SOLUTION MANUAL
Horngren's Accounting, The Managerial Chapters, 14th Edition
By Tracie Miller-Nobles Brenda Mattison, All Chapters 1 - 9
,Table of contents
1. Introduction to Managerial Accounting
2. Job Order Costing
3. Process Costing
4. Cost-Volume-Profit Analysis
5. Master Budgets
6. Flexible Budgets and Standard Cost Systems
7. Cost Allocation and Responsibility Accounting
8. Short-Term Business Decisions
9. Capital Investment Decisions
,Chapter M:1
Introduction to Managerial Accounting
Review Questions
1. What is the primary purpose of managerial accounting?
The primary purpose of managerial accounting is to provide information to help managers
plan,direct, control, and make decisions.
2. List six differences between financial accounting and managerial accounting.
Financial accounting and managerial accounting differ on the following 6 dimensions: (1) primary
users, (2) purpose of information, (3) focus and time dimension of the information, (4) rules and
re-strictions, (5) scope of information, and (6) behavioral.
3. Explain the difference between line positions and staff positions.
Line positions are directly involved in providing goods or services to customers. Staff positions
support line positions.
4. Explain the differences between planning, directing, and controlling.
Planning means choosing goals and deciding how to achieve them. Directing involves running the
day-to-day operations of a business. Controlling is the process of monitoring operations and
keepingthe company on track.
5. List the four IMA standards of ethical practice and briefly describe each.
The four IMA standards of ethical practice and a description of each follow.
I. Competence.
Maintain an appropriate level of professional leadership and expertise by
enhancingknowledge and skills.
Perform professional duties in accordance with relevant laws, regulations, and
technicalstandards.
Provide decision support information and recommendations that are accurate, clear, concise,
, and timely.
Recognise and help mange risk.
II. Confidentiality.
Keep information confidential except when disclosure is authorized or legally required.
Inform all relevant parties regarding appropriate use of confidential information. Monitor
toensure compliance.
Refrain from using confidential information for unethical or illegal advantage.
III. Integrity.
Mitigate actual conflicts of interest. Regularly communicate with business associates to
avoidapparent conflicts of interest. Advise all parties of any potential conflicts.
Refrain from engaging in any conduct that would prejudice carrying out duties ethically.
Abstain from engaging in or supporting any activity that might discredit the profession.
Contribute to a positive ethical culture and place integrity of the profession above
personalinterest.
5, cont.
IV. Credibility.
Communicate information fairly and objectively.
Provide all relevant information that could reasonably be expected to influence an
intendeduser’s understanding of the reports, analyses, or recommendations.
Report any delays or deficiencies in information, timeliness, processing, or internal
controlsin conformance with organization policy and/or applicable law.
Communicate any professional limitations or other constraints that would preclude
responsi-ble judgment or successful performance of an activity.
6. Describe da dservice dcompany dand dgive dan dexample.
Service dcompanies dsell dtime, dskills, dand dknowledge. dExamples dof dservice dcompanies dinclude
dphone d service dcompanies, dbanks, dcleaning dservice dcompanies, daccounting dfirms, dlaw
dfirms, dmedical dphysi- d cians, dand donline dauction dservices.
7. Describe da dmerchandising dcompany dand dgive dan dexample.
Merchandising dcompanies dresell dproducts dthey dbuy dfrom dsuppliers. dMerchandisers dkeep dan
d inventoryof dproducts, dand dmanagers dare daccountable dfor dthe dpurchasing, dstorage, dand dsale
dof dthe d products. dEx- damples dof dmerchandising dcompanies dinclude dtoy dstores, dgrocery
dstores, dand dclothing d stores.
8. How ddo dmanufacturing dcompanies ddiffer dfrom dmerchandising dcompanies?
Merchandising dcompanies dresell dproducts dthey dpreviously dbought dfrom dsuppliers, dwhereas
Horngren's Accounting, The Managerial Chapters, 14th Edition
By Tracie Miller-Nobles Brenda Mattison, All Chapters 1 - 9
,Table of contents
1. Introduction to Managerial Accounting
2. Job Order Costing
3. Process Costing
4. Cost-Volume-Profit Analysis
5. Master Budgets
6. Flexible Budgets and Standard Cost Systems
7. Cost Allocation and Responsibility Accounting
8. Short-Term Business Decisions
9. Capital Investment Decisions
,Chapter M:1
Introduction to Managerial Accounting
Review Questions
1. What is the primary purpose of managerial accounting?
The primary purpose of managerial accounting is to provide information to help managers
plan,direct, control, and make decisions.
2. List six differences between financial accounting and managerial accounting.
Financial accounting and managerial accounting differ on the following 6 dimensions: (1) primary
users, (2) purpose of information, (3) focus and time dimension of the information, (4) rules and
re-strictions, (5) scope of information, and (6) behavioral.
3. Explain the difference between line positions and staff positions.
Line positions are directly involved in providing goods or services to customers. Staff positions
support line positions.
4. Explain the differences between planning, directing, and controlling.
Planning means choosing goals and deciding how to achieve them. Directing involves running the
day-to-day operations of a business. Controlling is the process of monitoring operations and
keepingthe company on track.
5. List the four IMA standards of ethical practice and briefly describe each.
The four IMA standards of ethical practice and a description of each follow.
I. Competence.
Maintain an appropriate level of professional leadership and expertise by
enhancingknowledge and skills.
Perform professional duties in accordance with relevant laws, regulations, and
technicalstandards.
Provide decision support information and recommendations that are accurate, clear, concise,
, and timely.
Recognise and help mange risk.
II. Confidentiality.
Keep information confidential except when disclosure is authorized or legally required.
Inform all relevant parties regarding appropriate use of confidential information. Monitor
toensure compliance.
Refrain from using confidential information for unethical or illegal advantage.
III. Integrity.
Mitigate actual conflicts of interest. Regularly communicate with business associates to
avoidapparent conflicts of interest. Advise all parties of any potential conflicts.
Refrain from engaging in any conduct that would prejudice carrying out duties ethically.
Abstain from engaging in or supporting any activity that might discredit the profession.
Contribute to a positive ethical culture and place integrity of the profession above
personalinterest.
5, cont.
IV. Credibility.
Communicate information fairly and objectively.
Provide all relevant information that could reasonably be expected to influence an
intendeduser’s understanding of the reports, analyses, or recommendations.
Report any delays or deficiencies in information, timeliness, processing, or internal
controlsin conformance with organization policy and/or applicable law.
Communicate any professional limitations or other constraints that would preclude
responsi-ble judgment or successful performance of an activity.
6. Describe da dservice dcompany dand dgive dan dexample.
Service dcompanies dsell dtime, dskills, dand dknowledge. dExamples dof dservice dcompanies dinclude
dphone d service dcompanies, dbanks, dcleaning dservice dcompanies, daccounting dfirms, dlaw
dfirms, dmedical dphysi- d cians, dand donline dauction dservices.
7. Describe da dmerchandising dcompany dand dgive dan dexample.
Merchandising dcompanies dresell dproducts dthey dbuy dfrom dsuppliers. dMerchandisers dkeep dan
d inventoryof dproducts, dand dmanagers dare daccountable dfor dthe dpurchasing, dstorage, dand dsale
dof dthe d products. dEx- damples dof dmerchandising dcompanies dinclude dtoy dstores, dgrocery
dstores, dand dclothing d stores.
8. How ddo dmanufacturing dcompanies ddiffer dfrom dmerchandising dcompanies?
Merchandising dcompanies dresell dproducts dthey dpreviously dbought dfrom dsuppliers, dwhereas
