Solution Manual – Managerial Accounting: Creating Value in a Dynamic Business Environment, 13th Edition Hilton, Chapters 1–17 with Appendices I–III

Solutions Manuali




Managerial Accounting: Creating Value in a Dynamic
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i Business Environment, 13th Edition by Hilton Chapters 1
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i - 17 Complete
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,TABLE OF CONTENTS i i




Chapter 1: The Changing Role of Managerial Accounting in a Dynamic Business
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EnvironmentChapter 2: Basic Cost Management Concepts
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Chapter 3: Product Costing and Cost Accumulation in a Batch Production Environment
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Chapter 4: Process Costing and Hybrid Product-Costing Systems
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Chapter 5: Activity-Based Costing and Management
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Chapter 6: Activity Analysis, Cost Behavior, and Cost
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EstimationChapter 7: Cost-Volume-Profit Analysis
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Chapter 8: Variable Costing and the Measurement of ESG and Quality Costs
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Chapter 9: Financial Planning and Analysis: The Master Budget
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Chapter 10: Standard Costing and Analysis of Direct Costs
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Chapter 11: Flexible Budgeting and the Management of Overhead and Support Activity
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CostsChapter 12: Responsibility Accounting and the Balanced Scorecard
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Chapter 13: Investment Centers and Transfer Pricing
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Chapter 14: Decision Making: Relevant Costs and
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Benefits
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Chapter 15: Target Costing and Cost Analysis for Pricing
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DecisionsChapter 16: Capital Expenditure Decisions
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Chapter 17: Allocation of Support Activity Costs and Joint Costs
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Appendix I: The Sarbanes-Oxley Act, Internal Controls, and Management Accounting
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Appendix II: Compound Interest and the Concept of Present Value
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Appendix III: Inventory Management
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,CHAPTER 1 i




The Crucial Role of Managerial Accounting in a
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DynamicBusiness Environment
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FOCUS ON ETHICS (Located before the Chapter Summaryin 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 and standards to lead a class discussion.
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The discussion can also range to consideration of how these standards may have been
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violated by accountants and managers involved in the various ethical scandals uncovered
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over the past several years. It is also useful to discuss the pros and cons of the procedures
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that IMA suggests for its members when they believe they know about ethical lapses in their
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organizations.
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ANSWERS TOREVIEWQUESTIONS i i i




1-1 The explosion in e-commerce will affect managers in significant ways. One effect
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will be a drastic reduction in paper work. Millions of transactions between businesses
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are now being conducted electronically with no hard-copy documentation.
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Along with this method of communicating for business transactions comes the very
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significant issue of information security. Businesses need to find ways to protect
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confidential information in their own computers, in cloud computing data
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centers, and while moving across the internet, while at the same time sharing
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the information necessary to complete transactions. Another effect of e-commerce is
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the dramatically increased speed with which business transactions can be
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conducted. In addition, there will be dramatic changes in the way managerial
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accounting procedures are carried out, one example being cloud-based
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budgeting, which is the enterprise-wide and electroniccompletion of a company’s
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budgeting process using cloud-based software and data storage.
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, 1-2 Plausible goals for the organizations listed are as follows:
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(a) Amazon.com: (1) To achieve and maintain profitability, and (2) to grow on- i i i i i i i i i i i




line sales of their many products. Amazon is also famous (infamous) for wanting
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ito 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 have
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iresources available to meet any disaster that may occur, and (2) to provide
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iassistance to people who are victims of a disaster anywhere in the world on short
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inotice.
(c) General Motors: (1) To earn income sufficient to provide a good return on
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ithe investment of the company's stockholders, and (2) to provide the highest-
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quality product possible. i i




(d) Wal-Mart: (1) To penetrate the retail market in virtually every location in the United
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iStates, and (2) to grow over time in terms of number of retail locations, total assets,
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iand earnings. Also, to be competitive with Amazon in the e-retail space.
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(e) City of Seattle: (1) To maintain an urban environment as free of pollution as
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ipossible, and (2) to provide public safety, police, and fire protection to the city's
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icitizens.
(f) Hertz: (1) To be a recognizable household name associated with rental car
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iservices, and (2) to provide reliable and economical transportation services to the
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icompany'scustomers. i




1-3 The four basic management activities are listed and defined as follows:
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(a) Decision making: Choosing among the available alternatives.
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(b) Planning: Developing a detailed financial and operational i i i i i i




idescription ofanticipated operations. i i i




(c) Directing operations: Running the organization on a day-to-day basis.
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(d) Controlling: Ensuring that the organization operates in the intended i i i i i i i i




imanner andachieves its goals. i i i i