Solutions Manual for Managerial
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Accounting:
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Creating Value in a Dynamic Business
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Environment, 13th Edition by Hilton
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,Chapter aa1: aaThe aaChanging aaRole aaof aaManagerial aaAccounting aain aaa aaDynamic aaBusiness
aa EnvironmentaChapter aa2: aaBasic aaCost aaManagement aaConcepts
Chapter aa3: aaProduct aaCosting aaand aaCost aaAccumulation aain aaa aaBatch aaProduction aaEnvironment
Chapter aa4: aaProcess aaCosting aaand aa Hybrid aaProduct-Costing aa Systems
a
Chapter aa5: aaActivity-Based aaCosting aaand aaManagement
Chapter aa6: aaActivity aaAnalysis, aaCost aaBehavior, aaand aaCost
aa EstimationaChapter aa7: aaCost-Volume-Profit aaAnalysis
Chapter aa8: aaVariable aaCosting aaand aathe aaMeasurement aaof aaESG aaand aaQuality
aa CostsaChapter aa9: aaFinancial aaPlanning aaand aaAnalysis: aaThe aaMaster aaBudget
Chapter aa10: aaStandard aaCosting aaand aaAnalysis aaof aaDirect aaCosts
Chapter aa11: aaFlexible aaBudgeting aaand aathe aaManagement aaof aaOverhead aaand aaSupport aaActivity
aa CostsaChapter aa12: aaResponsibility aaAccounting aaand aathe aaBalanced aaScorecard
Chapter aa13: aaInvestment aaCenters aaand aaTransfer aaPricing
aa Chapter aa14: aaDecision aaMaking: aaRelevant aaCosts aaand
aa Benefits
Chapter aa15: aaTarget aaCosting aaand aaCost aaAnalysis aafor aaPricing
aa DecisionsaChapter aa16: aaCapital aaExpenditure aaDecisions
Chapter aa17: aaAllocation aaof aaSupport aaActivity aaCosts aaand aaJoint aaCosts
Appendix aaI: aaThe aaSarbanes-Oxley aaAct, aaInternal aaControls, aaand aaManagement aaAccounting
Appendix aaII: aaCompound aaInterest aaand aa the aaConcept aaof aaPresent aaValue
a
Appendix aaIII: aaInventory aaManagement
,CHAPTER 1 aa
The Crucial Role of Managerial Accounting in a
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Dynamic Business Environment
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FOCUS ON ETHICS (Located before the Chapter Summary in the text.)
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The focus-on-ethics inset for Chapter 1 is the IMA Statement of Ethical Professional Practice.
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Instructors can use this list of ethical principles
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discussion. The discussion can also range to consideration of how these standards
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may have been violated by accountants and managers involved in the various ethical
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scandals uncovered over the past several years. It is also useful to discuss the pros and
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cons of the procedures that IMA suggests for its members when they believe they know
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about ethical lapses in their organizations.
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ANSWERS TO REVIEW QUESTIONS aa aa aa
1-1 The explosion in e-commerce will affect managers in significant ways.
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aaOne effect will be a drastic reduction in paper
a a work. Millions of
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aatransactions between businesses are now being conducted electronically with
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no hard-copy documentation. Along with this method of communicating for
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business transactions comes the very significant issue of information security.
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Businesses need to find ways to protect confidential information in their own
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computers, in cloud computing data centers, and while moving across the
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aainternet, while at the same time sharing the information necessary to
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complete transactions. Another effect of e-commerce is the dramatically increased
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speed with which business transactions can be conducted. In addition, there will
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be dramatic changes in the way managerial accounting procedures are carried out,
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one example being cloud-based budgeting, which is the enterprise-wide and
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electronic completion of a company’s budgeting process using cloud-based software
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and data storage.
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, 1-2 Plausible a a goals a a for a a the a a organizations a a listed a a are a a as a a follows:
(a) Amazon.com: (1) To achieve and maintain profitability, and (2) to grow
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on-line sales of their many products. Amazon is also famous (infamous) for
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wanting to have every product in the world on its site.
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(b) American Red Cross: (1) To raise funds from the general public sufficient to
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have resources available to meet any disaster that may occur, and (2) to
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provide assistance to people who are victims of a disaster anywhere in the world
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on short notice.
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(c) General Motors: (1) To earn income sufficient to provide a good return on
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the investment of the company's stockholders, and (2) to provide the highest-
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quality product possible. aa aa
(d) Wal-Mart: (1) To penetrate the retail market in virtually every location in the
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United States, and (2) to grow over time in terms of number of retail locations,
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total assets, and earnings. Also, to be competitive with Amazon in the e-
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retail space. aa
(e) City of Seattle: (1) To maintain an urban environment as free of pollution
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as possible, and (2) to provide public safety, police, and fire protection to the
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city's citizens.
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(f) Hertz: (1) To be a recognizable household name associated with rental car
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services, and (2) to provide reliable and economical transportation services to the
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company's customers.
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1-3 The a a four a a basic a a management a a activities a a are a a listed a a and a a defined a a as a a follows:
(a) Decision a a making: a a Choosing a a among a a the a a available a a alternatives.
(b) Planning: Developing a detailed financial and operational
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description ofanticipated operations.
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(c) Directing a a operations: a a Running a a the a a organization a a on a a a a a day-to-day a a basis.
(d) Controlling: Ensuring that the organization operates in the intended
aa aa aa aa aa aa aa aa
manner andachieves its goals.
aa aa a aa aa
aa aa aa
Accounting:
aa
Creating Value in a Dynamic Business
aa aa aa aa aa
Environment, 13th Edition by Hilton
a aa aa aa aa
,Chapter aa1: aaThe aaChanging aaRole aaof aaManagerial aaAccounting aain aaa aaDynamic aaBusiness
aa EnvironmentaChapter aa2: aaBasic aaCost aaManagement aaConcepts
Chapter aa3: aaProduct aaCosting aaand aaCost aaAccumulation aain aaa aaBatch aaProduction aaEnvironment
Chapter aa4: aaProcess aaCosting aaand aa Hybrid aaProduct-Costing aa Systems
a
Chapter aa5: aaActivity-Based aaCosting aaand aaManagement
Chapter aa6: aaActivity aaAnalysis, aaCost aaBehavior, aaand aaCost
aa EstimationaChapter aa7: aaCost-Volume-Profit aaAnalysis
Chapter aa8: aaVariable aaCosting aaand aathe aaMeasurement aaof aaESG aaand aaQuality
aa CostsaChapter aa9: aaFinancial aaPlanning aaand aaAnalysis: aaThe aaMaster aaBudget
Chapter aa10: aaStandard aaCosting aaand aaAnalysis aaof aaDirect aaCosts
Chapter aa11: aaFlexible aaBudgeting aaand aathe aaManagement aaof aaOverhead aaand aaSupport aaActivity
aa CostsaChapter aa12: aaResponsibility aaAccounting aaand aathe aaBalanced aaScorecard
Chapter aa13: aaInvestment aaCenters aaand aaTransfer aaPricing
aa Chapter aa14: aaDecision aaMaking: aaRelevant aaCosts aaand
aa Benefits
Chapter aa15: aaTarget aaCosting aaand aaCost aaAnalysis aafor aaPricing
aa DecisionsaChapter aa16: aaCapital aaExpenditure aaDecisions
Chapter aa17: aaAllocation aaof aaSupport aaActivity aaCosts aaand aaJoint aaCosts
Appendix aaI: aaThe aaSarbanes-Oxley aaAct, aaInternal aaControls, aaand aaManagement aaAccounting
Appendix aaII: aaCompound aaInterest aaand aa the aaConcept aaof aaPresent aaValue
a
Appendix aaIII: aaInventory aaManagement
,CHAPTER 1 aa
The Crucial Role of Managerial Accounting in a
aa aa aa aa aa aa aa
Dynamic Business Environment
aa aa aa
FOCUS ON ETHICS (Located before the Chapter Summary in the text.)
aa aa aa aa aa aa aa aa aa aa
The focus-on-ethics inset for Chapter 1 is the IMA Statement of Ethical Professional Practice.
aa aa aa aa aa aa aa aa aa aa aa aa aa
Instructors can use this list of ethical principles
aa aa and standards to lead a class
aa aa aa aa aa a a a a aa aa aa aa aa
discussion. The discussion can also range to consideration of how these standards
aa aa aa aa aa aa aa aa aa aa aa aa
may have been violated by accountants and managers involved in the various ethical
aa aa aa aa aa aa aa aa aa aa aa aa a a
scandals uncovered over the past several years. It is also useful to discuss the pros and
aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa
cons of the procedures that IMA suggests for its members when they believe they know
aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa
about ethical lapses in their organizations.
aa aa aa aa aa aa
ANSWERS TO REVIEW QUESTIONS aa aa aa
1-1 The explosion in e-commerce will affect managers in significant ways.
aa a a aa a a a a aa aa aa a a
aaOne effect will be a drastic reduction in paper
a a work. Millions of
a a aa aa aa aa aa aa a a aa aa
aatransactions between businesses are now being conducted electronically with
aa a a a a aa aa aa aa aa
no hard-copy documentation. Along with this method of communicating for
aa aa aa aa aa a aa aa aa aa
business transactions comes the very significant issue of information security.
aa aa aa aa aa aa aa aa aa aa
Businesses need to find ways to protect confidential information in their own
aa aa aa aa aa aa aa aa aa aa aa aa
computers, in cloud computing data centers, and while moving across the
aa aa aa aa aa aa aa aa aa aa a a
aainternet, while at the same time sharing the information necessary to
aa aa aa aa a a aa a a aa aa aa
complete transactions. Another effect of e-commerce is the dramatically increased
aa aa aa aa aa aa aa aa a a aa
speed with which business transactions can be conducted. In addition, there will
aa aa aa aa aa aa aa aa aa aa aa aa
be dramatic changes in the way managerial accounting procedures are carried out,
aa aa aa aa aa aa aa aa aa aa aa aa
one example being cloud-based budgeting, which is the enterprise-wide and
aa aa aa aa aa aa aa aa aa aa
electronic completion of a company’s budgeting process using cloud-based software
aa a aa aa aa aa aa aa aa aa
and data storage.
aa aa aa
, 1-2 Plausible a a goals a a for a a the a a organizations a a listed a a are a a as a a follows:
(a) Amazon.com: (1) To achieve and maintain profitability, and (2) to grow
aa aa aa aa aa aa aa aa aa aa
on-line sales of their many products. Amazon is also famous (infamous) for
aa aa aa aa aa aa aa aa aa aa aa aa
wanting to have every product in the world on its site.
aa aa aa aa aa aa aa aa aa aa aa
(b) American Red Cross: (1) To raise funds from the general public sufficient to
aa aa aa aa aa aa aa aa aa aa aa aa
have resources available to meet any disaster that may occur, and (2) to
aa aa aa aa aa aa aa aa aa aa aa aa aa
provide assistance to people who are victims of a disaster anywhere in the world
aa aa aa aa aa aa aa aa aa aa aa aa aa aa
on short notice.
aa aa aa
(c) General Motors: (1) To earn income sufficient to provide a good return on
aa aa aa aa aa aa aa aa aa aa aa aa
the investment of the company's stockholders, and (2) to provide the highest-
aa aa aa aa aa aa aa aa aa aa aa aa
quality product possible. aa aa
(d) Wal-Mart: (1) To penetrate the retail market in virtually every location in the
aa aa aa aa aa aa aa aa aa aa aa aa
United States, and (2) to grow over time in terms of number of retail locations,
aa aa aa aa aa aa aa aa aa aa a a aa aa aa aa
total assets, and earnings. Also, to be competitive with Amazon in the e-
aa a a aa aa aa aa aa aa aa aa aa aa aa
retail space. aa
(e) City of Seattle: (1) To maintain an urban environment as free of pollution
aa aa aa aa aa aa aa aa aa aa aa aa
as possible, and (2) to provide public safety, police, and fire protection to the
aa aa aa aa aa aa aa aa aa aa aa aa aa aa
city's citizens.
aa aa
(f) Hertz: (1) To be a recognizable household name associated with rental car
aa aa aa aa aa aa aa aa aa aa aa
services, and (2) to provide reliable and economical transportation services to the
aa aa aa aa aa aa aa aa aa aa aa aa
company's customers.
aa aa
1-3 The a a four a a basic a a management a a activities a a are a a listed a a and a a defined a a as a a follows:
(a) Decision a a making: a a Choosing a a among a a the a a available a a alternatives.
(b) Planning: Developing a detailed financial and operational
aa aa aa aa aa aa
description ofanticipated operations.
aa aa a aa
(c) Directing a a operations: a a Running a a the a a organization a a on a a a a a day-to-day a a basis.
(d) Controlling: Ensuring that the organization operates in the intended
aa aa aa aa aa aa aa aa
manner andachieves its goals.
aa aa a aa aa
