Solution Manual For
Introduction to Managerial Accounting
Author: Ganesh Vaidyanathan Peter C. Brewer, Ray H. Garrison
7th Canadian Edition
Solutions Manual, Chapter 2 1
,TABLE OF CONTENT:
Chapter 1 An Introduction to Managerial Accounting
Chapter 2 Cost Concepts
Chapter 3 Systems Design: Job-Order Costing
Chapter 4 Process Costing
Chapter 5 Activity-Based Costing
Chapter 6 Cost Behaviour: Analysis and Use
Chapter 7 Budgeting
Chapter 8 Cost-Volume-Profit Relationships
Chapter 9 Relevant Costs: The Key to Decision Making
Chapter 10 Capital Budgeting Decisions
Chapter 11 Standard Costs and Variance Analysis
Chapter 12 Organizational Structure and Performance Measurement
Chapter 13 “How Well Am I Doing?” – Financial Statement Analysis
Chapter 14 “How Well Am I Doing?” – Cash Flow Statement
2 Introduction to Manag
,Solution Manual For
Introduction To Managerial Accounting 7CE Peter C. Brewer, Ray H. Garrison,
Eric Noreen, Suresh Kalagnanam, Ganesh Vaidyanathan
Chapter 1
An Introduction To Managerial Accounting
Solutions To Questions
1-1 Managerial Accounting Is Concerned With Providing Information Primarily To Managers For
Their Use Internally In The Organization For The Purposes Of Strategy, Planning,
Implementation And Control. Financial Accounting Is Concerned With Providing Information
Primarily To Investors, Creditors, And Others Outside Of The Organization.
1-2 Essentially, The Manager Carries Out Three Major Activities In An Organization: Planning,
Implementation, And Control. All Three Activities Involve Decision- Making And Use
Managerial Accounting Information. This Is Depicted In Exhibit 1-
1.
1-3 The Planning, Implementation And Control Cycle Involves The Following Steps: (
Formulating Plans Which Often Includes Preparing Budgets, (2) Overseeing Day-To- D
Activities Which Includes Organizing, Directing And Motivating People,
Resource Allocation And Decision Making, And (3) Controlling Which Includes Providing
Feedback Via Performance Reports.
1-4 In Contrast To Financial Accounting, Managerial Accounting: (1) Focuses On The Needs Of
The Manager; (2) Places More Emphasis On The Future; (3) Emphasizes Relevance And
Timeliness, Rather Than Verifiability And Precision; (4) Emphasizes The Segments Of An
Organization; (5) Is Not Governed By IFRS Or ASPE; And (6) Is Not Mandatory.
1-5 The Lean Business Model Focuses On Continuous Improvement By Eliminating Waste In
The Organization. Companies That Adopt The Lean Business Model Usually Implement
One Or More Of The Following Management Practices.
• Just-In-Time (JIT): A Production And Inventory Control System In Which Materials
Are Purchased And Units Are Produced Only As Needed To Meet Actual Customer
Demand.
• Total Quality Management (TQM): An Approach To Continuous
Improvement That Focuses On Serving Customers And Uses Teams Of
Front- Line Workers To Systematically Identify And Solve Problems.
• Process Re-Engineering: An Approach To Improvement That
Solutions Manual, Chapter 2 3
, Involves Completely Redesigning Business Processes In Order To
Eliminate Unnecessary Steps, Reduce Errors, And Reduce Costs.
• Theory Of Constraints (TOC): A Management Approach
That Emphasizes The Importance Of Managing Constraints.
1-6 Benefits
• Improves Operational Processes That Makes The Business Efficient
• It Leads To Reduction Or Elimination Of Waste
• It Improves Profitability And Reduces Costs
• It Reduces The Turnaround Time To Fulfill Customer Orders
Improving Customer Satisfaction
Limitations
• Production Schedule Can Get Hampered If Any External Shocks Lead
To Supply Chain Disturbance
• Lean Processes Must Be Complimented With Agile Processes To
Adapt Swiftly To Changing Customer Needs.
1-7 Pros
• Funds Tied Up In Maintaining Inventory Can Be Used Elsewhere
• Areas Previously Used To Store Inventories Are Made Available For
Other More Productive Uses
• The Time Required To Fill An Order Is Reduced, Resulting In Quicker
Response To Customers And Consequentially Greater Potential Sales
• Defect Rates Are Reduced Resulting In Less Waste And Greater
Customer Satisfaction
• More Effective Operations
Cons
• Increased Number Of Purchase Orders To Buy Raw Materials And/Or
Other
Components Used In Manufacturing Products
• There Is Little Room For Errors And Defects In Products Because This
Could Throw The Production Facility Off Schedule
• There Is A High Reliance And Dependence On Suppliers To Meet
Delivery Deadlines As Well As Supply Products That Have No Defects
And Require
Minimal Inspection
1-8 Agree. Ethical Behaviour Is The Foundation Of A Successful Market Economy. If
We Cannot Trust People To Act Ethically In Their Business Dealings With Us, We
Will Be Inclined To Invest Less, Scrutinize More And Waste Money And Time
(Scarce Resources) Trying To Protect Ourselves. Ethical Standards And Codes Of
Conduct
© The Mcgraw-Hill Companies, Inc., 2002. All Rights Reserved.
4 Introduction to Manag
Introduction to Managerial Accounting
Author: Ganesh Vaidyanathan Peter C. Brewer, Ray H. Garrison
7th Canadian Edition
Solutions Manual, Chapter 2 1
,TABLE OF CONTENT:
Chapter 1 An Introduction to Managerial Accounting
Chapter 2 Cost Concepts
Chapter 3 Systems Design: Job-Order Costing
Chapter 4 Process Costing
Chapter 5 Activity-Based Costing
Chapter 6 Cost Behaviour: Analysis and Use
Chapter 7 Budgeting
Chapter 8 Cost-Volume-Profit Relationships
Chapter 9 Relevant Costs: The Key to Decision Making
Chapter 10 Capital Budgeting Decisions
Chapter 11 Standard Costs and Variance Analysis
Chapter 12 Organizational Structure and Performance Measurement
Chapter 13 “How Well Am I Doing?” – Financial Statement Analysis
Chapter 14 “How Well Am I Doing?” – Cash Flow Statement
2 Introduction to Manag
,Solution Manual For
Introduction To Managerial Accounting 7CE Peter C. Brewer, Ray H. Garrison,
Eric Noreen, Suresh Kalagnanam, Ganesh Vaidyanathan
Chapter 1
An Introduction To Managerial Accounting
Solutions To Questions
1-1 Managerial Accounting Is Concerned With Providing Information Primarily To Managers For
Their Use Internally In The Organization For The Purposes Of Strategy, Planning,
Implementation And Control. Financial Accounting Is Concerned With Providing Information
Primarily To Investors, Creditors, And Others Outside Of The Organization.
1-2 Essentially, The Manager Carries Out Three Major Activities In An Organization: Planning,
Implementation, And Control. All Three Activities Involve Decision- Making And Use
Managerial Accounting Information. This Is Depicted In Exhibit 1-
1.
1-3 The Planning, Implementation And Control Cycle Involves The Following Steps: (
Formulating Plans Which Often Includes Preparing Budgets, (2) Overseeing Day-To- D
Activities Which Includes Organizing, Directing And Motivating People,
Resource Allocation And Decision Making, And (3) Controlling Which Includes Providing
Feedback Via Performance Reports.
1-4 In Contrast To Financial Accounting, Managerial Accounting: (1) Focuses On The Needs Of
The Manager; (2) Places More Emphasis On The Future; (3) Emphasizes Relevance And
Timeliness, Rather Than Verifiability And Precision; (4) Emphasizes The Segments Of An
Organization; (5) Is Not Governed By IFRS Or ASPE; And (6) Is Not Mandatory.
1-5 The Lean Business Model Focuses On Continuous Improvement By Eliminating Waste In
The Organization. Companies That Adopt The Lean Business Model Usually Implement
One Or More Of The Following Management Practices.
• Just-In-Time (JIT): A Production And Inventory Control System In Which Materials
Are Purchased And Units Are Produced Only As Needed To Meet Actual Customer
Demand.
• Total Quality Management (TQM): An Approach To Continuous
Improvement That Focuses On Serving Customers And Uses Teams Of
Front- Line Workers To Systematically Identify And Solve Problems.
• Process Re-Engineering: An Approach To Improvement That
Solutions Manual, Chapter 2 3
, Involves Completely Redesigning Business Processes In Order To
Eliminate Unnecessary Steps, Reduce Errors, And Reduce Costs.
• Theory Of Constraints (TOC): A Management Approach
That Emphasizes The Importance Of Managing Constraints.
1-6 Benefits
• Improves Operational Processes That Makes The Business Efficient
• It Leads To Reduction Or Elimination Of Waste
• It Improves Profitability And Reduces Costs
• It Reduces The Turnaround Time To Fulfill Customer Orders
Improving Customer Satisfaction
Limitations
• Production Schedule Can Get Hampered If Any External Shocks Lead
To Supply Chain Disturbance
• Lean Processes Must Be Complimented With Agile Processes To
Adapt Swiftly To Changing Customer Needs.
1-7 Pros
• Funds Tied Up In Maintaining Inventory Can Be Used Elsewhere
• Areas Previously Used To Store Inventories Are Made Available For
Other More Productive Uses
• The Time Required To Fill An Order Is Reduced, Resulting In Quicker
Response To Customers And Consequentially Greater Potential Sales
• Defect Rates Are Reduced Resulting In Less Waste And Greater
Customer Satisfaction
• More Effective Operations
Cons
• Increased Number Of Purchase Orders To Buy Raw Materials And/Or
Other
Components Used In Manufacturing Products
• There Is Little Room For Errors And Defects In Products Because This
Could Throw The Production Facility Off Schedule
• There Is A High Reliance And Dependence On Suppliers To Meet
Delivery Deadlines As Well As Supply Products That Have No Defects
And Require
Minimal Inspection
1-8 Agree. Ethical Behaviour Is The Foundation Of A Successful Market Economy. If
We Cannot Trust People To Act Ethically In Their Business Dealings With Us, We
Will Be Inclined To Invest Less, Scrutinize More And Waste Money And Time
(Scarce Resources) Trying To Protect Ourselves. Ethical Standards And Codes Of
Conduct
© The Mcgraw-Hill Companies, Inc., 2002. All Rights Reserved.
4 Introduction to Manag
