Solutions Manual ii
Managerial Accounting: Creating Value in a Dynamic
ii ii ii ii ii ii
Business Environment, 13th Edition by Hilton
ii ii ii ii ii ii
Chapters 1 - 17 Complete
ii ii ii ii ii
,TABLE OF CONTENTS ii ii
Chapter 1: The Changing Role Of Managerial Accounting In A Dynamic BusinessEnvironment iichapter
2: Basic Cost Management Concepts
Chapter 3: Product Costing And Cost Accumulation In A Batch Production Environment Chapter 4:
Process Costing And Hybrid Product-Costing Systems
Chapter 5: Activity-Based Costing And Management Chapter 6:
Activity Analysis, Cost Behavior, And Cost Estimation iichapter 7:
Cost-Volume-Profit Analysis
Chapter 8: Variable Costing And The Measurement Of ESG And Quality CostsChapter
9: Financial Planning And Analysis: The Master Budget
Chapter 10: Standard Costing And Analysis Of Direct Costs
Chapter 11: Flexible Budgeting And The Management Of Overhead And Support ActivityCostsiichapter
12: Responsibility Accounting And The Balanced Scorecard
Chapter 13: Investment Centers And Transfer Pricing Chapter
14: Decision Making: Relevant Costs And Benefits Chapter 15:
Target Costing And Cost Analysis For Pricing Decisionsiichapter 16:
Capital Expenditure Decisions
Chapter 17: Allocation Of Support Activity Costs And Joint Costs
Appendix I: The Sarbanes-Oxley Act, Internal Controls, And Management Accounting iiappendixII:
Compound Interest And The Concept Of Present Value
Appendix III: Inventory Management
,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 An d Standards To Lead A Class Discussion. The Discussion Can
Also Ran ge To Co nsideration Of H ow 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 Co ns Of The Procedures That IMA S uggests For Its Mem bers When
They Believe They Know About Ethical Lapses In Their Organizations.
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 Paper Work. Millions Of Transactions Between Businesses Are
Now Being Conducted Electronically With No Hard-Copy Documentation. Alon g Withthis
Metho d Of Com mu nicating 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 Com puting Data Centers, A nd Wh ile M oving 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 Con ducted. In Addition, There Will Be Dramatic Changes In
The Way Managerial Accounting Procedures Are Carried Out, One Example Bein g Clo ud -
Based Bu dgeting, W hich Is The Enterprise -Wide A nd Electronic Co mpletion Of A Co mpany‘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 Pr oducts. Amazon Is Also Famous (Infamo us) For Wanting To Have
Every Product In The World On Its Site.
(b) American Red Cross: (1) To Raise Funds Fro m 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 Co mpany's Stockh olders, An d (2) To Pr ovide 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, A nd
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 Poll ution As
Possible, And (2) To Pr ovide Pu blic Safety, Police, And Fire Protection T o 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 Ofanticipated Operations.
(c) Directing Operations: Running The Organization On A Day-To-Day Basis.
(d) Controllin g: Ensurin g That The Organization Operates In The Intended
Manner Andia chieves Its Goals.
Managerial Accounting: Creating Value in a Dynamic
ii ii ii ii ii ii
Business Environment, 13th Edition by Hilton
ii ii ii ii ii ii
Chapters 1 - 17 Complete
ii ii ii ii ii
,TABLE OF CONTENTS ii ii
Chapter 1: The Changing Role Of Managerial Accounting In A Dynamic BusinessEnvironment iichapter
2: Basic Cost Management Concepts
Chapter 3: Product Costing And Cost Accumulation In A Batch Production Environment Chapter 4:
Process Costing And Hybrid Product-Costing Systems
Chapter 5: Activity-Based Costing And Management Chapter 6:
Activity Analysis, Cost Behavior, And Cost Estimation iichapter 7:
Cost-Volume-Profit Analysis
Chapter 8: Variable Costing And The Measurement Of ESG And Quality CostsChapter
9: Financial Planning And Analysis: The Master Budget
Chapter 10: Standard Costing And Analysis Of Direct Costs
Chapter 11: Flexible Budgeting And The Management Of Overhead And Support ActivityCostsiichapter
12: Responsibility Accounting And The Balanced Scorecard
Chapter 13: Investment Centers And Transfer Pricing Chapter
14: Decision Making: Relevant Costs And Benefits Chapter 15:
Target Costing And Cost Analysis For Pricing Decisionsiichapter 16:
Capital Expenditure Decisions
Chapter 17: Allocation Of Support Activity Costs And Joint Costs
Appendix I: The Sarbanes-Oxley Act, Internal Controls, And Management Accounting iiappendixII:
Compound Interest And The Concept Of Present Value
Appendix III: Inventory Management
,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 An d Standards To Lead A Class Discussion. The Discussion Can
Also Ran ge To Co nsideration Of H ow 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 Co ns Of The Procedures That IMA S uggests For Its Mem bers When
They Believe They Know About Ethical Lapses In Their Organizations.
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 Paper Work. Millions Of Transactions Between Businesses Are
Now Being Conducted Electronically With No Hard-Copy Documentation. Alon g Withthis
Metho d Of Com mu nicating 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 Com puting Data Centers, A nd Wh ile M oving 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 Con ducted. In Addition, There Will Be Dramatic Changes In
The Way Managerial Accounting Procedures Are Carried Out, One Example Bein g Clo ud -
Based Bu dgeting, W hich Is The Enterprise -Wide A nd Electronic Co mpletion Of A Co mpany‘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 Pr oducts. Amazon Is Also Famous (Infamo us) For Wanting To Have
Every Product In The World On Its Site.
(b) American Red Cross: (1) To Raise Funds Fro m 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 Co mpany's Stockh olders, An d (2) To Pr ovide 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, A nd
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 Poll ution As
Possible, And (2) To Pr ovide Pu blic Safety, Police, And Fire Protection T o 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 Ofanticipated Operations.
(c) Directing Operations: Running The Organization On A Day-To-Day Basis.
(d) Controllin g: Ensurin g That The Organization Operates In The Intended
Manner Andia chieves Its Goals.
