsdindc
onformancedwithdorganizationdpolicydand/ordapplicabledlaw.
Communicatedanydprofessionaldlimitationsdordotherdconstraintsdthatdwoulddprecludedresponsi-
dbledjudgmentdordsuccessfuldperformancedofdandactivity.
6. Describedadservicedcompanydanddgivedandexample.
Servicedcompaniesdselldtime,dskills,danddknowledge.dExamplesdofdservicedcompaniesdincludedphonedservi
cedcompanies,dbanks,dcleaningdservicedcompanies,daccountingdfirms,dlawdfirms,dmedicaldphysi-
dcians,danddonlinedauctiondservices.
7. Describedadmerchandisingdcompanydanddgivedandexample.
Merchandisingdcompaniesdreselldproductsdtheydbuydfromdsuppliers.dMerchandisersdkeepdandinventorydofdp
roducts,danddmanagersdaredaccountabledfordthedpurchasing,dstorage,danddsaledofdthedproducts.dEx-
damplesdofdmerchandisingdcompaniesdincludedtoydstores,dgrocerydstores,danddclothingdstores.
8. Howddodmanufacturingdcompaniesddifferdfromdmerchandisingdcompanies?
Merchandisingdcompaniesdreselldproductsdtheydpreviouslydboughtdfromdsuppliers,dwhereasdmanufac-
dturingdcompaniesdusedlabor,dequipment,dsupplies,danddfacilitiesdtodconvertdrawdmaterialsdintodnewdfin-
disheddproducts.dIndcontrastdtodmerchandisingdcompanies,dmanufacturingdcompaniesdhavedadbroaddranged
ofdproductiondactivitiesdthatdrequiredtrackingdcostsdondthreedkindsdofdinventory.
Horngren's Accounting, The Managerial Chapters, 14th Edition
By Tracie Miller-Nobles Brenda Mattison, All Chapters 1 - 9
,Table of contents
d d
1. Introduction to Managerial Accounting
d d d
2. Job Order Costing
d d
3. Process Costingd
4. Cost-Volume-Profit Analysis d
5. Master Budgets
d
6. Flexible Budgets and Standard Cost Systems
d d d d d
7. Cost Allocation and Responsibility Accounting
d d d d
8. Short-Term Business Decisions
d d
9. Capital Investment Decisions
d d
,Chapter M:1 d
Introduction to Managerial Accounting
d d d
Review Questions
d
1. Whatdisdthedprimarydpurposedofdmanagerialdaccounting?
Thedprimarydpurposedofdmanagerialdaccountingdisdtodprovidedinformationdtodhelpdmanagersdplan,ddir
ect,dcontrol,danddmakeddecisions.
2. Listdsixddifferencesdbetweendfinancialdaccountingdanddmanagerialdaccounting.
Financialdaccountingdanddmanagerialdaccountingddifferdondthedfollowingd6ddimensions:d(1)dprimarydusers
,d(2)dpurposedofdinformation,d(3)dfocusdanddtimeddimensiondofdthedinformation,d(4)drulesdanddre-
dstrictions,d(5)dscopedofdinformation,dandd(6)dbehavioral.
3. Explaindtheddifferencedbetweendlinedpositionsdanddstaffdpositions.
Linedpositionsdareddirectlydinvolveddindprovidingdgoodsdordservicesdtodcustomers.dStaffdpositionsdsup
portdlinedpositions.
4. Explaindtheddifferencesdbetweendplanning,ddirecting,danddcontrolling.
Planningdmeansdchoosingdgoalsdandddecidingdhowdtodachievedthem.dDirectingdinvolvesdrunningdthedday-
to-
daydoperationsdofdadbusiness.dControllingdisdthedprocessdofdmonitoringdoperationsdanddkeepingdthedcomp
anydondtrack.
5. ListdthedfourdIMAdstandardsdofdethicaldpracticedanddbrieflyddescribedeach.
ThedfourdIMAdstandardsdofdethicaldpracticedanddaddescriptiondofdeachdfollow.
I. Competence.
Maintaindandappropriatedleveldofdprofessionaldleadershipdanddexpertisedbydenhancingdkn
owledgedanddskills.
Performdprofessionalddutiesdindaccordancedwithdrelevantdlaws,dregulations,danddtechnicaldsta
ndards.
Provideddecisiondsupportdinformationdanddrecommendationsdthatdaredaccurate,dclear,dconcise,
, anddtimely.
Recognisedanddhelpdmangedrisk.
II. Confidentiality.
Keepdinformationdconfidentialdexceptdwhenddisclosuredisdauthorizeddordlegallydrequired.
Informdalldrelevantdpartiesdregardingdappropriatedusedofdconfidentialdinformation.d Monitordtoden
suredcompliance.
Refraindfromdusingdconfidentialdinformationdfordunethicaldordillegaldadvantage.
III. Integrity.
Mitigatedactualdconflictsdofdinterest.dRegularlydcommunicatedwithdbusinessdassociatesdtodavoiddapp
arentdconflictsdofdinterest.ddAdvisedalldpartiesdofdanydpotentialdconflicts.
Refraindfromdengagingdindanydconductdthatdwoulddprejudicedcarryingdoutddutiesdethically.
Abstaindfromdengagingdindordsupportingdanydactivitydthatdmightddiscreditdthedprofession.
Contributedtodadpositivedethicaldculturedanddplacedintegritydofdthedprofessiondabovedpersonaldint
erest.
5,dcont.
IV. Credibility.
Communicatedinformationdfairlydanddobjectively.
Providedalldrelevantdinformationdthatdcoulddreasonablydbedexpecteddtodinfluencedandintendeddus
er’sdunderstandingdofdthedreports,danalyses,dordrecommendations.
Reportdanyddelaysdorddeficienciesdindinformation,dtimeliness,dprocessing,dordinternaldcontrolsdindc
onformancedwithdorganizationdpolicydand/ordapplicabledlaw.
Communicatedanydprofessionaldlimitationsdordotherdconstraintsdthatdwoulddprecludedresponsi-
dbledjudgmentdordsuccessfuldperformancedofdandactivity.
6. Describedadservicedcompanydanddgivedandexample.
Servicedcompaniesdselldtime,dskills,danddknowledge.dExamplesdofdservicedcompaniesdincludedphonedservi
cedcompanies,dbanks,dcleaningdservicedcompanies,daccountingdfirms,dlawdfirms,dmedicaldphysi-
dcians,danddonlinedauctiondservices.
7. Describedadmerchandisingdcompanydanddgivedandexample.
Merchandisingdcompaniesdreselldproductsdtheydbuydfromdsuppliers.dMerchandisersdkeepdandinventorydofdp
roducts,danddmanagersdaredaccountabledfordthedpurchasing,dstorage,danddsaledofdthedproducts.dEx-
damplesdofdmerchandisingdcompaniesdincludedtoydstores,dgrocerydstores,danddclothingdstores.
8. Howddodmanufacturingdcompaniesddifferdfromdmerchandisingdcompanies?
Merchandisingdcompaniesdreselldproductsdtheydpreviouslydboughtdfromdsuppliers,dwhereasdmanufac-
dturingdcompaniesdusedlabor,dequipment,dsupplies,danddfacilitiesdtodconvertdrawdmaterialsdintodnewdfin-
disheddproducts.dIndcontrastdtodmerchandisingdcompanies,dmanufacturingdcompaniesdhavedadbroaddranged
ofdproductiondactivitiesdthatdrequiredtrackingdcostsdondthreedkindsdofdinventory.
