Solutions Manual For Cornerstones Of Managerial
Accounting 4th Edition By Canadian Edition By
Maryanne Mowen, Don Hansen, David Mcconomy,
Bradley Witt
4TH EDITION
, CHAPTER 1
INTRODUCTION TO MANAGERIAL ACCOUNTING
DISCUSSION QUESTIONS
,1. Managerial Accounting Is The Provision Of Accounting Information For Internal Users In A Firm.
2. The Three Broad Objectives Of Managerial Accounting Are Planning, Controlling, And Decision Making.
3. The Users Of Managerial Accounting Information Are Generally Managers And Other Employees Of A Firm.
Managerial Accounting Information Is Typically Not Provided To Outsiders But May Be In Selected Cases. For
Example, A Bank May Require Budgeting Information For The Next Few Years Before Agreeing To Grant A Loan.
4. A Managerial Accounting Information System Typically Provides Both Financial And Nonfinancial Information.
For Example, Financial Information On Cost Of Production Is Tracked. Other Information, Such As The Number Of
Warranty Returns, May Also Be Tracked By The Management Information System.
5. Controlling Is Sometimes Called Performance Evaluation. It Involves Comparing The Actual Outcome With The
Expected Outcome To See What Differences, If Any, Exist.
6. Planning Occurs First. It Requires Setting Objectives And Identifying The Means Of Achieving Those Objectives.
Then, The Results Of The Plan Are Compared With The Plan, Which Is Called Controlling. Clearly, It Is Also
Feedback, In That Any Impediments Or Unexpected Occurrences Are Noted. This Feedback Is Then Used To
Develop The Plan For The Next Period.
7. Managerial Accounting Is Internally Focused, Does Not Follow Mandatory Rules, Keeps Track Of Both Financial
And Nonfinancial Information, Emphasizes The Future, And Relies On A Broad Range Of Disciplines. Financial
Accounting Is Externally Focused, Follows Externally Imposed Rules (Such As GAAP), Has An Historical
Orientation, And Provides Information About The Company As A Whole.
8. Huge Improvements In Technology, Transportation, And Communication Over The
, Past 50 Years Have Changed The World Significantly. Managerial Accountants Have Had To Broaden Their
Focus Beyond Simple Financial Reporting To Include The Gathering Of Information On All Types Of Costs And
Of The Value Of The Product Or Service To Customers. These Broader Costs Are Used In Planning And
Decision Making.
9. Customer Value Is The Difference Between What A Customer Pays For A Product Or Service And What The
Customer Receives In Return. The Focus On Customer Value Forces Management Accounting To Look At
Many Types Of Costs, Not Simply Manufacturing Cost. These May Include The Price Of The Good Or Service,
Maintenance Costs, Search Costs, Learning Costs, And Disposal Costs.
10. Today’s Managerial Accountant Must Understand Many Functions Of The Business, From Manufacturing To
Marketing To Distribution To Customer Service, In Order To Provide Appropriate Information For Managing
The Value Chain. Increased International Trade Means That The Managerial Accountant Must Be Familiar Not
Only With Business Practices And Laws In Their Own Country But Also In The Countries With Which Their
Company Trades.
11. Enterprise Risk Management (ERM) Refers To The Formal Process Of Identifying The Factors Or Threats, Both
Internal And External To The Organization, That Might Prevent The Organization From Achieving Its
Strategic Objectives. The Managerial Accountant Plays An Increasingly Important Role In ERM By Providing
Financial And Nonfinancial Measures Of These Threats And Communicating Them To High-Level Executives
(E.G., Chief Risk Officer, Chief Financial Officer, Board Of Directors) In The Organization Who Manage These
Factors.
12. The Value Chain Is The Set Of Activities Required To Design, Develop, Produce, Market, And Deliver Products
And Services To Customers. It Is Important Because It Helps The Company To Understand Its Role In Serving
Accounting 4th Edition By Canadian Edition By
Maryanne Mowen, Don Hansen, David Mcconomy,
Bradley Witt
4TH EDITION
, CHAPTER 1
INTRODUCTION TO MANAGERIAL ACCOUNTING
DISCUSSION QUESTIONS
,1. Managerial Accounting Is The Provision Of Accounting Information For Internal Users In A Firm.
2. The Three Broad Objectives Of Managerial Accounting Are Planning, Controlling, And Decision Making.
3. The Users Of Managerial Accounting Information Are Generally Managers And Other Employees Of A Firm.
Managerial Accounting Information Is Typically Not Provided To Outsiders But May Be In Selected Cases. For
Example, A Bank May Require Budgeting Information For The Next Few Years Before Agreeing To Grant A Loan.
4. A Managerial Accounting Information System Typically Provides Both Financial And Nonfinancial Information.
For Example, Financial Information On Cost Of Production Is Tracked. Other Information, Such As The Number Of
Warranty Returns, May Also Be Tracked By The Management Information System.
5. Controlling Is Sometimes Called Performance Evaluation. It Involves Comparing The Actual Outcome With The
Expected Outcome To See What Differences, If Any, Exist.
6. Planning Occurs First. It Requires Setting Objectives And Identifying The Means Of Achieving Those Objectives.
Then, The Results Of The Plan Are Compared With The Plan, Which Is Called Controlling. Clearly, It Is Also
Feedback, In That Any Impediments Or Unexpected Occurrences Are Noted. This Feedback Is Then Used To
Develop The Plan For The Next Period.
7. Managerial Accounting Is Internally Focused, Does Not Follow Mandatory Rules, Keeps Track Of Both Financial
And Nonfinancial Information, Emphasizes The Future, And Relies On A Broad Range Of Disciplines. Financial
Accounting Is Externally Focused, Follows Externally Imposed Rules (Such As GAAP), Has An Historical
Orientation, And Provides Information About The Company As A Whole.
8. Huge Improvements In Technology, Transportation, And Communication Over The
, Past 50 Years Have Changed The World Significantly. Managerial Accountants Have Had To Broaden Their
Focus Beyond Simple Financial Reporting To Include The Gathering Of Information On All Types Of Costs And
Of The Value Of The Product Or Service To Customers. These Broader Costs Are Used In Planning And
Decision Making.
9. Customer Value Is The Difference Between What A Customer Pays For A Product Or Service And What The
Customer Receives In Return. The Focus On Customer Value Forces Management Accounting To Look At
Many Types Of Costs, Not Simply Manufacturing Cost. These May Include The Price Of The Good Or Service,
Maintenance Costs, Search Costs, Learning Costs, And Disposal Costs.
10. Today’s Managerial Accountant Must Understand Many Functions Of The Business, From Manufacturing To
Marketing To Distribution To Customer Service, In Order To Provide Appropriate Information For Managing
The Value Chain. Increased International Trade Means That The Managerial Accountant Must Be Familiar Not
Only With Business Practices And Laws In Their Own Country But Also In The Countries With Which Their
Company Trades.
11. Enterprise Risk Management (ERM) Refers To The Formal Process Of Identifying The Factors Or Threats, Both
Internal And External To The Organization, That Might Prevent The Organization From Achieving Its
Strategic Objectives. The Managerial Accountant Plays An Increasingly Important Role In ERM By Providing
Financial And Nonfinancial Measures Of These Threats And Communicating Them To High-Level Executives
(E.G., Chief Risk Officer, Chief Financial Officer, Board Of Directors) In The Organization Who Manage These
Factors.
12. The Value Chain Is The Set Of Activities Required To Design, Develop, Produce, Market, And Deliver Products
And Services To Customers. It Is Important Because It Helps The Company To Understand Its Role In Serving
