TEST BANK For Financial and Managerial Accounting: Managerial Chapters, 7th Edition (Miller-Nobles)Verified Chapters 1 - 11, Complete Newest Version

Solution Manual for
Horngren's Managerial Chapters Accounting, 7th Edition by Tracie
Chapter 1-11 RC




Chapter 1 RC




Introduction to Managerial Accounting RC RC RC




Review Questions RC




1. The primary purpose of managerial accounting is to provide information to help mana
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gers plan,direct, control, and make decisions.
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2. Financial accounting and managerial accounting differ on the following 6 dimensions: (1)
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primaryusers, (2) purpose of information, (3) focus and time dimension of the information,
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(4) rules and 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 p
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ositionssupport line positions. R
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4. Planning means choosing goals and deciding how to achieve them. Directing involves runn
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ing the day-to-
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day operations of a business. Controlling is the process of monitoring operations and keepi
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ngthe company 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 en
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hancingknowledge and skills. R
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Perform professional duties in accordance with relevant laws, regulations, and t
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, echnicalstandards. R
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Provide decision support information and recommendations that are accurate, clear
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, concise,and timely.
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Recognise and help mange risk. RC RC RC RC




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. M
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onitor toensure 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
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to avoidapparent 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 ethicall
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y.
Abstain from engaging in or supporting any activity that might discredit the profession
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.




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, Contribute to a positive ethical culture and place integrity of the profession above
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personalinterest. R
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5, cont.
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IV. Credibility.
Communicate information fairly and objectively. RC RC RC RC




Provide all relevant information that could reasonably be expected to influence an i
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ntendeduser’s understanding of the reports, analyses, or recommendations.
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Report any delays or deficiencies in information, timeliness, processing, or internal c
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ontrolsin conformance with organization policy and/or applicable law.
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Communicate any professional limitations or other constraints that would preclude
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responsi-ble judgment or successful performance of an activity.
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6. Service companies sell time, skills, and knowledge. Examples of service companies includ
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e phoneservice companies, banks, cleaning service companies, accounting firms, law firms
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, medical physicians, and online auction services.
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7. Merchandising companies resell products they buy from suppliers. Merchandisers keep an i
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nventoryof products, and managers are accountable for the purchasing, storage, and sale of
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RC the products. Examples of merchandising companies include toy stores, grocery stores, and
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clothing stores.
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8. Merchandising companies resell products they previously bought from suppliers, whereas
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manufacturing companies use labor, equipment, supplies, and facilities to convert raw mat
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erials intonew finished products. In contrast to merchandising companies, manufacturing c
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ompanies have a broad range of production activities that require tracking costs on three ki
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nds of inventory.
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, 9. The three inventory accounts used by manufacturing companies are Raw Materials Inventor
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y, Work-in-Process Inventory, and Finished Goods Inventory.
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Raw Materials Inventory includes materials used to manufacture a product. Work-in-
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ProcessInventory includes goods that have been started in the manufacturing process
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but are not yet complete. Finished Goods Inventory includes completed goods that h
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ave not yet been sold.
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10. A direct cost is a cost that can be easily and cost-
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effectively traced to a cost object (which is anything for which managers want a separate
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measurement of cost). An indirect cost is a cost thatcannot be easily or cost-
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effectively traced to a cost object. RC RC RC RC RC




11. The three manufacturing costs for a manufacturing company are direct materials, direct lab
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or, and manufacturing overhead. Direct materials are materials that become a physical part
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of a finished product and whose costs are easily traceable to the finished product. Direct la
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bor is the labor cost ofthe employees who convert materials into finished products. Manuf
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acturing overhead includes all RC RC RC




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