SOLUTION MANUAL
Horngren's Accounting, 13th Edition Managerial
by Tracie Miller-Nobles, Brenda Mattison, All Chapter 1-9
,THE MANAGERIAL CHAPTERS
1. Introduction to Managerial Accounting
2. Job Order Costing
3. Process Costing
4. Cost-Volume-Profit Analysis
5. Master Budgets
6. Flexible Budgets and Standard Cost Systems
7. Cost Allocation and Responsibility Accounting
8. Short-Term Business Decisions
9. Capital Investment Decisions
,Chapter 1
Introduction to Managerial Accounting
Review Questions
1. The primary purpose of managerial accounting is to provide information to help managers
plan, direct, control, and make decisions.
2. Financial accounting and managerial accounting differ on the following 6 dimensions: (1)
primary users, (2) purpose of information, (3) focus and time dimension of the information, (4)
rules and restrictions, (5) scope of information, and (6) behavioral.
3. Line positions are directly involved in providing goods or services to customers. Staff positions
support line positions.
4. Planning means choosing goals and deciding how to achieve them. Directing involves running the
day- to-day operations of a business. Controlling is the process of monitoring operations and
keepingthe company on track.
5. The four IMA standards of ethical practice and a description of each follow.
I. Competence.
Maintain an appropriate level of professional leadership and expertise by enhancing
knowledge and skills.
Perform professional duties in accordance with relevant laws, regulations, and
technical standards.
Provide decision support information and recommendations that are accurate, clear,
concise, and timely.
Recognise and help mange risk.
II. Confidentiality.
Keep information confidential except when disclosure is authorized or legally required.
Inform all relevant parties regarding appropriate use of confidential information. Monitor
to ensure compliance.
Refrain from using confidential information for unethical or illegal advantage.
III. Integrity.
Mitigate actual conflicts of interest. Regularly communicate with business associates to avoid
apparent conflicts of interest. Advise all parties of any potential conflicts.
Refrain from engaging in any conduct that would prejudice carrying out duties ethically.
, Abstain from aengaging ain aor asupporting aany aactivity athat amight adiscredit athe
aprofession. a Contribute ato aa apositive aethical aculture aand aplace aintegrity aof athe
aprofession aabove apersonal a interest.
5, cont.
IV. Credibility.
Communicate ainformation afairly aand aobjectively.
Provide aall arelevant ainformation athat acould areasonably abe aexpected ato ainfluence aan
aintended a user’s aunderstanding aof athe areports, aanalyses, aor arecommendations.
Report aany adelays aor adeficiencies ain ainformation, atimeliness, aprocessing, aor ainternal
acontrolsin a conformance awith aorganization apolicy aand/or aapplicable alaw.
Communicate aany aprofessional alimitations aor aother aconstraints athat awould apreclude
aresponsi- a ble ajudgment aor asuccessful aperformance aof aan aactivity.
6. Service acompanies asell atime, askills, aand aknowledge. a Examples aof aservice acompanies ainclude
aphone a service acompanies, abanks, acleaning aservice acompanies, aaccounting afirms, alaw afirms,
amedical aphysicians, a and aonline aauction aservices.
7. Merchandising acompanies aresell aproducts athey abuy afrom asuppliers. aMerchandisers akeep aan
ainventoryof a products, aand amanagers aare aaccountable afor athe apurchasing, astorage, aand asale
aof athe aproducts. aExamples a of amerchandising acompanies ainclude atoy astores, agrocery astores,
aand aclothing astores.
8. Merchandising acompanies aresell aproducts athey apreviously abought afrom asuppliers, awhereas
a manufacturing acompanies ause alabor, aequipment, asupplies, aand afacilities ato aconvert araw
amaterials ainto a new afinished aproducts. aIn acontrast ato amerchandising acompanies,
amanufacturing acompanies ahave aa a broad arange aof aproduction aactivities athat arequire
atracking acosts aon athree akinds aof ainventory.
9. The athree ainventory aaccounts aused aby amanufacturing acompanies aare aRaw aMaterials aInventory,
aWork-in- a Process aInventory, aand aFinished aGoods aInventory.
Raw aMaterials aInventory aincludes amaterials aused ato amanufacture aa aproduct. aWork-in-
ProcessInventory a includes agoods athat ahave abeen astarted ain athe amanufacturing aprocess abut
aare anot ayet acomplete. a Finished a Goods aInventory aincludes acompleted agoods athat ahave anot
ayet abeen asold.
10. A adirect acost ais aa acost athat acan abe aeasily aand acost-effectively atraced ato aa acost aobject
a(which ais aanything a for awhich amanagers awant aa aseparate ameasurement aof acost). aAn
aindirect acost ais aa acost athatcannot abe a easily aor acost-effectively atraced ato aa acost aobject.
11. The athree amanufacturing acosts afor aa amanufacturing acompany aare adirect amaterials, adirect
alabor, aand a manufacturing aoverhead. aDirect amaterials aare amaterials athat abecome aa
aphysical apart aof aa afinished a product aand awhose acosts aare aeasily atraceable ato athe afinished
aproduct. a Direct alabor ais athe alabor acost aof a the aemployees awho aconvert amaterials ainto
afinished aproducts. aManufacturing aoverhead aincludes aall a manufacturing acosts aexcept adirect
amaterials aand adirect alabor, asuch aas aindirect amaterials, aindirect alabor, a factory adepreciation,
afactory arent, aand afactory aproperty ataxes.
Horngren's Accounting, 13th Edition Managerial
by Tracie Miller-Nobles, Brenda Mattison, All Chapter 1-9
,THE MANAGERIAL CHAPTERS
1. Introduction to Managerial Accounting
2. Job Order Costing
3. Process Costing
4. Cost-Volume-Profit Analysis
5. Master Budgets
6. Flexible Budgets and Standard Cost Systems
7. Cost Allocation and Responsibility Accounting
8. Short-Term Business Decisions
9. Capital Investment Decisions
,Chapter 1
Introduction to Managerial Accounting
Review Questions
1. The primary purpose of managerial accounting is to provide information to help managers
plan, direct, control, and make decisions.
2. Financial accounting and managerial accounting differ on the following 6 dimensions: (1)
primary users, (2) purpose of information, (3) focus and time dimension of the information, (4)
rules and restrictions, (5) scope of information, and (6) behavioral.
3. Line positions are directly involved in providing goods or services to customers. Staff positions
support line positions.
4. Planning means choosing goals and deciding how to achieve them. Directing involves running the
day- to-day operations of a business. Controlling is the process of monitoring operations and
keepingthe company on track.
5. The four IMA standards of ethical practice and a description of each follow.
I. Competence.
Maintain an appropriate level of professional leadership and expertise by enhancing
knowledge and skills.
Perform professional duties in accordance with relevant laws, regulations, and
technical standards.
Provide decision support information and recommendations that are accurate, clear,
concise, and timely.
Recognise and help mange risk.
II. Confidentiality.
Keep information confidential except when disclosure is authorized or legally required.
Inform all relevant parties regarding appropriate use of confidential information. Monitor
to ensure compliance.
Refrain from using confidential information for unethical or illegal advantage.
III. Integrity.
Mitigate actual conflicts of interest. Regularly communicate with business associates to avoid
apparent conflicts of interest. Advise all parties of any potential conflicts.
Refrain from engaging in any conduct that would prejudice carrying out duties ethically.
, Abstain from aengaging ain aor asupporting aany aactivity athat amight adiscredit athe
aprofession. a Contribute ato aa apositive aethical aculture aand aplace aintegrity aof athe
aprofession aabove apersonal a interest.
5, cont.
IV. Credibility.
Communicate ainformation afairly aand aobjectively.
Provide aall arelevant ainformation athat acould areasonably abe aexpected ato ainfluence aan
aintended a user’s aunderstanding aof athe areports, aanalyses, aor arecommendations.
Report aany adelays aor adeficiencies ain ainformation, atimeliness, aprocessing, aor ainternal
acontrolsin a conformance awith aorganization apolicy aand/or aapplicable alaw.
Communicate aany aprofessional alimitations aor aother aconstraints athat awould apreclude
aresponsi- a ble ajudgment aor asuccessful aperformance aof aan aactivity.
6. Service acompanies asell atime, askills, aand aknowledge. a Examples aof aservice acompanies ainclude
aphone a service acompanies, abanks, acleaning aservice acompanies, aaccounting afirms, alaw afirms,
amedical aphysicians, a and aonline aauction aservices.
7. Merchandising acompanies aresell aproducts athey abuy afrom asuppliers. aMerchandisers akeep aan
ainventoryof a products, aand amanagers aare aaccountable afor athe apurchasing, astorage, aand asale
aof athe aproducts. aExamples a of amerchandising acompanies ainclude atoy astores, agrocery astores,
aand aclothing astores.
8. Merchandising acompanies aresell aproducts athey apreviously abought afrom asuppliers, awhereas
a manufacturing acompanies ause alabor, aequipment, asupplies, aand afacilities ato aconvert araw
amaterials ainto a new afinished aproducts. aIn acontrast ato amerchandising acompanies,
amanufacturing acompanies ahave aa a broad arange aof aproduction aactivities athat arequire
atracking acosts aon athree akinds aof ainventory.
9. The athree ainventory aaccounts aused aby amanufacturing acompanies aare aRaw aMaterials aInventory,
aWork-in- a Process aInventory, aand aFinished aGoods aInventory.
Raw aMaterials aInventory aincludes amaterials aused ato amanufacture aa aproduct. aWork-in-
ProcessInventory a includes agoods athat ahave abeen astarted ain athe amanufacturing aprocess abut
aare anot ayet acomplete. a Finished a Goods aInventory aincludes acompleted agoods athat ahave anot
ayet abeen asold.
10. A adirect acost ais aa acost athat acan abe aeasily aand acost-effectively atraced ato aa acost aobject
a(which ais aanything a for awhich amanagers awant aa aseparate ameasurement aof acost). aAn
aindirect acost ais aa acost athatcannot abe a easily aor acost-effectively atraced ato aa acost aobject.
11. The athree amanufacturing acosts afor aa amanufacturing acompany aare adirect amaterials, adirect
alabor, aand a manufacturing aoverhead. aDirect amaterials aare amaterials athat abecome aa
aphysical apart aof aa afinished a product aand awhose acosts aare aeasily atraceable ato athe afinished
aproduct. a Direct alabor ais athe alabor acost aof a the aemployees awho aconvert amaterials ainto
afinished aproducts. aManufacturing aoverhead aincludes aall a manufacturing acosts aexcept adirect
amaterials aand adirect alabor, asuch aas aindirect amaterials, aindirect alabor, a factory adepreciation,
afactory arent, aand afactory aproperty ataxes.
