© McGraw Hill LLC. All rights reserved. No reproduction or distribution without the prior written consent of McGraw Hill LLC.
, q
© McGraw Hill LLC. All rights reserved. No reproduction or distribution without the prior written consent of McGraw Hill LLC.
,SOLUTION MANUAL FOR
Managerial Accounting Creating Value in a Dynamic
Business Environment 13e Hilton
Chapter 1-17 With Appendix (I II III)
CHAPTER 1
The Crucial Role of Managerial Accounting in a Dynamic Business
Environment
FOCUS ON ETHICS (Located before the Chapter Summary in the text.)
The focus-on-ethics inset for Chapter 1 is the IMA Statement of Ethical Professional
Practice. Instructors can use this list of ethical principles and standards to lead a class
discussion. The discussion can also range to consideration of how these standards may
have been violated by accountants and managers involved in the various ethical scandals
uncovered over the past several years. It is also useful to discuss the pros and cons of the
procedures for ―Resolving Ethical Issues‖ that IMA suggests for its members when they
believe they know about ethical lapses in their organizations.
We also introduce here the connection to the ―Ethics Unwrapped‖ video series that can
supplement the discussion of ethics in the context of each chapter. In each chapter of the
text, we have suggested topic videos in the series that align with that chapter. Discussion
guidance and questions relating to the videos can be found on the ―Ethics Unwrapped‖ site
at the URL provided. This resource is provided by permission from the University of Texas
at Austin, McCombs School of Business.
ANSWERS TO REVIEW QUESTIONS
1-1 The explosion in e-commerce will affect managers in significant ways. One effect will be
a drastic reduction in paperwork. Millions of transactions between businesses are
conducted electronically with no hard-copy documentation. Along with this method of
communicating for business transactions comes the very significant issue of
information security. Businesses need to find ways to protect confidential information
in their own computers, in cloud computing data centers, and while moving across the
internet, while at the same time sharing the information necessary to complete
transactions. Another effect of e-commerce is the dramatically increased speed with
which business transactions can be conducted. In addition, there will be dramatic
changes in the way managerial accounting procedures are carried out, one example
Managerial Accounting, 13/e 5-1
© McGraw Hill LLC. All rights reserved. No reproduction or distribution without the prior written consent of McGraw Hill LLC.
, being cloud-based budgeting, which is the enterprise-wide and electronic completion of
a company‘s budgeting process using cloud-based software and data storage.
1-2 Plausible goals for the organizations listed are as follows:
(a) Amazon.com: (1) To achieve and maintain profitability, and (2) to grow on-line
sales of their many products. Amazon is also famous (infamous) for wanting to
have every product in the world on its site.
(b) American Red Cross: (1) To raise funds from the general public sufficient to have
resources available to meet any disaster that may occur, and (2) to provide
assistance to people who are victims of a disaster anywhere in the world on
short notice.
(c) General Motors: (1) To earn income sufficient to provide a good return on the
investment of the company's stockholders, and (2) to provide the highest-quality
product possible.
(d) Wal-Mart: (1) To penetrate the retail market in virtually every location in the
United States, and (2) to grow over time in terms of number of retail locations,
total assets, and earnings. Also, to be competitive with Amazon in the e-retail
space.
(e) City of Seattle: (1) To maintain an urban environment as free of pollution as
possible, and (2) to provide public safety, police, and fire protection to the city's
citizens.
(f) Hertz: (1) To be a recognizable household name associated with rental car
services, and (2) to provide reliable and economical transportation services to
the company's customers.
1-3 The four basic management activities are listed and defined as follows:
(a) Decision making: Choosing among the available alternatives.
(b) Planning: Developing a detailed financial and operational description of
anticipated operations.
(c) Directing operations: Running the organization on a day-to-day basis.
(d) Controlling: Ensuring that the organization operates in the intended manner and
achieves its goals.
5-2 Solutions Manual
© McGraw Hill LLC. All rights reserved. No reproduction or distribution without the prior written consent of McGraw Hill LLC.
, q
© McGraw Hill LLC. All rights reserved. No reproduction or distribution without the prior written consent of McGraw Hill LLC.
,SOLUTION MANUAL FOR
Managerial Accounting Creating Value in a Dynamic
Business Environment 13e Hilton
Chapter 1-17 With Appendix (I II III)
CHAPTER 1
The Crucial Role of Managerial Accounting in a Dynamic Business
Environment
FOCUS ON ETHICS (Located before the Chapter Summary in the text.)
The focus-on-ethics inset for Chapter 1 is the IMA Statement of Ethical Professional
Practice. Instructors can use this list of ethical principles and standards to lead a class
discussion. The discussion can also range to consideration of how these standards may
have been violated by accountants and managers involved in the various ethical scandals
uncovered over the past several years. It is also useful to discuss the pros and cons of the
procedures for ―Resolving Ethical Issues‖ that IMA suggests for its members when they
believe they know about ethical lapses in their organizations.
We also introduce here the connection to the ―Ethics Unwrapped‖ video series that can
supplement the discussion of ethics in the context of each chapter. In each chapter of the
text, we have suggested topic videos in the series that align with that chapter. Discussion
guidance and questions relating to the videos can be found on the ―Ethics Unwrapped‖ site
at the URL provided. This resource is provided by permission from the University of Texas
at Austin, McCombs School of Business.
ANSWERS TO REVIEW QUESTIONS
1-1 The explosion in e-commerce will affect managers in significant ways. One effect will be
a drastic reduction in paperwork. Millions of transactions between businesses are
conducted electronically with no hard-copy documentation. Along with this method of
communicating for business transactions comes the very significant issue of
information security. Businesses need to find ways to protect confidential information
in their own computers, in cloud computing data centers, and while moving across the
internet, while at the same time sharing the information necessary to complete
transactions. Another effect of e-commerce is the dramatically increased speed with
which business transactions can be conducted. In addition, there will be dramatic
changes in the way managerial accounting procedures are carried out, one example
Managerial Accounting, 13/e 5-1
© McGraw Hill LLC. All rights reserved. No reproduction or distribution without the prior written consent of McGraw Hill LLC.
, being cloud-based budgeting, which is the enterprise-wide and electronic completion of
a company‘s budgeting process using cloud-based software and data storage.
1-2 Plausible goals for the organizations listed are as follows:
(a) Amazon.com: (1) To achieve and maintain profitability, and (2) to grow on-line
sales of their many products. Amazon is also famous (infamous) for wanting to
have every product in the world on its site.
(b) American Red Cross: (1) To raise funds from the general public sufficient to have
resources available to meet any disaster that may occur, and (2) to provide
assistance to people who are victims of a disaster anywhere in the world on
short notice.
(c) General Motors: (1) To earn income sufficient to provide a good return on the
investment of the company's stockholders, and (2) to provide the highest-quality
product possible.
(d) Wal-Mart: (1) To penetrate the retail market in virtually every location in the
United States, and (2) to grow over time in terms of number of retail locations,
total assets, and earnings. Also, to be competitive with Amazon in the e-retail
space.
(e) City of Seattle: (1) To maintain an urban environment as free of pollution as
possible, and (2) to provide public safety, police, and fire protection to the city's
citizens.
(f) Hertz: (1) To be a recognizable household name associated with rental car
services, and (2) to provide reliable and economical transportation services to
the company's customers.
1-3 The four basic management activities are listed and defined as follows:
(a) Decision making: Choosing among the available alternatives.
(b) Planning: Developing a detailed financial and operational description of
anticipated operations.
(c) Directing operations: Running the organization on a day-to-day basis.
(d) Controlling: Ensuring that the organization operates in the intended manner and
achieves its goals.
5-2 Solutions Manual
© McGraw Hill LLC. All rights reserved. No reproduction or distribution without the prior written consent of McGraw Hill LLC.
