SOLUTION MANUAL
Horngren's Accounting, 13th Edition Managerial
by Tracie Miller-Nobles, Brenda Mattison, All Chapter 1-9
,THE MANAGERIAL CHAPTERS
j j
1. Introduction to Managerial Accounting
j j j
2. Job Order Costing
j j
3. Process Costingj
4. Cost-Volume-Profit Analysis j
5. Master Budgets
j
6. Flexible Budgets and Standard Cost Systems
j j j j j
7. Cost Allocation and Responsibility Accounting
j j j j
8. Short-Term Business Decisions j j
9. Capital Investment Decisions
j j
,Chapter1 j
IntroductiontoManagerialAccounting
j j j
Review Questions
j j
1. Thejprimaryjpurposejofjmanagerialjaccountingjisjtojprovidejinformationjtojhelpjmanagersjplan,j di
rect,jcontrol,jandjmakejdecisions.
2. Financialjaccountingjandjmanagerialjaccountingjdifferjonjthejfollowingj6jdimensions:j(1)jprimaryj use
rs,j(2)jpurposejofjinformation,j(3)jfocusjandjtimejdimensionjofjthejinformation,j(4)jrulesjandj restrictions,j
(5)jscopejofjinformation,jandj(6)jbehavioral.
3. Linejpositionsjarejdirectlyjinvolvedjinjprovidingjgoodsjorjservicesjtojcustomers.jStaffjpositionsj supp
ortjlinejpositions.
4. Planningjmeansjchoosingjgoalsjandjdecidingjhowjtojachievejthem.jDirectingjinvolvesjrunningjthejday-j to-
dayjoperationsjofjajbusiness.jControllingjisjthejprocessjofjmonitoringjoperationsjandjkeepingthej companyj
onjtrack.
5. ThejfourjIMAjstandardsjofjethicaljpracticejandjajdescriptionjofjeachjfollow.
I. Competence.
Maintainjanjappropriatejleveljofjprofessionaljleadershipjandjexpertisejbyjenhancingj kno
wledgejandjskills.
Performjprofessionaljdutiesjinjaccordancejwithjrelevantjlaws,jregulations,jandjtechnicalj st
andards.
Providejdecisionjsupportjinformationjandjrecommendationsjthatjarejaccurate,jclear,jconcise,j an
djtimely.
Recognisejandjhelpjmangejrisk.
II. Confidentiality.
Keepjinformationjconfidentialjexceptjwhenjdisclosurejisjauthorizedjorjlegallyjrequired.j Informja
lljrelevantjpartiesjregardingjappropriatejusejofjconfidentialjinformation.j Monitorjtoj ensurejcom
pliance.
jRefrainjfromjusingjconfidentialjinformationjforjunethicaljorjillegaljadvantage.
III. Integrity.
Mitigatejactualjconflictsjofjinterest.jRegularlyjcommunicatejwithjbusinessjassociatesjtojavoidj appar
entjconflictsjofjinterest.j Advisejalljpartiesjofjanyjpotentialjconflicts.
Refrainjfromjengagingjinjanyjconductjthatjwouldjprejudicejcarryingjoutjdutiesjethically.
, Abstainjfromjengagingjinjorjsupportingjanyjactivityjthatjmightjdiscreditjthejprofession.j Contrib
utejtojajpositivejethicaljculturejandjplacejintegrityjofjthejprofessionjabovejpersonalj interest.
5,jcont.
IV. Credibility.
Communicatejinformationjfairlyjandjobjectively.
Providejalljrelevantjinformationjthatjcouldjreasonablyjbejexpectedjtojinfluencejanjintendedj user’
sjunderstandingjofjthejreports,janalyses,jorjrecommendations.
Reportjanyjdelaysjorjdeficienciesjinjinformation,jtimeliness,jprocessing,jorjinternaljcontrolsinj confo
rmancejwithjorganizationjpolicyjand/orjapplicablejlaw.
Communicatejanyjprofessionaljlimitationsjorjotherjconstraintsjthatjwouldjprecludejresponsi-
j blejjudgmentjorjsuccessfuljperformancejofjanjactivity.
6. Servicejcompaniesjselljtime,jskills,jandjknowledge.j Examplesjofjservicejcompaniesjincludejphonej servicejc
ompanies,jbanks,jcleaningjservicejcompanies,jaccountingjfirms,jlawjfirms,jmedicaljphysicians,j andjonlineja
uctionjservices.
7. Merchandisingjcompaniesjreselljproductsjtheyjbuyjfromjsuppliers.jMerchandisersjkeepjanjinventoryofj pro
ducts,jandjmanagersjarejaccountablejforjthejpurchasing,jstorage,jandjsalejofjthejproducts.jExamplesj ofjme
rchandisingjcompaniesjincludejtoyjstores,jgroceryjstores,jandjclothingjstores.
8. Merchandisingjcompaniesjreselljproductsjtheyjpreviouslyjboughtjfromjsuppliers,jwhereasj manufacturin
gjcompaniesjusejlabor,jequipment,jsupplies,jandjfacilitiesjtojconvertjrawjmaterialsjintoj newjfinishedjpro
ducts.jInjcontrastjtojmerchandisingjcompanies,jmanufacturingjcompaniesjhavejaj broadjrangejofjproduc
tionjactivitiesjthatjrequirejtrackingjcostsjonjthreejkindsjofjinventory.
9. ThejthreejinventoryjaccountsjusedjbyjmanufacturingjcompaniesjarejRawjMaterialsjInventory,jWork-in-
j ProcessjInventory,jandjFinishedjGoodsjInventory.
RawjMaterialsjInventoryjincludesjmaterialsjusedjtojmanufacturejajproduct.jWork-in-
ProcessInventoryj includesjgoodsjthatjhavejbeenjstartedjinjthejmanufacturingjprocessjbutjarejnotjyetjcompl
ete.j Finishedj GoodsjInventoryjincludesjcompletedjgoodsjthatjhavejnotjyetjbeenjsold.
10. Ajdirectjcostjisjajcostjthatjcanjbejeasilyjandjcost-
effectivelyjtracedjtojajcostjobjectj(whichjisjanythingj forjwhichjmanagersjwantjajseparatejmeasurementj
ofjcost).jAnjindirectjcostjisjajcostjthatcannotjbej easilyjorjcost-effectivelyjtracedjtojajcostjobject.
11. Thejthreejmanufacturingjcostsjforjajmanufacturingjcompanyjarejdirectjmaterials,jdirectjlabor,jandj manuf
acturingjoverhead.jDirectjmaterialsjarejmaterialsjthatjbecomejajphysicaljpartjofjajfinishedj productjandj
whosejcostsjarejeasilyjtraceablejtojthejfinishedjproduct.j Directjlaborjisjthejlaborjcostjofj thejemployeesjwh
ojconvertjmaterialsjintojfinishedjproducts.jManufacturingjoverheadjincludesjallj manufacturingjcostsjexce
ptjdirectjmaterialsjandjdirectjlabor,jsuchjasjindirectjmaterials,jindirectjlabor,j factoryjdepreciation,jfactor
yjrent,jandjfactoryjpropertyjtaxes.
Horngren's Accounting, 13th Edition Managerial
by Tracie Miller-Nobles, Brenda Mattison, All Chapter 1-9
,THE MANAGERIAL CHAPTERS
j j
1. Introduction to Managerial Accounting
j j j
2. Job Order Costing
j j
3. Process Costingj
4. Cost-Volume-Profit Analysis j
5. Master Budgets
j
6. Flexible Budgets and Standard Cost Systems
j j j j j
7. Cost Allocation and Responsibility Accounting
j j j j
8. Short-Term Business Decisions j j
9. Capital Investment Decisions
j j
,Chapter1 j
IntroductiontoManagerialAccounting
j j j
Review Questions
j j
1. Thejprimaryjpurposejofjmanagerialjaccountingjisjtojprovidejinformationjtojhelpjmanagersjplan,j di
rect,jcontrol,jandjmakejdecisions.
2. Financialjaccountingjandjmanagerialjaccountingjdifferjonjthejfollowingj6jdimensions:j(1)jprimaryj use
rs,j(2)jpurposejofjinformation,j(3)jfocusjandjtimejdimensionjofjthejinformation,j(4)jrulesjandj restrictions,j
(5)jscopejofjinformation,jandj(6)jbehavioral.
3. Linejpositionsjarejdirectlyjinvolvedjinjprovidingjgoodsjorjservicesjtojcustomers.jStaffjpositionsj supp
ortjlinejpositions.
4. Planningjmeansjchoosingjgoalsjandjdecidingjhowjtojachievejthem.jDirectingjinvolvesjrunningjthejday-j to-
dayjoperationsjofjajbusiness.jControllingjisjthejprocessjofjmonitoringjoperationsjandjkeepingthej companyj
onjtrack.
5. ThejfourjIMAjstandardsjofjethicaljpracticejandjajdescriptionjofjeachjfollow.
I. Competence.
Maintainjanjappropriatejleveljofjprofessionaljleadershipjandjexpertisejbyjenhancingj kno
wledgejandjskills.
Performjprofessionaljdutiesjinjaccordancejwithjrelevantjlaws,jregulations,jandjtechnicalj st
andards.
Providejdecisionjsupportjinformationjandjrecommendationsjthatjarejaccurate,jclear,jconcise,j an
djtimely.
Recognisejandjhelpjmangejrisk.
II. Confidentiality.
Keepjinformationjconfidentialjexceptjwhenjdisclosurejisjauthorizedjorjlegallyjrequired.j Informja
lljrelevantjpartiesjregardingjappropriatejusejofjconfidentialjinformation.j Monitorjtoj ensurejcom
pliance.
jRefrainjfromjusingjconfidentialjinformationjforjunethicaljorjillegaljadvantage.
III. Integrity.
Mitigatejactualjconflictsjofjinterest.jRegularlyjcommunicatejwithjbusinessjassociatesjtojavoidj appar
entjconflictsjofjinterest.j Advisejalljpartiesjofjanyjpotentialjconflicts.
Refrainjfromjengagingjinjanyjconductjthatjwouldjprejudicejcarryingjoutjdutiesjethically.
, Abstainjfromjengagingjinjorjsupportingjanyjactivityjthatjmightjdiscreditjthejprofession.j Contrib
utejtojajpositivejethicaljculturejandjplacejintegrityjofjthejprofessionjabovejpersonalj interest.
5,jcont.
IV. Credibility.
Communicatejinformationjfairlyjandjobjectively.
Providejalljrelevantjinformationjthatjcouldjreasonablyjbejexpectedjtojinfluencejanjintendedj user’
sjunderstandingjofjthejreports,janalyses,jorjrecommendations.
Reportjanyjdelaysjorjdeficienciesjinjinformation,jtimeliness,jprocessing,jorjinternaljcontrolsinj confo
rmancejwithjorganizationjpolicyjand/orjapplicablejlaw.
Communicatejanyjprofessionaljlimitationsjorjotherjconstraintsjthatjwouldjprecludejresponsi-
j blejjudgmentjorjsuccessfuljperformancejofjanjactivity.
6. Servicejcompaniesjselljtime,jskills,jandjknowledge.j Examplesjofjservicejcompaniesjincludejphonej servicejc
ompanies,jbanks,jcleaningjservicejcompanies,jaccountingjfirms,jlawjfirms,jmedicaljphysicians,j andjonlineja
uctionjservices.
7. Merchandisingjcompaniesjreselljproductsjtheyjbuyjfromjsuppliers.jMerchandisersjkeepjanjinventoryofj pro
ducts,jandjmanagersjarejaccountablejforjthejpurchasing,jstorage,jandjsalejofjthejproducts.jExamplesj ofjme
rchandisingjcompaniesjincludejtoyjstores,jgroceryjstores,jandjclothingjstores.
8. Merchandisingjcompaniesjreselljproductsjtheyjpreviouslyjboughtjfromjsuppliers,jwhereasj manufacturin
gjcompaniesjusejlabor,jequipment,jsupplies,jandjfacilitiesjtojconvertjrawjmaterialsjintoj newjfinishedjpro
ducts.jInjcontrastjtojmerchandisingjcompanies,jmanufacturingjcompaniesjhavejaj broadjrangejofjproduc
tionjactivitiesjthatjrequirejtrackingjcostsjonjthreejkindsjofjinventory.
9. ThejthreejinventoryjaccountsjusedjbyjmanufacturingjcompaniesjarejRawjMaterialsjInventory,jWork-in-
j ProcessjInventory,jandjFinishedjGoodsjInventory.
RawjMaterialsjInventoryjincludesjmaterialsjusedjtojmanufacturejajproduct.jWork-in-
ProcessInventoryj includesjgoodsjthatjhavejbeenjstartedjinjthejmanufacturingjprocessjbutjarejnotjyetjcompl
ete.j Finishedj GoodsjInventoryjincludesjcompletedjgoodsjthatjhavejnotjyetjbeenjsold.
10. Ajdirectjcostjisjajcostjthatjcanjbejeasilyjandjcost-
effectivelyjtracedjtojajcostjobjectj(whichjisjanythingj forjwhichjmanagersjwantjajseparatejmeasurementj
ofjcost).jAnjindirectjcostjisjajcostjthatcannotjbej easilyjorjcost-effectivelyjtracedjtojajcostjobject.
11. Thejthreejmanufacturingjcostsjforjajmanufacturingjcompanyjarejdirectjmaterials,jdirectjlabor,jandj manuf
acturingjoverhead.jDirectjmaterialsjarejmaterialsjthatjbecomejajphysicaljpartjofjajfinishedj productjandj
whosejcostsjarejeasilyjtraceablejtojthejfinishedjproduct.j Directjlaborjisjthejlaborjcostjofj thejemployeesjwh
ojconvertjmaterialsjintojfinishedjproducts.jManufacturingjoverheadjincludesjallj manufacturingjcostsjexce
ptjdirectjmaterialsjandjdirectjlabor,jsuchjasjindirectjmaterials,jindirectjlabor,j factoryjdepreciation,jfactor
yjrent,jandjfactoryjpropertyjtaxes.
