SOLUTIONMANUAL jh
Horngren'sAccounting,13thEditionManagerial
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byTracie Miller-Nobles, Brenda Mattison, All Chapter 1-9
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,THE MANAGERIAL CHAPTERS
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1. Introduction to Managerial Accounting jh jh jh
2. Job Order Costing
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3. Process Costing jh
4. Cost-Volume-Profit Analysis jh
5. Master Budgetsjh
6. Flexible Budgets and Standard Cost Systems
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7. Cost Allocation and Responsibility Accounting
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8. Short-Term Business Decisions jh jh
9. Capital Investment Decisions
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,Chapter1 jh
Introduction to Managerial Accounting jh jh jh
Review Questions j h jh
1. The primary purpose of managerial accounting is to provide information to help managers
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plan, direct, control, and make decisions.
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2. Financial accounting and managerial accounting differ on the following 6 dimensions: (1) primary
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j users, (2) purpose of information, (3) focus and time dimension of the information, (4) rules and
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restrictions, (5) scope of information, and (6) behavioral.
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3. Line positions are directly involved in providing goods or services to customers. Staff positions
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jsupport line positions.
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4. Planning means choosing goals and deciding how to achieve them. Directing involves running the day-
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to-day operations of a business. Controlling is the process of monitoring operations and keepingthe
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jcompany on track.
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5. The four IMA standards of ethical practice and a description of each follow.
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I. Competence.
Maintain an appropriate level of professional leadership and expertise by enhancing jh jh jh jh jh jh jh jh jh jh
knowledge and skills. j h jh jh
Perform professional duties in accordance with relevant laws, regulations, and technical jh jh jh jh jh jh jh jh jh jh
standards. j h
Provide decision support information and recommendations that are accurate, clear, concise,
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and timely. j h jh
Recognise and help mange risk. jh jh jh jh
II. Confidentiality.
Keep information confidential except when disclosure is authorized or legally required.
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Inform all relevant parties regarding appropriate use of confidential information.
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Monitor to ensure compliance.
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Refrain from using confidential information for unethical or illegal advantage.
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III. Integrity.
Mitigate actual conflicts of interest. Regularly communicate with business associates to avoid jh jh jh jh jh jh jh jh jh jh jh
apparent conflicts of interest. Advise all parties of any potential conflicts.
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Refrain from engaging in any conduct that would prejudice carrying out duties ethically.
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, Abstain from engaging in or supporting any activity that might discredit the profession.
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Contribute to a positive ethical culture and place integrity of the profession above
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personal interest.
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5, cont.
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IV. Credibility.
Communicate information fairly and objectively. jh jh jh jh
Provide all relevant information that could reasonably be expected to influence an intended jh jh jh jh jh jh jh jh jh jh jh jh
user’s understanding of the reports, analyses, or recommendations.
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Report any delays or deficiencies in information, timeliness, processing, or internal controlsin jh jh jh jh jh jh jh jh jh jh jh
conformance with organization policy and/or applicable law.
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Communicate any professional limitations or other constraints that would preclude responsi- jh jh jh jh jh jh jh jh jh jh
ble judgment or successful performance of an activity.
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6. Service companies sell time, skills, and knowledge. Examples of service companies include phone
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service companies, banks, cleaning service companies, accounting firms, law firms, medical physicians,
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and online auction services.
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7. Merchandising companies resell products they buy from suppliers. Merchandisers keep an inventoryof jh jh jh jh jh jh jh jh jh jh jh
products, and managers are accountable for the purchasing, storage, and sale of the products.
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Examples of merchandising companies include toy stores, grocery stores, and clothing stores.
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8. Merchandising companies resell products they previously bought from suppliers, whereas jh jh jh jh jh jh jh jh jh
manufacturing companies use labor, equipment, supplies, and facilities to convert raw materials into
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new finished products. In contrast to merchandising companies, manufacturing companies have a
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broad range of production activities that require tracking costs on three kinds of inventory.
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9. The three inventory accounts used by manufacturing companies are Raw Materials Inventory, Work-in-
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Process Inventory, and Finished Goods Inventory.
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Raw Materials Inventory includes materials used to manufacture a product. Work-in-ProcessInventory
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j includes goods that have been started in the manufacturing process but are not yet complete.
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Finished Goods Inventory includes completed goods that have not yet been sold.
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10. A direct cost is a cost that can be easily and cost-effectively traced to a cost object (which is anything
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for which managers want a separate measurement of cost). An indirect cost is a cost thatcannot be
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easily or cost-effectively traced to a cost object.
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11. The three manufacturing costs for a manufacturing company are direct materials, direct labor, and
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manufacturing overhead. Direct materials are materials that become a physical part of a finished
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product and whose costs are easily traceable to the finished product. Direct labor is the labor cost
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of the employees who convert materials into finished products. Manufacturing overhead includes all
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manufacturing costs except direct materials and direct labor, such as indirect materials, indirect
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labor, factory depreciation, factory rent, and factory property taxes.
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Horngren'sAccounting,13thEditionManagerial
jh jh jh jh
byTracie Miller-Nobles, Brenda Mattison, All Chapter 1-9
jh jh jh jh jh jh jh
,THE MANAGERIAL CHAPTERS
jh jh
1. Introduction to Managerial Accounting jh jh jh
2. Job Order Costing
jh jh
3. Process Costing jh
4. Cost-Volume-Profit Analysis jh
5. Master Budgetsjh
6. Flexible Budgets and Standard Cost Systems
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7. Cost Allocation and Responsibility Accounting
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8. Short-Term Business Decisions jh jh
9. Capital Investment Decisions
jh jh
,Chapter1 jh
Introduction to Managerial Accounting jh jh jh
Review Questions j h jh
1. The primary purpose of managerial accounting is to provide information to help managers
jh jh jh jh jh jh jh jh jh jh jh jh
plan, direct, control, and make decisions.
jh j h jh jh jh jh
2. Financial accounting and managerial accounting differ on the following 6 dimensions: (1) primary
jh jh jh jh jh jh jh jh jh jh jh jh
j users, (2) purpose of information, (3) focus and time dimension of the information, (4) rules and
h jh jh jh jh jh jh jh jh jh jh jh jh jh jh jh
restrictions, (5) scope of information, and (6) behavioral.
jh jh jh jh jh jh jh jh
3. Line positions are directly involved in providing goods or services to customers. Staff positions
jh jh jh jh jh jh jh jh jh jh jh jh jh
jsupport line positions.
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4. Planning means choosing goals and deciding how to achieve them. Directing involves running the day-
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to-day operations of a business. Controlling is the process of monitoring operations and keepingthe
j h jh jh jh jh jh jh jh jh jh jh jh jh jh
jcompany on track.
h jh jh
5. The four IMA standards of ethical practice and a description of each follow.
jh jh jh jh jh jh jh jh jh jh jh jh
I. Competence.
Maintain an appropriate level of professional leadership and expertise by enhancing jh jh jh jh jh jh jh jh jh jh
knowledge and skills. j h jh jh
Perform professional duties in accordance with relevant laws, regulations, and technical jh jh jh jh jh jh jh jh jh jh
standards. j h
Provide decision support information and recommendations that are accurate, clear, concise,
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and timely. j h jh
Recognise and help mange risk. jh jh jh jh
II. Confidentiality.
Keep information confidential except when disclosure is authorized or legally required.
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Inform all relevant parties regarding appropriate use of confidential information.
j h jh jh jh jh jh jh jh jh jh
Monitor to ensure compliance.
j h jh j h jh
Refrain from using confidential information for unethical or illegal advantage.
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III. Integrity.
Mitigate actual conflicts of interest. Regularly communicate with business associates to avoid jh jh jh jh jh jh jh jh jh jh jh
apparent conflicts of interest. Advise all parties of any potential conflicts.
j h jh jh jh j h jh jh jh jh jh jh
Refrain from engaging in any conduct that would prejudice carrying out duties ethically.
jh jh jh jh jh jh jh jh jh jh jh jh
, Abstain from engaging in or supporting any activity that might discredit the profession.
jh jh jh jh jh jh jh jh jh jh jh jh
Contribute to a positive ethical culture and place integrity of the profession above
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personal interest.
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5, cont.
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IV. Credibility.
Communicate information fairly and objectively. jh jh jh jh
Provide all relevant information that could reasonably be expected to influence an intended jh jh jh jh jh jh jh jh jh jh jh jh
user’s understanding of the reports, analyses, or recommendations.
j h jh jh jh jh jh jh jh
Report any delays or deficiencies in information, timeliness, processing, or internal controlsin jh jh jh jh jh jh jh jh jh jh jh
conformance with organization policy and/or applicable law.
j h jh jh jh jh jh jh
Communicate any professional limitations or other constraints that would preclude responsi- jh jh jh jh jh jh jh jh jh jh
ble judgment or successful performance of an activity.
j h jh jh jh jh jh jh jh
6. Service companies sell time, skills, and knowledge. Examples of service companies include phone
jh jh jh jh jh jh j h jh jh jh jh jh
service companies, banks, cleaning service companies, accounting firms, law firms, medical physicians,
j h jh jh jh jh jh jh jh jh jh jh jh
and online auction services.
j h jh jh jh
7. Merchandising companies resell products they buy from suppliers. Merchandisers keep an inventoryof jh jh jh jh jh jh jh jh jh jh jh
products, and managers are accountable for the purchasing, storage, and sale of the products.
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Examples of merchandising companies include toy stores, grocery stores, and clothing stores.
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8. Merchandising companies resell products they previously bought from suppliers, whereas jh jh jh jh jh jh jh jh jh
manufacturing companies use labor, equipment, supplies, and facilities to convert raw materials into
j h jh jh jh jh jh jh jh jh jh jh jh jh
new finished products. In contrast to merchandising companies, manufacturing companies have a
j h jh jh jh jh jh jh jh jh jh jh jh
broad range of production activities that require tracking costs on three kinds of inventory.
j h jh jh jh jh jh jh jh jh jh jh jh jh jh
9. The three inventory accounts used by manufacturing companies are Raw Materials Inventory, Work-in-
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Process Inventory, and Finished Goods Inventory.
j h jh jh jh jh jh
Raw Materials Inventory includes materials used to manufacture a product. Work-in-ProcessInventory
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j includes goods that have been started in the manufacturing process but are not yet complete.
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Finished Goods Inventory includes completed goods that have not yet been sold.
j h j h jh jh jh jh jh jh jh jh jh jh
10. A direct cost is a cost that can be easily and cost-effectively traced to a cost object (which is anything
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for which managers want a separate measurement of cost). An indirect cost is a cost thatcannot be
j h jh jh jh jh jh jh jh jh jh jh jh jh jh jh jh jh
easily or cost-effectively traced to a cost object.
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11. The three manufacturing costs for a manufacturing company are direct materials, direct labor, and
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manufacturing overhead. Direct materials are materials that become a physical part of a finished
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product and whose costs are easily traceable to the finished product. Direct labor is the labor cost
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of the employees who convert materials into finished products. Manufacturing overhead includes all
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manufacturing costs except direct materials and direct labor, such as indirect materials, indirect
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labor, factory depreciation, factory rent, and factory property taxes.
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