Solution Manual for Cost Accounting With
Integrated Data Analytics 1st Edition
, Chapter 1
Cost Accounting Has Purpose
Note: the end of chapter brief exercises, exercises, and problems are coded K (knowledge), C
(comprehension), AP (application), AN (analysis), S (synthesize), and E (evaluation) according
to the original Blooms Taxonomy published in 1956.
Assignment Classification Table (By Learning Objective)
Brief
Learning Objectives Questions Exercises Exercises Problems
1 Explore the elements that 1, 2, 3, 4 1, 2, 3, 4, 1, 2, 3 1, 2, 3, 4
support a company’s 5,
purpose, as well as your 6
own.
2 Connect the purpose of 5, 6, 7 7, 8, 9 4, 5, 6 5, 6
cost accounting with the
role of accountants in
organizations.
3 Outline the frameworks, 8, 9, 10, 10, 11, 12 7, 8, 7, 8, 9
including ethics, that 11, 9,
guide the profession. 12 10
1-1
© 2022 John Wiley & Sons, Inc. or the author, All rights reserved. Farmer, Cost Accounting, 1e, Job Costing Visualized (For Instructor Use Only)
,Assignment Characteristics Table
Level of Time
Item Description Difficulty (minutes)
E1.1 Get to know the mission and vision of each of Moderate 10–15
the Big 4 firms and their underlying values.
E1.2 Evaluate the state of competition within an Moderate 10–15
industry given a company’s SWOT analysis.
E1.3 Explain how a balanced scorecard reveals a Moderate 10–15
company’s strategy.
E1.4 Get to know how cost accounting skill sets are Moderate 10–15
valued as consulting services in the Big 4.
E1.5 Use the decision-making framework to make a Moderate 10–15
personal decision.
E1.6 Use the decision-making framework to make a Simple 10–15
business decision.
E1.7 Get to know the IMA. Simple 5–10
E1.8 Get to know the continuing education Moderate 10–15
requirements for IMA’s flagship certification.
E1.9 Get to know IMA’s Statement of Ethical Moderate 15–20
Professional Practice.
E1.10 Get to know the AICPA.
Simple 5–10
P1.1 What is your own personal purpose? Simple 5–10
P1.2 What are your goals in this course? Simple 5–10
P1.3 What strategies will you use to achieve your Simple 10–15
course goals?
P1.4 Conduct your own personal SWOT analysis Moderate 10–15
related to your role as a student.
P1.5 Determine which data analytics approaches Moderate 10–15
would be useful in addressing a business
question.
P1.6 Explain the steps in the value chain. Moderate 5–10
P1.7 Get to know IMA’s Statements on Moderate 10–15
Management Accounting.
P1.8 Get to know the CPE requirements for CPAs Moderate 10–15
in your state.
P1.9 Get to know how NASBA supports the State
Boards of Accountancy.
Moderate 15–20
Case Sort out the issues in an ethical dilemma using Moderate 10–15
IMA’s Statement of Ethical Professional Practice
alongside the decision-making framework.
1-2
© 2022 John Wiley & Sons, Inc. or the author, All rights reserved. Farmer, Cost Accounting, 1e, Job Costing Visualized (For Instructor Use Only)
, Answers to Questions
1. A vision reflects what you strive to be (or what an organization strives to be) or what
you strive to achieve by some future date. In contrast, a mission (i.e., a purpose) is
the reason you exist (or an organization exists). Your mission, or purpose, is what
drives you. A strategy reflects the chosen method(s) and technique(s) to get you to
the end goal (the vision). You can think of a vision as being your destination, a mission
(i.e., purpose) as your vehicle (what drives you!), and a strategy is the road you take
to get there. Being aware of these key pieces as well as how they work together can
help you stay motivated and adjust course as needed. By keeping your end goal in
mind, you will be more motivated and driven as you travel the road there.
LO: 1, Bloom: C, Difficulty: Simple, Time: 3-5, AACSB: Knowledge, Communication, Reflective Thinking, AICPA BC: N/A, AICPA AC:
Reporting, AICPA PC: Communication, IMA: N/A
2. A SWOT analysis is a survey of a company’s internal Strengths and Weaknesses along
with its external Opportunities and Threats. Companies use this type of analysis to
evaluate their position in the market so they can work to capitalize on their strengths
and address their weaknesses in an effort to take advantage of opportunities in the
market while also addressing the threats.
In the process of conducting a SWOT analysis, managers often recognize Porter’s Five
Forces among the company’s strengths, weaknesses, opportunities, and threats. The
five forces are customer power, supplier power, threat of substitute products, threat of
new entrants, and industry rivalry.
Through a formal SWOT analysis or a formal evaluation of Porter’s Five Forces, a
company will have a very thorough understanding of where it is positioned in the
market and in the industry, which can help decision-makers determine the best course
forward in order to live the company’s mission and reach its vision.
LO: 1, Bloom: C, Difficulty: Simple, Time: 3-5, AACSB: Knowledge, Communication, AICPA BC: Strategic Perspective, AICPA AC:
Reporting, AICPA PC: Communication, IMA: Strategy, Planning, & Performance: Enterprise Risk Management
3. A balanced scorecard is a performance management tool in which managers can
comprehensively evaluate their organization’s performance. Within the balanced
scorecard, four traditional perspectives are often used (described below). Within each
perspective, the company recognizes its key objectives, key initiatives for each
objective, and specific metrics for each objective, using both financial and non-
financial metrics—hence the term “balanced” scorecard. Targets are specified for
each objective, and at the end of the month/quarter/year, managers can compare
actual results against the company’s stated objectives and targets. A balanced
scorecard can be implemented for the entire entity, for sub-units, and/or for
individuals.
The four perspectives of a traditional balanced scorecard include:
o Financial perspective—considers the shareholder’s perspective and how
metrics like growth, profit, and risk that impact shareholder value translate
into company objectives.
o Customer perspective—considers the customer and includes the metrics that
create value for the customer, while also often measuring customer satisfaction
and retention.
o Internal business process perspective—considers processes internal to a
company that are responsible for creating value for the customer and
shareholder.
o Learning and growth perspective—considers how an organization supports its
people and infrastructure to drive and maintain new products and service
development and growth.
The objectives within each of the four perspectives should be linked such that
improvement in more foundational areas of the scorecard, such as learning and
growth or internal business process perspectives, will lead to expected improvement
Integrated Data Analytics 1st Edition
, Chapter 1
Cost Accounting Has Purpose
Note: the end of chapter brief exercises, exercises, and problems are coded K (knowledge), C
(comprehension), AP (application), AN (analysis), S (synthesize), and E (evaluation) according
to the original Blooms Taxonomy published in 1956.
Assignment Classification Table (By Learning Objective)
Brief
Learning Objectives Questions Exercises Exercises Problems
1 Explore the elements that 1, 2, 3, 4 1, 2, 3, 4, 1, 2, 3 1, 2, 3, 4
support a company’s 5,
purpose, as well as your 6
own.
2 Connect the purpose of 5, 6, 7 7, 8, 9 4, 5, 6 5, 6
cost accounting with the
role of accountants in
organizations.
3 Outline the frameworks, 8, 9, 10, 10, 11, 12 7, 8, 7, 8, 9
including ethics, that 11, 9,
guide the profession. 12 10
1-1
© 2022 John Wiley & Sons, Inc. or the author, All rights reserved. Farmer, Cost Accounting, 1e, Job Costing Visualized (For Instructor Use Only)
,Assignment Characteristics Table
Level of Time
Item Description Difficulty (minutes)
E1.1 Get to know the mission and vision of each of Moderate 10–15
the Big 4 firms and their underlying values.
E1.2 Evaluate the state of competition within an Moderate 10–15
industry given a company’s SWOT analysis.
E1.3 Explain how a balanced scorecard reveals a Moderate 10–15
company’s strategy.
E1.4 Get to know how cost accounting skill sets are Moderate 10–15
valued as consulting services in the Big 4.
E1.5 Use the decision-making framework to make a Moderate 10–15
personal decision.
E1.6 Use the decision-making framework to make a Simple 10–15
business decision.
E1.7 Get to know the IMA. Simple 5–10
E1.8 Get to know the continuing education Moderate 10–15
requirements for IMA’s flagship certification.
E1.9 Get to know IMA’s Statement of Ethical Moderate 15–20
Professional Practice.
E1.10 Get to know the AICPA.
Simple 5–10
P1.1 What is your own personal purpose? Simple 5–10
P1.2 What are your goals in this course? Simple 5–10
P1.3 What strategies will you use to achieve your Simple 10–15
course goals?
P1.4 Conduct your own personal SWOT analysis Moderate 10–15
related to your role as a student.
P1.5 Determine which data analytics approaches Moderate 10–15
would be useful in addressing a business
question.
P1.6 Explain the steps in the value chain. Moderate 5–10
P1.7 Get to know IMA’s Statements on Moderate 10–15
Management Accounting.
P1.8 Get to know the CPE requirements for CPAs Moderate 10–15
in your state.
P1.9 Get to know how NASBA supports the State
Boards of Accountancy.
Moderate 15–20
Case Sort out the issues in an ethical dilemma using Moderate 10–15
IMA’s Statement of Ethical Professional Practice
alongside the decision-making framework.
1-2
© 2022 John Wiley & Sons, Inc. or the author, All rights reserved. Farmer, Cost Accounting, 1e, Job Costing Visualized (For Instructor Use Only)
, Answers to Questions
1. A vision reflects what you strive to be (or what an organization strives to be) or what
you strive to achieve by some future date. In contrast, a mission (i.e., a purpose) is
the reason you exist (or an organization exists). Your mission, or purpose, is what
drives you. A strategy reflects the chosen method(s) and technique(s) to get you to
the end goal (the vision). You can think of a vision as being your destination, a mission
(i.e., purpose) as your vehicle (what drives you!), and a strategy is the road you take
to get there. Being aware of these key pieces as well as how they work together can
help you stay motivated and adjust course as needed. By keeping your end goal in
mind, you will be more motivated and driven as you travel the road there.
LO: 1, Bloom: C, Difficulty: Simple, Time: 3-5, AACSB: Knowledge, Communication, Reflective Thinking, AICPA BC: N/A, AICPA AC:
Reporting, AICPA PC: Communication, IMA: N/A
2. A SWOT analysis is a survey of a company’s internal Strengths and Weaknesses along
with its external Opportunities and Threats. Companies use this type of analysis to
evaluate their position in the market so they can work to capitalize on their strengths
and address their weaknesses in an effort to take advantage of opportunities in the
market while also addressing the threats.
In the process of conducting a SWOT analysis, managers often recognize Porter’s Five
Forces among the company’s strengths, weaknesses, opportunities, and threats. The
five forces are customer power, supplier power, threat of substitute products, threat of
new entrants, and industry rivalry.
Through a formal SWOT analysis or a formal evaluation of Porter’s Five Forces, a
company will have a very thorough understanding of where it is positioned in the
market and in the industry, which can help decision-makers determine the best course
forward in order to live the company’s mission and reach its vision.
LO: 1, Bloom: C, Difficulty: Simple, Time: 3-5, AACSB: Knowledge, Communication, AICPA BC: Strategic Perspective, AICPA AC:
Reporting, AICPA PC: Communication, IMA: Strategy, Planning, & Performance: Enterprise Risk Management
3. A balanced scorecard is a performance management tool in which managers can
comprehensively evaluate their organization’s performance. Within the balanced
scorecard, four traditional perspectives are often used (described below). Within each
perspective, the company recognizes its key objectives, key initiatives for each
objective, and specific metrics for each objective, using both financial and non-
financial metrics—hence the term “balanced” scorecard. Targets are specified for
each objective, and at the end of the month/quarter/year, managers can compare
actual results against the company’s stated objectives and targets. A balanced
scorecard can be implemented for the entire entity, for sub-units, and/or for
individuals.
The four perspectives of a traditional balanced scorecard include:
o Financial perspective—considers the shareholder’s perspective and how
metrics like growth, profit, and risk that impact shareholder value translate
into company objectives.
o Customer perspective—considers the customer and includes the metrics that
create value for the customer, while also often measuring customer satisfaction
and retention.
o Internal business process perspective—considers processes internal to a
company that are responsible for creating value for the customer and
shareholder.
o Learning and growth perspective—considers how an organization supports its
people and infrastructure to drive and maintain new products and service
development and growth.
The objectives within each of the four perspectives should be linked such that
improvement in more foundational areas of the scorecard, such as learning and
growth or internal business process perspectives, will lead to expected improvement
