SOLUTION MANUAL
Horngren's Accounting, 13th Edition Managerial
by Tracie Miller-Nobles, Brenda Mattison, All Chapter 1-9
,THE MANAGERIAL CHAPTERS
l2 l2
1. Introduction to Managerial Accounting
l2 l2 l2
2. Job Order Costing
l2 l2
3. Process Costing
l2
4. Cost-Volume-Profit Analysis l2
5. Master Budgetsl2
6. Flexible Budgets and Standard Cost Systems
l2 l2 l2 l2 l2
7. Cost Allocation and Responsibility Accounting
l2 l2 l2 l2
8. Short-Term Business Decisions
l2 l2
9. Capital Investment Decisions
l2 l2
,Chapter 1 l2
Introduction to Managerial Accounting
l2 l2 l2
Review Questions
l2 l2
1. Thel2primaryl2purposel2ofl2manageriall2accountingl2isl2tol2providel2informationl2tol2helpl2managers
l2plan,l 2 direct,l2control,l2andl2makel2decisions.
2. Financiall2accountingl2andl2manageriall2accountingl2differl2onl2thel2followingl26l2dimensions:l2(1)l2pri
maryl 2 users,l2(2)l2purposel2ofl2information,l2(3)l2focusl2andl2timel2dimensionl2ofl2thel2information,l2(4
)l2rulesl2andl 2 restrictions,l2(5)l2scopel2ofl2information,l2andl2(6)l2behavioral.
3. Linel2positionsl2arel2directlyl2involvedl2inl2providingl2goodsl2orl2servicesl2tol2customers.l2Staffl2positi
onsl 2 supportl2linel2positions.
4. Planningl2meansl2choosingl2goalsl2andl2decidingl2howl2tol2achievel2them.l2Directingl2involvesl2runningl2thel2
day-l 2 to-
dayl2operationsl2ofl2al2business.l2Controllingl2isl2thel2processl2ofl2monitoringl2operationsl2andl2keepingthel
2 companyl2onl2track.
5. Thel2fourl2IMAl2standardsl2ofl2ethicall2practicel2andl2al2descriptionl2ofl2eachl2follow.
I. Competence.
Maintainl2anl2appropriatel2levell2ofl2professionall2leadershipl2andl2expertisel2byl2enhanci
ngl 2 knowledgel2andl2skills.
Performl2professionall2dutiesl2inl2accordancel2withl2relevantl2laws,l2regulations,l2andl2techn
icall 2 standards.
Providel2decisionl2supportl2informationl2andl2recommendationsl2thatl2arel2accurate,l2clear,l2conci
se,l 2 andl2timely.
Recognisel2andl2helpl2mangel2risk.
II. Confidentiality.
Keepl2informationl2confidentiall2exceptl2whenl2disclosurel2isl2authorizedl2orl2legallyl2required.l
2 Informl2alll2relevantl2partiesl2regardingl2appropriatel2usel2ofl2confidentiall2information.l 2 Mon
itorl2tol 2 ensurel2compliance.
l2Refrainl2froml2usingl2confidentiall2informationl2forl2unethicall2orl2illegall2advantage.
III. Integrity.
Mitigatel2actuall2conflictsl2ofl2interest.l2Regularlyl2communicatel2withl2businessl2associatesl2tol2avoid
l 2 apparentl2conflictsl2ofl2interest.l 2 Advisel2alll2partiesl2ofl2anyl2potentiall2conflicts.
Refrainl2froml2engagingl2inl2anyl2conductl2thatl2wouldl2prejudicel2carryingl2outl2dutiesl2ethically.
, Abstainl2froml2engagingl2inl2orl2supportingl2anyl2activityl2thatl2mightl2discreditl2thel2profession.
l 2 Contributel2tol2al2positivel2ethicall2culturel2andl2placel2integrityl2ofl2thel2professionl2abovel2p
ersonall 2 interest.
5,l2cont
.
IV. Credibility.
Communicatel2informationl2fairlyl2andl2objectively.
Providel2alll2relevantl2informationl2thatl2couldl2reasonablyl2bel2expectedl2tol2influencel2anl2intend
edl 2 user’sl2understandingl2ofl2thel2reports,l2analyses,l2orl2recommendations.
Reportl2anyl2delaysl2orl2deficienciesl2inl2information,l2timeliness,l2processing,l2orl2internall2controlsi
nl 2 conformancel2withl2organizationl2policyl2and/orl2applicablel2law.
Communicatel2anyl2professionall2limitationsl2orl2otherl2constraintsl2thatl2wouldl2precludel2responsi
-l 2 blel2judgmentl2orl2successfull2performancel2ofl2anl2activity.
6. Servicel2companiesl2selll2time,l2skills,l2andl2knowledge.l 2 Examplesl2ofl2servicel2companiesl2includel2phone
l 2 servicel2companies,l2banks,l2cleaningl2servicel2companies,l2accountingl2firms,l2lawl2firms,l2medicall2physi
cians,l 2 andl2onlinel2auctionl2services.
7. Merchandisingl2companiesl2reselll2productsl2theyl2buyl2froml2suppliers.l2Merchandisersl2keepl2anl2inventory
ofl 2 products,l2andl2managersl2arel2accountablel2forl2thel2purchasing,l2storage,l2andl2salel2ofl2thel2product
s.l2Examplesl 2 ofl2merchandisingl2companiesl2includel2toyl2stores,l2groceryl2stores,l2andl2clothingl2stores.
8. Merchandisingl2companiesl2reselll2productsl2theyl2previouslyl2boughtl2froml2suppliers,l2whereasl 2 manu
facturingl2companiesl2usel2labor,l2equipment,l2supplies,l2andl2facilitiesl2tol2convertl2rawl2materialsl2intol
2 newl2finishedl2products.l2Inl2contrastl2tol2merchandisingl2companies,l2manufacturingl2companiesl2havel
2al 2 broadl2rangel2ofl2productionl2activitiesl2thatl2requirel2trackingl2costsl2onl2threel2kindsl2ofl2inventory
.
9. Thel2threel2inventoryl2accountsl2usedl2byl2manufacturingl2companiesl2arel2Rawl2Materialsl2Inventory,l2Work
-in-l 2 Processl2Inventory,l2andl2Finishedl2Goodsl2Inventory.
Rawl2Materialsl2Inventoryl2includesl2materialsl2usedl2tol2manufacturel2al2product.l2Work-in-
ProcessInventoryl 2 includesl2goodsl2thatl2havel2beenl2startedl2inl2thel2manufacturingl2processl2butl2arel2notl
2yetl2complete.l 2 Finishedl 2 Goodsl2Inventoryl2includesl2completedl2goodsl2thatl2havel2notl2yetl2beenl2sold.
10. Al2directl2costl2isl2al2costl2thatl2canl2bel2easilyl2andl2cost-
effectivelyl2tracedl2tol2al2costl2objectl2(whichl2isl2anythingl 2 forl2whichl2managersl2wantl2al2separatel2me
asurementl2ofl2cost).l2Anl2indirectl2costl2isl2al2costl2thatcannotl2bel 2 easilyl2orl2cost-
effectivelyl2tracedl2tol2al2costl2object.
11. Thel2threel2manufacturingl2costsl2forl2al2manufacturingl2companyl2arel2directl2materials,l2directl2labor,l2a
ndl 2 manufacturingl2overhead.l2Directl2materialsl2arel2materialsl2thatl2becomel2al2physicall2partl2ofl2al2fi
nishedl 2 productl2andl2whosel2costsl2arel2easilyl2traceablel2tol2thel2finishedl2product.l 2 Directl2laborl2isl2th
el2laborl2costl2ofl 2 thel2employeesl2whol2convertl2materialsl2intol2finishedl2products.l2Manufacturingl2over
headl2includesl2alll 2 manufacturingl2costsl2exceptl2directl2materialsl2andl2directl2labor,l2suchl2asl2indirectl2
materials,l2indirectl2labor,l 2 factoryl2depreciation,l2factoryl2rent,l2andl2factoryl2propertyl2taxes.
Horngren's Accounting, 13th Edition Managerial
by Tracie Miller-Nobles, Brenda Mattison, All Chapter 1-9
,THE MANAGERIAL CHAPTERS
l2 l2
1. Introduction to Managerial Accounting
l2 l2 l2
2. Job Order Costing
l2 l2
3. Process Costing
l2
4. Cost-Volume-Profit Analysis l2
5. Master Budgetsl2
6. Flexible Budgets and Standard Cost Systems
l2 l2 l2 l2 l2
7. Cost Allocation and Responsibility Accounting
l2 l2 l2 l2
8. Short-Term Business Decisions
l2 l2
9. Capital Investment Decisions
l2 l2
,Chapter 1 l2
Introduction to Managerial Accounting
l2 l2 l2
Review Questions
l2 l2
1. Thel2primaryl2purposel2ofl2manageriall2accountingl2isl2tol2providel2informationl2tol2helpl2managers
l2plan,l 2 direct,l2control,l2andl2makel2decisions.
2. Financiall2accountingl2andl2manageriall2accountingl2differl2onl2thel2followingl26l2dimensions:l2(1)l2pri
maryl 2 users,l2(2)l2purposel2ofl2information,l2(3)l2focusl2andl2timel2dimensionl2ofl2thel2information,l2(4
)l2rulesl2andl 2 restrictions,l2(5)l2scopel2ofl2information,l2andl2(6)l2behavioral.
3. Linel2positionsl2arel2directlyl2involvedl2inl2providingl2goodsl2orl2servicesl2tol2customers.l2Staffl2positi
onsl 2 supportl2linel2positions.
4. Planningl2meansl2choosingl2goalsl2andl2decidingl2howl2tol2achievel2them.l2Directingl2involvesl2runningl2thel2
day-l 2 to-
dayl2operationsl2ofl2al2business.l2Controllingl2isl2thel2processl2ofl2monitoringl2operationsl2andl2keepingthel
2 companyl2onl2track.
5. Thel2fourl2IMAl2standardsl2ofl2ethicall2practicel2andl2al2descriptionl2ofl2eachl2follow.
I. Competence.
Maintainl2anl2appropriatel2levell2ofl2professionall2leadershipl2andl2expertisel2byl2enhanci
ngl 2 knowledgel2andl2skills.
Performl2professionall2dutiesl2inl2accordancel2withl2relevantl2laws,l2regulations,l2andl2techn
icall 2 standards.
Providel2decisionl2supportl2informationl2andl2recommendationsl2thatl2arel2accurate,l2clear,l2conci
se,l 2 andl2timely.
Recognisel2andl2helpl2mangel2risk.
II. Confidentiality.
Keepl2informationl2confidentiall2exceptl2whenl2disclosurel2isl2authorizedl2orl2legallyl2required.l
2 Informl2alll2relevantl2partiesl2regardingl2appropriatel2usel2ofl2confidentiall2information.l 2 Mon
itorl2tol 2 ensurel2compliance.
l2Refrainl2froml2usingl2confidentiall2informationl2forl2unethicall2orl2illegall2advantage.
III. Integrity.
Mitigatel2actuall2conflictsl2ofl2interest.l2Regularlyl2communicatel2withl2businessl2associatesl2tol2avoid
l 2 apparentl2conflictsl2ofl2interest.l 2 Advisel2alll2partiesl2ofl2anyl2potentiall2conflicts.
Refrainl2froml2engagingl2inl2anyl2conductl2thatl2wouldl2prejudicel2carryingl2outl2dutiesl2ethically.
, Abstainl2froml2engagingl2inl2orl2supportingl2anyl2activityl2thatl2mightl2discreditl2thel2profession.
l 2 Contributel2tol2al2positivel2ethicall2culturel2andl2placel2integrityl2ofl2thel2professionl2abovel2p
ersonall 2 interest.
5,l2cont
.
IV. Credibility.
Communicatel2informationl2fairlyl2andl2objectively.
Providel2alll2relevantl2informationl2thatl2couldl2reasonablyl2bel2expectedl2tol2influencel2anl2intend
edl 2 user’sl2understandingl2ofl2thel2reports,l2analyses,l2orl2recommendations.
Reportl2anyl2delaysl2orl2deficienciesl2inl2information,l2timeliness,l2processing,l2orl2internall2controlsi
nl 2 conformancel2withl2organizationl2policyl2and/orl2applicablel2law.
Communicatel2anyl2professionall2limitationsl2orl2otherl2constraintsl2thatl2wouldl2precludel2responsi
-l 2 blel2judgmentl2orl2successfull2performancel2ofl2anl2activity.
6. Servicel2companiesl2selll2time,l2skills,l2andl2knowledge.l 2 Examplesl2ofl2servicel2companiesl2includel2phone
l 2 servicel2companies,l2banks,l2cleaningl2servicel2companies,l2accountingl2firms,l2lawl2firms,l2medicall2physi
cians,l 2 andl2onlinel2auctionl2services.
7. Merchandisingl2companiesl2reselll2productsl2theyl2buyl2froml2suppliers.l2Merchandisersl2keepl2anl2inventory
ofl 2 products,l2andl2managersl2arel2accountablel2forl2thel2purchasing,l2storage,l2andl2salel2ofl2thel2product
s.l2Examplesl 2 ofl2merchandisingl2companiesl2includel2toyl2stores,l2groceryl2stores,l2andl2clothingl2stores.
8. Merchandisingl2companiesl2reselll2productsl2theyl2previouslyl2boughtl2froml2suppliers,l2whereasl 2 manu
facturingl2companiesl2usel2labor,l2equipment,l2supplies,l2andl2facilitiesl2tol2convertl2rawl2materialsl2intol
2 newl2finishedl2products.l2Inl2contrastl2tol2merchandisingl2companies,l2manufacturingl2companiesl2havel
2al 2 broadl2rangel2ofl2productionl2activitiesl2thatl2requirel2trackingl2costsl2onl2threel2kindsl2ofl2inventory
.
9. Thel2threel2inventoryl2accountsl2usedl2byl2manufacturingl2companiesl2arel2Rawl2Materialsl2Inventory,l2Work
-in-l 2 Processl2Inventory,l2andl2Finishedl2Goodsl2Inventory.
Rawl2Materialsl2Inventoryl2includesl2materialsl2usedl2tol2manufacturel2al2product.l2Work-in-
ProcessInventoryl 2 includesl2goodsl2thatl2havel2beenl2startedl2inl2thel2manufacturingl2processl2butl2arel2notl
2yetl2complete.l 2 Finishedl 2 Goodsl2Inventoryl2includesl2completedl2goodsl2thatl2havel2notl2yetl2beenl2sold.
10. Al2directl2costl2isl2al2costl2thatl2canl2bel2easilyl2andl2cost-
effectivelyl2tracedl2tol2al2costl2objectl2(whichl2isl2anythingl 2 forl2whichl2managersl2wantl2al2separatel2me
asurementl2ofl2cost).l2Anl2indirectl2costl2isl2al2costl2thatcannotl2bel 2 easilyl2orl2cost-
effectivelyl2tracedl2tol2al2costl2object.
11. Thel2threel2manufacturingl2costsl2forl2al2manufacturingl2companyl2arel2directl2materials,l2directl2labor,l2a
ndl 2 manufacturingl2overhead.l2Directl2materialsl2arel2materialsl2thatl2becomel2al2physicall2partl2ofl2al2fi
nishedl 2 productl2andl2whosel2costsl2arel2easilyl2traceablel2tol2thel2finishedl2product.l 2 Directl2laborl2isl2th
el2laborl2costl2ofl 2 thel2employeesl2whol2convertl2materialsl2intol2finishedl2products.l2Manufacturingl2over
headl2includesl2alll 2 manufacturingl2costsl2exceptl2directl2materialsl2andl2directl2labor,l2suchl2asl2indirectl2
materials,l2indirectl2labor,l 2 factoryl2depreciation,l2factoryl2rent,l2andl2factoryl2propertyl2taxes.
