Instructor Solutions Manual Horngren's Cost Accounting A Managerial Emphasis, 9th Canadian Edition By Srikant Datar, Madhav
Rajan, Louis Beaubien, Steve Janz
Instructor Solutions Manual Horngren's Cost Accounting A Managerial Emphasis, 9th Canadian Edition By Srikant Datar, Madhav
Rajan, Louis Beaubien, Steve Janz
, INSTRUCTOR’S
SOLUTIONS MANUAL
Horngren’s Cost Accounting
A Managerial Emphasis
Ninth Canadian Edition
Srikant M. Datar
Madhav V. Rajan
Louis Beaubien
Steve Janz
Copyright © 2023 Pearson Canada Inc., Toronto, Ontario.
All rights reserved. This work is protected by Canadian copyright laws and is provided solely for the use of instructors in teaching
their courses and assessing student learning. Dissemination or sale of any part of this work (including on the Internet) will destroy
the integrity of the work and is not permitted. The copyright holder grants permission to instructors who have adopted Horngren’s
Cost Accounting: A Managerial Emphasis, Ninth Canadian Edition, by Srikant M. Datar, Madhav V. Rajan, Louis Beaubien, and
Steve Janz to post this material online only if the use of the website is restricted by access codes to students in the instructor’s class
that is using the textbook and provided the reproduced material bears this copyright notice.
,Instructor Solutions Manual Horngren's Cost Accounting A Managerial Emphasis, 9th Canadian Edition By Srikant Datar,
Madhav Rajan, Louis Beaubien, Steve Janz
CHAPTER 1
THE ACCOUNTANT’S VITAL ROLE IN DECISION MAKING
MyLab Accounting Make the grade with MyLab Accounting: Select end-of-chapter questions can
be found on MyLab Accounting. You can practise them as often as you want, and most feature
step-by-step guided instructions to help you find the right answer.
SHORT-ANSWER QUESTIONS
1-1 Management accounting measures, analyzes, and reports financial and nonfinancial
information to internal managers making internal decisions to improve performance. The
reporting and analyses are not restricted by generally accepted accounting principles (GAAP)
based on either International Financial Reporting Standards (IFRS) or Canadian Accounting
Standards for Private Exterprise (ASPE).
Financial accounting measures, analyzes, and reports primarily financial information to
external parties who own the corporate assets, such as investors, government agencies, and
banks. Methods of identification and classification of business transactions, measurement of their
economic effect, analyses, and reporting in financial statements must comply with standards set
by the Chartered Professional Accountants of Canada (CPA Canada).
Other differences include (1) management accounting emphasizes the future (not the
past), and (2) management accounting is designed specifically to influence the behaviour of
managers and other employees (rather than primarily reporting economic events).
1-2 In Canada, financial accounting is constrained by GAAP. Companies listed on stock
exchanges must comply with IFRS. Other companies must comply with ASPE when reporting to
external parties. Management accounting is not restricted to these principles. The result is:
• management accountants can charge interest on owners’ capital to help judge a division’s
performance, even though such a charge is not allowed under GAAP
• management accountants can classify, measure, and include the value of internally developed
assets and liabilities not recognized under GAAP
• management accountants can use measurement methods of the value of assets or liabilities
not permitted under GAAP
• management accountants can change the method of revenue and expense recognition, which
is not permitted under GAAP, and
• management accountants assess the quality of information provided based on how well it
reflects the economic reality of a real business process, not a standard.
Copyright © 2022 Pearson Canada Inc.
1-1
, Instructor’s Solutions Manual for Cost Accounting, Ninth Canadian Edition
1-3 Management accountants help formulate strategy by identifying relevant information
about the sources of competitive advantage—usually the cost, productivity, or efficiency
advantage of their company relative to competitors. Alternatively, management accountants can
analyze the benefits to customers and the costs to the company of adding features to further
customize more distinctive products or services. These data will assist in setting an appropriate
premium price for distinctive value-added attributes as determined by the customer.
1-4 The business functions in the value chain are
• Research and development—generating and experimenting with ideas related to new
products, services, or processes.
• Design of products, services, and processes—the detailed planning and engineering of
products, services, or processes.
• Production—acquiring, coordinating, and assembling resources to produce a product or
deliver a service.
• Marketing—promoting and selling products or services to customers or prospective
customers.
• Distribution—delivering products or services to customers.
• Customer service—providing after-sale support to customers.
1-5 The “supply chain” is a coordinated flow of goods, services, and information from each
initial source of materials and services to the delivery of products to consumers, whether or not
the supply activities occur in the purchasing or in other organizations.
Cost management is most effective when it integrates and coordinates activities across all
suppliers in the supply chain as well as across each business function in the purchasing
company’s value chain. Business functions can be restructured to be more cost-effective.
1-6 This statement is wrong. Management accountants also analyze revenues from products,
services, and customers relative to their costs to assess the profitability of types of products,
services, and customers. Management accountants also examine the business environment and
report relevant information on the intensity of competition. Cost information is only one part of
the relevant internal and external information identified, analyzed, and reported by management
accountants.
1-7 Management accountants help a management team identify performance measures that
are important to maintain or increase profitability. Important measures include features, quality,
and timely delivery as determined by customers. For-profit companies use these data to evaluate
the balance of costs and benefits—both financial and nonfinancial—and provide relative
assurance that proposed changes will not impair profitability. Initiatives include TQM, relieving
bottleneck constraints, or providing faster customer service.
Copyright © 2022 Pearson Canada Inc.
1-2
Rajan, Louis Beaubien, Steve Janz
Instructor Solutions Manual Horngren's Cost Accounting A Managerial Emphasis, 9th Canadian Edition By Srikant Datar, Madhav
Rajan, Louis Beaubien, Steve Janz
, INSTRUCTOR’S
SOLUTIONS MANUAL
Horngren’s Cost Accounting
A Managerial Emphasis
Ninth Canadian Edition
Srikant M. Datar
Madhav V. Rajan
Louis Beaubien
Steve Janz
Copyright © 2023 Pearson Canada Inc., Toronto, Ontario.
All rights reserved. This work is protected by Canadian copyright laws and is provided solely for the use of instructors in teaching
their courses and assessing student learning. Dissemination or sale of any part of this work (including on the Internet) will destroy
the integrity of the work and is not permitted. The copyright holder grants permission to instructors who have adopted Horngren’s
Cost Accounting: A Managerial Emphasis, Ninth Canadian Edition, by Srikant M. Datar, Madhav V. Rajan, Louis Beaubien, and
Steve Janz to post this material online only if the use of the website is restricted by access codes to students in the instructor’s class
that is using the textbook and provided the reproduced material bears this copyright notice.
,Instructor Solutions Manual Horngren's Cost Accounting A Managerial Emphasis, 9th Canadian Edition By Srikant Datar,
Madhav Rajan, Louis Beaubien, Steve Janz
CHAPTER 1
THE ACCOUNTANT’S VITAL ROLE IN DECISION MAKING
MyLab Accounting Make the grade with MyLab Accounting: Select end-of-chapter questions can
be found on MyLab Accounting. You can practise them as often as you want, and most feature
step-by-step guided instructions to help you find the right answer.
SHORT-ANSWER QUESTIONS
1-1 Management accounting measures, analyzes, and reports financial and nonfinancial
information to internal managers making internal decisions to improve performance. The
reporting and analyses are not restricted by generally accepted accounting principles (GAAP)
based on either International Financial Reporting Standards (IFRS) or Canadian Accounting
Standards for Private Exterprise (ASPE).
Financial accounting measures, analyzes, and reports primarily financial information to
external parties who own the corporate assets, such as investors, government agencies, and
banks. Methods of identification and classification of business transactions, measurement of their
economic effect, analyses, and reporting in financial statements must comply with standards set
by the Chartered Professional Accountants of Canada (CPA Canada).
Other differences include (1) management accounting emphasizes the future (not the
past), and (2) management accounting is designed specifically to influence the behaviour of
managers and other employees (rather than primarily reporting economic events).
1-2 In Canada, financial accounting is constrained by GAAP. Companies listed on stock
exchanges must comply with IFRS. Other companies must comply with ASPE when reporting to
external parties. Management accounting is not restricted to these principles. The result is:
• management accountants can charge interest on owners’ capital to help judge a division’s
performance, even though such a charge is not allowed under GAAP
• management accountants can classify, measure, and include the value of internally developed
assets and liabilities not recognized under GAAP
• management accountants can use measurement methods of the value of assets or liabilities
not permitted under GAAP
• management accountants can change the method of revenue and expense recognition, which
is not permitted under GAAP, and
• management accountants assess the quality of information provided based on how well it
reflects the economic reality of a real business process, not a standard.
Copyright © 2022 Pearson Canada Inc.
1-1
, Instructor’s Solutions Manual for Cost Accounting, Ninth Canadian Edition
1-3 Management accountants help formulate strategy by identifying relevant information
about the sources of competitive advantage—usually the cost, productivity, or efficiency
advantage of their company relative to competitors. Alternatively, management accountants can
analyze the benefits to customers and the costs to the company of adding features to further
customize more distinctive products or services. These data will assist in setting an appropriate
premium price for distinctive value-added attributes as determined by the customer.
1-4 The business functions in the value chain are
• Research and development—generating and experimenting with ideas related to new
products, services, or processes.
• Design of products, services, and processes—the detailed planning and engineering of
products, services, or processes.
• Production—acquiring, coordinating, and assembling resources to produce a product or
deliver a service.
• Marketing—promoting and selling products or services to customers or prospective
customers.
• Distribution—delivering products or services to customers.
• Customer service—providing after-sale support to customers.
1-5 The “supply chain” is a coordinated flow of goods, services, and information from each
initial source of materials and services to the delivery of products to consumers, whether or not
the supply activities occur in the purchasing or in other organizations.
Cost management is most effective when it integrates and coordinates activities across all
suppliers in the supply chain as well as across each business function in the purchasing
company’s value chain. Business functions can be restructured to be more cost-effective.
1-6 This statement is wrong. Management accountants also analyze revenues from products,
services, and customers relative to their costs to assess the profitability of types of products,
services, and customers. Management accountants also examine the business environment and
report relevant information on the intensity of competition. Cost information is only one part of
the relevant internal and external information identified, analyzed, and reported by management
accountants.
1-7 Management accountants help a management team identify performance measures that
are important to maintain or increase profitability. Important measures include features, quality,
and timely delivery as determined by customers. For-profit companies use these data to evaluate
the balance of costs and benefits—both financial and nonfinancial—and provide relative
assurance that proposed changes will not impair profitability. Initiatives include TQM, relieving
bottleneck constraints, or providing faster customer service.
Copyright © 2022 Pearson Canada Inc.
1-2
