Solution Manual m
ManagerialAccounting m
by ffiЫfifiisΘfi NΘfiΘΘfi
Uploaded by m
Mudassar Hassan m
University of Sargodha
m m
,Chapter 1 m
Managerial Accounting and the Business Envir
m m m m m
onment
SolutionsmtomQuestions
m turnmreducesmthemlevelmofminventories.mSecond,mre
1-1 Managerialmaccountingmismconcernedmwith
-
mprovidingminformationmtommanagers mfor muse mwithi
mducedmsetupmtimemallowsmamcompany mtomspendmm
nmthemorganization.mFinancialmaccountingmismcon-
oremtimemproducingmgoodsmandmlessmtimemgettingmr
mcernedmwithmprovidingminformationmtomstockholder
eady mtomproduce.mThird,mthemability mtomrapidly mcha
s,mcreditors,mandmothersmoutsidemofmthemorganizati
on. nge
1-2 Essentially,mmanagersmcarry moutmthreemma
-
mjor mactivities minmanmorganization: mplanning,mdirecti
ngmandmmotivating,mandmcontrolling.mAllmthreemacti
vitiesminvolvemdecisionmmaking.
1-3 ThemPlanningmandmControlmCycleminvolves
mformulatingmplans,mimplementingmplans,mmeasuri
ngmperformance,mandmevaluatingmdifferencesmbet
weenmplannedmandmactualmperformance.
1-4 Amlinempositionmismdirectly mrelatedmtomthema
chievementmofmthembasicmobjectivesmofmthemorgani-
mzation.mA mstaffmpositionmismnotmdirectly mrelatedmtom
themachievementmofmthosemobjectives; mrather,mitmis
msup-
mportive,mprovidingmservices mandmassistance mtomoth
ermpartsmofmthemorganization.
1-5 Inmcontrastmtomfinancialmaccounting,mmana
-
mgerialmaccounting: m(1)mfocuses monmthem needs mofmt
hemmanager; m(2)mplacesmmorememphasismonmthemfu
ture;
(3)memphasizes mrelevancemandmflexibility,mrather mt
hanmprecision; m(4)memphasizesmthemsegmentsmofma
nmorganization; m(5)mismnotmgovernedmby mGAAP; man
d
(6)mismnotmmandatory.
1-6 Amnumber mofmbenefitsmaccruemfrommreduce
dmsetupmtime.mFirst,mreducedmsetupmtimemallowsmam
company mtomproduceminmsmaller mbatches,mwhichmin
©mThemMcGraw-
SolutionsmManual,mChapter m HillmCompanies,mInc.,m2006.
1 1
,frommmakingmonemproductmtommakingmanother mal-
mlows mthemcompany mtomrespondmmore mquickly mtomc
us-
mtomers.mFinally,msmaller mbatches mmake mitmeasier m
tomspotmmanufacturingmproblemsmbeforemthey mres
ultminmamlargemnumber mofmdefectivemunits.
1-7 ThemmainmbenefitsmofmamsuccessfulmJIT msy
s-
mtemmare mreductions min: m(1)mfunds mtiedmupminminv
en-
mtories; m(2)mspace mrequirements; m(3)mthroughputm
time; mandm(4)mdefects.
1-8 TQMmgenerally mapproachesmimprovement
minmamseries mofmsmallmsteps mthatmaremplannedmandm
im-mplementedmby mteamsmofmfront-
linemworkers.mProcessmReengineeringminvolvesmco
mpletely mredesigningmbusinessmprocessesmfrommth
emgroundmup—
oftenmwithmthemusemofmoutsidemconsultants.
1-9 IfmProcessmReengineeringmismsuccessful,
mfewer mworkers mare mneeded.mIfmmanagementmr
e-
msponds mby mlayingmoffmworkers, mmorale mwillmalm
ostmcertainmsuffer.
1-10 Somembenefitsmfrommimprovementmeffort
smcomemfrommcostmreductions,mbutmthemprimary mb
ene-mfitmismoftenmanmincreaseminmcapacity.mAtmnon-
con-
mstraints,mincreases minmcapacity mjustmaddmtomthema
l-mready-existingmexcessmcapacity.mTherefore,mim-
mprovementmefforts mshouldmordinarily mfocus monmth
emconstraint.
1-11 Ifmpeoplemgenerally mdidmnotmactmethically mi
nmbusiness,mnomonemwouldmtrustmanyonemelsemand
mpeople mwouldmbemreluctantmtomenter mintombusines
smtransactions.mThemresultmwouldmbemlessmfundsmrai
sedminmcapitalmmarkets,mfewer mgoodsmandmservices
mavail-
mable mfor msale,mlower mquality,mandmhigher mprices.
©mThemMcGraw-
HillmCompanies,mInc.,m2006.mAllmrightsmreserved. ManagerialmAccounting,m11thmEditio
2 n
, Exercise 1-1
1-2 (10 minutes)
m minutes)
m m
1. Line
2. Directing and motivating
m m
3. Budgets
4. Planning
5. Staff
6. Decentralization
7. Precision; Nonmonetary data
m m
8. Managerial accounting; Financial accounting
m m m
9. Feedback
10. Controller
11. Performance report m
12. Chief Financial Officer
m m
©mThemMcGraw-
SolutionsmManual,mChapter m HillmCompanies,mInc.,m2006.
1 1
ManagerialAccounting m
by ffiЫfifiisΘfi NΘfiΘΘfi
Uploaded by m
Mudassar Hassan m
University of Sargodha
m m
,Chapter 1 m
Managerial Accounting and the Business Envir
m m m m m
onment
SolutionsmtomQuestions
m turnmreducesmthemlevelmofminventories.mSecond,mre
1-1 Managerialmaccountingmismconcernedmwith
-
mprovidingminformationmtommanagers mfor muse mwithi
mducedmsetupmtimemallowsmamcompany mtomspendmm
nmthemorganization.mFinancialmaccountingmismcon-
oremtimemproducingmgoodsmandmlessmtimemgettingmr
mcernedmwithmprovidingminformationmtomstockholder
eady mtomproduce.mThird,mthemability mtomrapidly mcha
s,mcreditors,mandmothersmoutsidemofmthemorganizati
on. nge
1-2 Essentially,mmanagersmcarry moutmthreemma
-
mjor mactivities minmanmorganization: mplanning,mdirecti
ngmandmmotivating,mandmcontrolling.mAllmthreemacti
vitiesminvolvemdecisionmmaking.
1-3 ThemPlanningmandmControlmCycleminvolves
mformulatingmplans,mimplementingmplans,mmeasuri
ngmperformance,mandmevaluatingmdifferencesmbet
weenmplannedmandmactualmperformance.
1-4 Amlinempositionmismdirectly mrelatedmtomthema
chievementmofmthembasicmobjectivesmofmthemorgani-
mzation.mA mstaffmpositionmismnotmdirectly mrelatedmtom
themachievementmofmthosemobjectives; mrather,mitmis
msup-
mportive,mprovidingmservices mandmassistance mtomoth
ermpartsmofmthemorganization.
1-5 Inmcontrastmtomfinancialmaccounting,mmana
-
mgerialmaccounting: m(1)mfocuses monmthem needs mofmt
hemmanager; m(2)mplacesmmorememphasismonmthemfu
ture;
(3)memphasizes mrelevancemandmflexibility,mrather mt
hanmprecision; m(4)memphasizesmthemsegmentsmofma
nmorganization; m(5)mismnotmgovernedmby mGAAP; man
d
(6)mismnotmmandatory.
1-6 Amnumber mofmbenefitsmaccruemfrommreduce
dmsetupmtime.mFirst,mreducedmsetupmtimemallowsmam
company mtomproduceminmsmaller mbatches,mwhichmin
©mThemMcGraw-
SolutionsmManual,mChapter m HillmCompanies,mInc.,m2006.
1 1
,frommmakingmonemproductmtommakingmanother mal-
mlows mthemcompany mtomrespondmmore mquickly mtomc
us-
mtomers.mFinally,msmaller mbatches mmake mitmeasier m
tomspotmmanufacturingmproblemsmbeforemthey mres
ultminmamlargemnumber mofmdefectivemunits.
1-7 ThemmainmbenefitsmofmamsuccessfulmJIT msy
s-
mtemmare mreductions min: m(1)mfunds mtiedmupminminv
en-
mtories; m(2)mspace mrequirements; m(3)mthroughputm
time; mandm(4)mdefects.
1-8 TQMmgenerally mapproachesmimprovement
minmamseries mofmsmallmsteps mthatmaremplannedmandm
im-mplementedmby mteamsmofmfront-
linemworkers.mProcessmReengineeringminvolvesmco
mpletely mredesigningmbusinessmprocessesmfrommth
emgroundmup—
oftenmwithmthemusemofmoutsidemconsultants.
1-9 IfmProcessmReengineeringmismsuccessful,
mfewer mworkers mare mneeded.mIfmmanagementmr
e-
msponds mby mlayingmoffmworkers, mmorale mwillmalm
ostmcertainmsuffer.
1-10 Somembenefitsmfrommimprovementmeffort
smcomemfrommcostmreductions,mbutmthemprimary mb
ene-mfitmismoftenmanmincreaseminmcapacity.mAtmnon-
con-
mstraints,mincreases minmcapacity mjustmaddmtomthema
l-mready-existingmexcessmcapacity.mTherefore,mim-
mprovementmefforts mshouldmordinarily mfocus monmth
emconstraint.
1-11 Ifmpeoplemgenerally mdidmnotmactmethically mi
nmbusiness,mnomonemwouldmtrustmanyonemelsemand
mpeople mwouldmbemreluctantmtomenter mintombusines
smtransactions.mThemresultmwouldmbemlessmfundsmrai
sedminmcapitalmmarkets,mfewer mgoodsmandmservices
mavail-
mable mfor msale,mlower mquality,mandmhigher mprices.
©mThemMcGraw-
HillmCompanies,mInc.,m2006.mAllmrightsmreserved. ManagerialmAccounting,m11thmEditio
2 n
, Exercise 1-1
1-2 (10 minutes)
m minutes)
m m
1. Line
2. Directing and motivating
m m
3. Budgets
4. Planning
5. Staff
6. Decentralization
7. Precision; Nonmonetary data
m m
8. Managerial accounting; Financial accounting
m m m
9. Feedback
10. Controller
11. Performance report m
12. Chief Financial Officer
m m
©mThemMcGraw-
SolutionsmManual,mChapter m HillmCompanies,mInc.,m2006.
1 1
