,THE MANAGERIAL CHAPTERS
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1. Introduction to Managerial Accounting zi zi zi
2. Job Order Costing
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3. Process Costing zi
4. Cost-Volume-Profit Analysis zi
5. Master Budgets zi
6. Flexible Budgets and Standard Cost Systems
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7. Cost Allocation and Responsibility Accounting
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8. Short-Term Business Decisions zi zi
9. CapitalInvestment Decisions
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,Chapter1 zi
Introductionto ManagerialAccounting zi zi zi
ReviewQuestions zi
1. The primary purpose of managerial accounting is to provide information to help managers plan,dire
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ct, control, and make decisions.
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2. Financial accounting and managerial accounting differ on the following 6 dimensions: (1) primaryusers
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, (2) purpose of information, (3) focus and time dimension of the information, (4) rules and restrictions, (
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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 positionssupp
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ort line positions.
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4. Planning means choosing goals and deciding how to achieve them. Directing involves running the day-to-
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day operations of a business. Controlling is the process of monitoring operations and keepingthe compa
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nyon track.zi zi
5. Thefour 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 enhancingkn zi zi zi zi zi zi zi zi zi zi zi
owledge and skills. zi zi
Perform professional duties in accordance with relevant laws, regulations, and technicalsta zi zi zi zi zi zi zi zi zi zi zi
ndards.
Providedecision support information and recommendations that are accurate, clear, concise,a zi zi zi zi zi zi zi zi zi zi zi
nd timely. zi
Recognise and help mange risk. zi zi zi zi
II. Confidentiality.
Keep information confidential except when disclosure is authorized or legallyrequired. zi zi zi zi zi zi zi zi zi zi
Inform all relevant parties regardingappropriate useof confidential information. Monitor toen zi zi zi zi zi zi zi zi zi z i zi zi
sure compliance. zi
Refrain from usingconfidential information for unethical or illegal advantage. zi zi zi zi zi zi zi zi zi
III. Integrity.
Mitigate actual conflicts of interest. Regularlycommunicate with business associates to avoidapp zi zi zi zi zi zi zi zi zi zi zi zi
arent conflicts of interest. Advise all parties of anypotential conflicts. zi zi zi zizi zi zi zi zi zi zi
Refrain from engagingin anyconduct that would prejudice carryingout duties ethically. zi zi zi zi zi zi zi zi zi zi zi zi
, Abstain from engagingin or supporting anyactivitythat might discredit the profession. zi zi zi zi zi zi zi zi zi zi zi zi
Contribute to a positive ethical culture and place integrityof the profession above personalinte zi zi zi zi zi zi zi zi zi zi zi zi zi zi
rest.
5, cont.
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IV. Credibility.
Communicate information fairlyand objectively. zi zi zi zi
Provide all relevant information that could reasonablybe expected to influence an intendedus zi zi zi zi zi zi zi zi zi zi zi zi zi
er’s understanding of the reports, analyses, or recommendations. zi zi zi zi zi zi zi
Report anydelays or deficiencies in information, timeliness, processing, or internal controlsin c zi zi zi zi zi zi zi zi zi zi zi zi zi
onformance with organization policyand/or applicable law. zi zi zi zi zi zi
Communicate any professional limitations or other constraints that would preclude responsi- zi zi zi zi zi zi zi zi zi zi
ble judgment or successful performance of an activity. zi zi zi zi zi zi zi zi
6. Service companies sell time, skills, and knowledge. Examples of service companies include phoneservi
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ce companies, banks, cleaning service companies, accounting firms, law firms, medical physicians, and
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online auction services. zi zi
7. Merchandising companies resell products they buy from suppliers. Merchandisers keep an inventoryof p zi zi zi zi zi zi zi zi zi zi zi zi zi
roducts, and managers are accountable for the purchasing, storage, and sale of the products. Examples of
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merchandising companies include toy stores, grocerystores, and clothing stores. zi zi zi zi zi zi zi zi zi
8. Merchandising companies resell products they previously bought from suppliers, whereas manufacturi zi zi zi zi zi zi zi zi zi zi
ngcompanies use labor, equipment, supplies, and facilities to convert raw materials intonew finished pr
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oducts. In contrast to merchandising companies, manufacturing companies have a broad range of produ
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ction activities that require tracking costs on three kinds of inventory.
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9. The three inventory accounts used by manufacturing companies are Raw Materials Inventory, Work-in-
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Process Inventory, and Finished Goods Inventory. zi zi zi zi zi
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 but are not yet co
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mplete. Finished Goods Inventoryincludes completed goods that have 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 measuremen zi zi zi zi zi zi zi zi zi zi zi zi zi zi zi
t of cost). An indirect cost is a cost thatcannot be easilyor cost-effectivelytraced to a cost object.
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11. The three manufacturing costs for a manufacturing company are direct materials, direct labor, and manu
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facturing overhead. Direct materials are materials that become a physical part of a finished product and
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whose costs are easilytraceable to the finished product. Direct laboris the labor cost ofthe employees w
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ho convert materials into finished products. Manufacturing overhead includes all manufacturing costs e
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1. Introduction to Managerial Accounting zi zi zi
2. Job Order Costing
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3. Process Costing zi
4. Cost-Volume-Profit Analysis zi
5. Master Budgets zi
6. Flexible Budgets and Standard Cost Systems
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7. Cost Allocation and Responsibility Accounting
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8. Short-Term Business Decisions zi zi
9. CapitalInvestment Decisions
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,Chapter1 zi
Introductionto ManagerialAccounting zi zi zi
ReviewQuestions zi
1. The primary purpose of managerial accounting is to provide information to help managers plan,dire
zi zi zi zi zi zi zi zi zi zi zi zi zi zi
ct, control, and make decisions.
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2. Financial accounting and managerial accounting differ on the following 6 dimensions: (1) primaryusers
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, (2) purpose of information, (3) focus and time dimension of the information, (4) rules and restrictions, (
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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 positionssupp
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ort line positions.
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4. Planning means choosing goals and deciding how to achieve them. Directing involves running the day-to-
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day operations of a business. Controlling is the process of monitoring operations and keepingthe compa
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nyon track.zi zi
5. Thefour IMA standards of ethical practice and a description of each follow.
zi zi zi zi zi zi zi zi zi zi zi zi
I. Competence.
Maintain an appropriate level of professional leadership and expertise by enhancingkn zi zi zi zi zi zi zi zi zi zi zi
owledge and skills. zi zi
Perform professional duties in accordance with relevant laws, regulations, and technicalsta zi zi zi zi zi zi zi zi zi zi zi
ndards.
Providedecision support information and recommendations that are accurate, clear, concise,a zi zi zi zi zi zi zi zi zi zi zi
nd timely. zi
Recognise and help mange risk. zi zi zi zi
II. Confidentiality.
Keep information confidential except when disclosure is authorized or legallyrequired. zi zi zi zi zi zi zi zi zi zi
Inform all relevant parties regardingappropriate useof confidential information. Monitor toen zi zi zi zi zi zi zi zi zi z i zi zi
sure compliance. zi
Refrain from usingconfidential information for unethical or illegal advantage. zi zi zi zi zi zi zi zi zi
III. Integrity.
Mitigate actual conflicts of interest. Regularlycommunicate with business associates to avoidapp zi zi zi zi zi zi zi zi zi zi zi zi
arent conflicts of interest. Advise all parties of anypotential conflicts. zi zi zi zizi zi zi zi zi zi zi
Refrain from engagingin anyconduct that would prejudice carryingout duties ethically. zi zi zi zi zi zi zi zi zi zi zi zi
, Abstain from engagingin or supporting anyactivitythat might discredit the profession. zi zi zi zi zi zi zi zi zi zi zi zi
Contribute to a positive ethical culture and place integrityof the profession above personalinte zi zi zi zi zi zi zi zi zi zi zi zi zi zi
rest.
5, cont.
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IV. Credibility.
Communicate information fairlyand objectively. zi zi zi zi
Provide all relevant information that could reasonablybe expected to influence an intendedus zi zi zi zi zi zi zi zi zi zi zi zi zi
er’s understanding of the reports, analyses, or recommendations. zi zi zi zi zi zi zi
Report anydelays or deficiencies in information, timeliness, processing, or internal controlsin c zi zi zi zi zi zi zi zi zi zi zi zi zi
onformance with organization policyand/or applicable law. zi zi zi zi zi zi
Communicate any professional limitations or other constraints that would preclude responsi- zi zi zi zi zi zi zi zi zi zi
ble judgment or successful performance of an activity. zi zi zi zi zi zi zi zi
6. Service companies sell time, skills, and knowledge. Examples of service companies include phoneservi
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ce companies, banks, cleaning service companies, accounting firms, law firms, medical physicians, and
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online auction services. zi zi
7. Merchandising companies resell products they buy from suppliers. Merchandisers keep an inventoryof p zi zi zi zi zi zi zi zi zi zi zi zi zi
roducts, and managers are accountable for the purchasing, storage, and sale of the products. Examples of
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merchandising companies include toy stores, grocerystores, and clothing stores. zi zi zi zi zi zi zi zi zi
8. Merchandising companies resell products they previously bought from suppliers, whereas manufacturi zi zi zi zi zi zi zi zi zi zi
ngcompanies use labor, equipment, supplies, and facilities to convert raw materials intonew finished pr
zi zi zi zi zi zi zi zi zi zi zi zi zi zi zi
oducts. In contrast to merchandising companies, manufacturing companies have a broad range of produ
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ction activities that require tracking costs on three kinds of inventory.
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9. The three inventory accounts used by manufacturing companies are Raw Materials Inventory, Work-in-
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Process Inventory, and Finished Goods Inventory. zi zi zi zi zi
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 but are not yet co
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mplete. Finished Goods Inventoryincludes completed goods that have 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 measuremen zi zi zi zi zi zi zi zi zi zi zi zi zi zi zi
t of cost). An indirect cost is a cost thatcannot be easilyor cost-effectivelytraced to a cost object.
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11. The three manufacturing costs for a manufacturing company are direct materials, direct labor, and manu
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facturing overhead. Direct materials are materials that become a physical part of a finished product and
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whose costs are easilytraceable to the finished product. Direct laboris the labor cost ofthe employees w
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ho convert materials into finished products. Manufacturing overhead includes all manufacturing costs e
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