SOLUTION MANUAL
Horngren's Accounting, The Managerial Chapters, 14th Edition
By Tracie Miller-Nobles Brenda Mattison, All Chapters 1 - 9
,Table of contents
j j
1. Introduction to Managerial Accounting
j j j
2. Job Order Costing
j j
3. Process Costing j
4. Cost-Volume-Profit Analysis j
5. Master Budgets
j
6. Flexible Budgets and Standard Cost Systems
j j j j j
7. Cost Allocation and Responsibility Accounting
j j j j
8. Short-Term Business Decisions j j
9. Capital Investment Decisions
j j
,Chapter M:1 j
Introduction to Managerial Accounting
j j j
Review Questions
j
1. Whatjisjthejprimaryjpurposejofjmanagerialjaccounting?
Thejprimaryjpurposejofjmanagerialjaccountingjisjtojprovidejinformationjtojhelpjmanagersjplan,jdirect,jc
ontrol,jandjmakejdecisions.
2. Listjsixjdifferencesjbetweenjfinancialjaccountingjandjmanagerialjaccounting.
Financialjaccountingjandjmanagerialjaccountingjdifferjonjthejfollowingj6jdimensions:j(1)jprimaryjusers,j(2)jp
urposejofjinformation,j(3)jfocusjandjtimejdimensionjofjthejinformation,j(4)jrulesjandjre-
jstrictions,j(5)jscopejofjinformation,jandj(6)jbehavioral.
3. Explainjthejdifferencejbetweenjlinejpositionsjandjstaffjpositions.
Linejpositionsjarejdirectlyjinvolvedjinjprovidingjgoodsjorjservicesjtojcustomers.jStaffjpositionsjsupportjl
inejpositions.
4. Explainjthejdifferencesjbetweenjplanning,jdirecting,jandjcontrolling.
Planningjmeansjchoosingjgoalsjandjdecidingjhowjtojachievejthem.jDirectingjinvolvesjrunningjthejday-to-
dayjoperationsjofjajbusiness.jControllingjisjthejprocessjofjmonitoringjoperationsjandjkeepingjthejcompanyjon
jtrack.
5. ListjthejfourjIMAjstandardsjofjethicaljpracticejandjbrieflyjdescribejeach.
ThejfourjIMAjstandardsjofjethicaljpracticejandjajdescriptionjofjeachjfollow.
I. Competence.
Maintainjanjappropriatejleveljofjprofessionaljleadershipjandjexpertisejbyjenhancingjknowle
dgejandjskills.
Performjprofessionaljdutiesjinjaccordancejwithjrelevantjlaws,jregulations,jandjtechnicaljstandar
ds.
Providejdecisionjsupportjinformationjandjrecommendationsjthatjarejaccurate,jclear,jconcise,
, andjtimely.
Recognisejandjhelpjmangejrisk.
II. Confidentiality.
Keepjinformationjconfidentialjexceptjwhenjdisclosurejisjauthorizedjorjlegallyjrequired.
Informjalljrelevantjpartiesjregardingjappropriatejusejofjconfidentialjinformation.j Monitorjtojensurej
compliance.
Refrainjfromjusingjconfidentialjinformationjforjunethicaljorjillegaljadvantage.
III. Integrity.
Mitigatejactualjconflictsjofjinterest.jRegularlyjcommunicatejwithjbusinessjassociatesjtojavoidjapparent
jconflictsjofjinterest.jjAdvisejalljpartiesjofjanyjpotentialjconflicts.
Refrainjfromjengagingjinjanyjconductjthatjwouldjprejudicejcarryingjoutjdutiesjethically.
Abstainjfromjengagingjinjorjsupportingjanyjactivityjthatjmightjdiscreditjthejprofession.
Contributejtojajpositivejethicaljculturejandjplacejintegrityjofjthejprofessionjabovejpersonaljinterest.
5,jcont.
IV. Credibility.
Communicatejinformationjfairlyjandjobjectively.
Providejalljrelevantjinformationjthatjcouldjreasonablyjbejexpectedjtojinfluencejanjintendedjuser’sju
nderstandingjofjthejreports,janalyses,jorjrecommendations.
Reportjanyjdelaysjorjdeficienciesjinjinformation,jtimeliness,jprocessing,jorjinternaljcontrolsjinjconfo
rmancejwithjorganizationjpolicyjand/orjapplicablejlaw.
Communicatejanyjprofessionaljlimitationsjorjotherjconstraintsjthatjwouldjprecludejresponsi-
jblejjudgmentjorjsuccessfuljperformancejofjanjactivity.
6. Describejajservicejcompanyjandjgivejanjexample.
Servicejcompaniesjselljtime,jskills,jandjknowledge.jExamplesjofjservicejcompaniesjincludejphonejservicejco
mpanies,jbanks,jcleaningjservicejcompanies,jaccountingjfirms,jlawjfirms,jmedicaljphysi-
jcians,jandjonlinejauctionjservices.
7. Describejajmerchandisingjcompanyjandjgivejanjexample.
Merchandisingjcompaniesjreselljproductsjtheyjbuyjfromjsuppliers.jMerchandisersjkeepjanjinventoryjofjprodu
cts,jandjmanagersjarejaccountablejforjthejpurchasing,jstorage,jandjsalejofjthejproducts.jEx-
jamplesjofjmerchandisingjcompaniesjincludejtoyjstores,jgroceryjstores,j andjclothingjstores.
8. Howjdojmanufacturingjcompaniesjdifferjfromjmerchandisingjcompanies?
Merchandisingjcompaniesjreselljproductsjtheyjpreviouslyjboughtjfromjsuppliers,jwhereasjmanufac-
jturingjcompaniesjusejlabor,jequipment,jsupplies,jandjfacilitiesjtojconvertjrawjmaterialsjintojnewjfin-
jishedjproducts.jInjcontrastjtojmerchandisingjcompanies,jmanufacturingjcompaniesjhavejajbroadjrangejofjpro
ductionjactivitiesjthatjrequirejtrackingjcostsjonjthreejkindsjofjinventory.
Horngren's Accounting, The Managerial Chapters, 14th Edition
By Tracie Miller-Nobles Brenda Mattison, All Chapters 1 - 9
,Table of contents
j j
1. Introduction to Managerial Accounting
j j j
2. Job Order Costing
j j
3. Process Costing j
4. Cost-Volume-Profit Analysis j
5. Master Budgets
j
6. Flexible Budgets and Standard Cost Systems
j j j j j
7. Cost Allocation and Responsibility Accounting
j j j j
8. Short-Term Business Decisions j j
9. Capital Investment Decisions
j j
,Chapter M:1 j
Introduction to Managerial Accounting
j j j
Review Questions
j
1. Whatjisjthejprimaryjpurposejofjmanagerialjaccounting?
Thejprimaryjpurposejofjmanagerialjaccountingjisjtojprovidejinformationjtojhelpjmanagersjplan,jdirect,jc
ontrol,jandjmakejdecisions.
2. Listjsixjdifferencesjbetweenjfinancialjaccountingjandjmanagerialjaccounting.
Financialjaccountingjandjmanagerialjaccountingjdifferjonjthejfollowingj6jdimensions:j(1)jprimaryjusers,j(2)jp
urposejofjinformation,j(3)jfocusjandjtimejdimensionjofjthejinformation,j(4)jrulesjandjre-
jstrictions,j(5)jscopejofjinformation,jandj(6)jbehavioral.
3. Explainjthejdifferencejbetweenjlinejpositionsjandjstaffjpositions.
Linejpositionsjarejdirectlyjinvolvedjinjprovidingjgoodsjorjservicesjtojcustomers.jStaffjpositionsjsupportjl
inejpositions.
4. Explainjthejdifferencesjbetweenjplanning,jdirecting,jandjcontrolling.
Planningjmeansjchoosingjgoalsjandjdecidingjhowjtojachievejthem.jDirectingjinvolvesjrunningjthejday-to-
dayjoperationsjofjajbusiness.jControllingjisjthejprocessjofjmonitoringjoperationsjandjkeepingjthejcompanyjon
jtrack.
5. ListjthejfourjIMAjstandardsjofjethicaljpracticejandjbrieflyjdescribejeach.
ThejfourjIMAjstandardsjofjethicaljpracticejandjajdescriptionjofjeachjfollow.
I. Competence.
Maintainjanjappropriatejleveljofjprofessionaljleadershipjandjexpertisejbyjenhancingjknowle
dgejandjskills.
Performjprofessionaljdutiesjinjaccordancejwithjrelevantjlaws,jregulations,jandjtechnicaljstandar
ds.
Providejdecisionjsupportjinformationjandjrecommendationsjthatjarejaccurate,jclear,jconcise,
, andjtimely.
Recognisejandjhelpjmangejrisk.
II. Confidentiality.
Keepjinformationjconfidentialjexceptjwhenjdisclosurejisjauthorizedjorjlegallyjrequired.
Informjalljrelevantjpartiesjregardingjappropriatejusejofjconfidentialjinformation.j Monitorjtojensurej
compliance.
Refrainjfromjusingjconfidentialjinformationjforjunethicaljorjillegaljadvantage.
III. Integrity.
Mitigatejactualjconflictsjofjinterest.jRegularlyjcommunicatejwithjbusinessjassociatesjtojavoidjapparent
jconflictsjofjinterest.jjAdvisejalljpartiesjofjanyjpotentialjconflicts.
Refrainjfromjengagingjinjanyjconductjthatjwouldjprejudicejcarryingjoutjdutiesjethically.
Abstainjfromjengagingjinjorjsupportingjanyjactivityjthatjmightjdiscreditjthejprofession.
Contributejtojajpositivejethicaljculturejandjplacejintegrityjofjthejprofessionjabovejpersonaljinterest.
5,jcont.
IV. Credibility.
Communicatejinformationjfairlyjandjobjectively.
Providejalljrelevantjinformationjthatjcouldjreasonablyjbejexpectedjtojinfluencejanjintendedjuser’sju
nderstandingjofjthejreports,janalyses,jorjrecommendations.
Reportjanyjdelaysjorjdeficienciesjinjinformation,jtimeliness,jprocessing,jorjinternaljcontrolsjinjconfo
rmancejwithjorganizationjpolicyjand/orjapplicablejlaw.
Communicatejanyjprofessionaljlimitationsjorjotherjconstraintsjthatjwouldjprecludejresponsi-
jblejjudgmentjorjsuccessfuljperformancejofjanjactivity.
6. Describejajservicejcompanyjandjgivejanjexample.
Servicejcompaniesjselljtime,jskills,jandjknowledge.jExamplesjofjservicejcompaniesjincludejphonejservicejco
mpanies,jbanks,jcleaningjservicejcompanies,jaccountingjfirms,jlawjfirms,jmedicaljphysi-
jcians,jandjonlinejauctionjservices.
7. Describejajmerchandisingjcompanyjandjgivejanjexample.
Merchandisingjcompaniesjreselljproductsjtheyjbuyjfromjsuppliers.jMerchandisersjkeepjanjinventoryjofjprodu
cts,jandjmanagersjarejaccountablejforjthejpurchasing,jstorage,jandjsalejofjthejproducts.jEx-
jamplesjofjmerchandisingjcompaniesjincludejtoyjstores,jgroceryjstores,j andjclothingjstores.
8. Howjdojmanufacturingjcompaniesjdifferjfromjmerchandisingjcompanies?
Merchandisingjcompaniesjreselljproductsjtheyjpreviouslyjboughtjfromjsuppliers,jwhereasjmanufac-
jturingjcompaniesjusejlabor,jequipment,jsupplies,jandjfacilitiesjtojconvertjrawjmaterialsjintojnewjfin-
jishedjproducts.jInjcontrastjtojmerchandisingjcompanies,jmanufacturingjcompaniesjhavejajbroadjrangejofjpro
ductionjactivitiesjthatjrequirejtrackingjcostsjonjthreejkindsjofjinventory.
