SOLUTION MANUAL
Horngren's Accounting, The Managerial Chapters, 14th Edition
By Tracie Miller-Nobles Brenda Mattison, All Chapters 1 - 9
,Table of contents
w w
1. Introduction to Managerial Accounting
w w w
2. Job Order Costing
w w
3. Process Costingw
4. Cost-Volume-Profit Analysis w
5. Master Budgets
w
6. Flexible Budgets and Standard Cost Systems
w w w w w
7. Cost Allocation and Responsibility Accounting
w w w w
8. Short-Term Business Decisions
w w
9. Capital Investment Decisions
w w
,Chapter M:1 w
Introduction to Managerial Accounting
w w w
Review Questions
w
1. Whatwiswthewprimarywpurposewofwmanagerialwaccounting?
Thewprimarywpurposewofwmanagerialwaccountingwiswtowprovidewinformationwtowhelpwmanagerswplan,wdi
rect,wcontrol,wandwmakewdecisions.
2. Listwsixwdifferenceswbetweenwfinancialwaccountingwandwmanagerialwaccounting.
Financialwaccountingwandwmanagerialwaccountingwdifferwonwthewfollowingw6wdimensions:w(1)wprimarywuser
s,w(2)wpurposewofwinformation,w(3)wfocuswandwtimewdimensionwofwthewinformation,w(4)wruleswandwre-
strictions,w(5)wscopewofwinformation,wandw(6)wbehavioral.
w
3. Explainwthewdifferencewbetweenwlinewpositionswandwstaffwpositions.
Linewpositionswarewdirectlywinvolvedwinwprovidingwgoodsworwserviceswtowcustomers.wStaffwpositionswsu
pportwlinewpositions.
4. Explainwthewdifferenceswbetweenwplanning,wdirecting,wandwcontrolling.
Planningwmeanswchoosingwgoalswandwdecidingwhowwtowachievewthem.wDirectingwinvolveswrunningwthewday-
to-
daywoperationswofwawbusiness.wControllingwiswthewprocesswofwmonitoringwoperationswandwkeepingwthewcom
panywonwtrack.
5. ListwthewfourwIMAwstandardswofwethicalwpracticewandwbrieflywdescribeweach.
ThewfourwIMAwstandardswofwethicalwpracticewandwawdescriptionwofweachwfollow.
I. Competence.
Maintainwanwappropriatewlevelwofwprofessionalwleadershipwandwexpertisewbywenhancingwkn
owledgewandwskills.
Performwprofessionalwdutieswinwaccordancewwithwrelevantwlaws,wregulations,wandwtechnicalwsta
ndards.
Providewdecisionwsupportwinformationwandwrecommendationswthatwarewaccurate,wclear,wconcise,
, andwtimely.
Recognisewandwhelpwmangewrisk.
II. Confidentiality.
Keepwinformationwconfidentialwexceptwwhenwdisclosurewiswauthorizedworwlegallywrequired.
Informwallwrelevantwpartieswregardingwappropriatewusewofwconfidentialwinformation.w Monitorwtowe
nsurewcompliance.
Refrainwfromwusingwconfidentialwinformationwforwunethicalworwillegalwadvantage.
III. Integrity.
Mitigatewactualwconflictswofwinterest.wRegularlywcommunicatewwithwbusinesswassociateswtowavoidwapp
arentwconflictswofwinterest.wwAdvisewallwpartieswofwanywpotentialwconflicts.
Refrainwfromwengagingwinwanywconductwthatwwouldwprejudicewcarryingwoutwdutieswethically.
Abstainwfromwengagingwinworwsupportingwanywactivitywthatwmightwdiscreditwthewprofession.
Contributewtowawpositivewethicalwculturewandwplacewintegritywofwthewprofessionwabovewpersonalwin
terest.
5,wcont.
IV. Credibility.
Communicatewinformationwfairlywandwobjectively.
Providewallwrelevantwinformationwthatwcouldwreasonablywbewexpectedwtowinfluencewanwintendedwu
ser’swunderstandingwofwthewreports,wanalyses,worwrecommendations.
Reportwanywdelaysworwdeficiencieswinwinformation,wtimeliness,wprocessing,worwinternalwcontrolswinw
conformancewwithworganizationwpolicywand/orwapplicablewlaw.
Communicatewanywprofessionalwlimitationsworwotherwconstraintswthatwwouldwprecludewresponsi-
blewjudgmentworwsuccessfulwperformancewofwanwactivity.
w
6. Describewawservicewcompanywandwgivewanwexample.
Servicewcompanieswsellwtime,wskills,wandwknowledge.wExampleswofwservicewcompanieswincludewphonewserv
icewcompanies,wbanks,wcleaningwservicewcompanies,waccountingwfirms,wlawwfirms,wmedicalwphysi-
cians,wandwonlinewauctionwservices.
w
7. Describewawmerchandisingwcompanywandwgivewanwexample.
Merchandisingwcompanieswresellwproductswtheywbuywfromwsuppliers.wMerchandiserswkeepwanwinventorywofw
products,wandwmanagerswarewaccountablewforwthewpurchasing,wstorage,wandwsalewofwthewproducts.wEx-
wampleswofwmerchandisingwcompanieswincludewtoywstores,wgrocerywstores,wandwclothingwstores.
8. Howwdowmanufacturingwcompanieswdifferwfromwmerchandisingwcompanies?
Merchandisingwcompanieswresellwproductswtheywpreviouslywboughtwfromwsuppliers,wwhereaswmanufac-
wturingwcompanieswusewlabor,wequipment,wsupplies,wandwfacilitieswtowconvertwrawwmaterialswintownewwfin-
ishedwproducts.wInwcontrastwtowmerchandisingwcompanies,wmanufacturingwcompanieswhavewawbroadwrange
w
wofwproductionwactivitieswthatwrequirewtrackingwcostswonwthreewkindswofwinventory.
Horngren's Accounting, The Managerial Chapters, 14th Edition
By Tracie Miller-Nobles Brenda Mattison, All Chapters 1 - 9
,Table of contents
w w
1. Introduction to Managerial Accounting
w w w
2. Job Order Costing
w w
3. Process Costingw
4. Cost-Volume-Profit Analysis w
5. Master Budgets
w
6. Flexible Budgets and Standard Cost Systems
w w w w w
7. Cost Allocation and Responsibility Accounting
w w w w
8. Short-Term Business Decisions
w w
9. Capital Investment Decisions
w w
,Chapter M:1 w
Introduction to Managerial Accounting
w w w
Review Questions
w
1. Whatwiswthewprimarywpurposewofwmanagerialwaccounting?
Thewprimarywpurposewofwmanagerialwaccountingwiswtowprovidewinformationwtowhelpwmanagerswplan,wdi
rect,wcontrol,wandwmakewdecisions.
2. Listwsixwdifferenceswbetweenwfinancialwaccountingwandwmanagerialwaccounting.
Financialwaccountingwandwmanagerialwaccountingwdifferwonwthewfollowingw6wdimensions:w(1)wprimarywuser
s,w(2)wpurposewofwinformation,w(3)wfocuswandwtimewdimensionwofwthewinformation,w(4)wruleswandwre-
strictions,w(5)wscopewofwinformation,wandw(6)wbehavioral.
w
3. Explainwthewdifferencewbetweenwlinewpositionswandwstaffwpositions.
Linewpositionswarewdirectlywinvolvedwinwprovidingwgoodsworwserviceswtowcustomers.wStaffwpositionswsu
pportwlinewpositions.
4. Explainwthewdifferenceswbetweenwplanning,wdirecting,wandwcontrolling.
Planningwmeanswchoosingwgoalswandwdecidingwhowwtowachievewthem.wDirectingwinvolveswrunningwthewday-
to-
daywoperationswofwawbusiness.wControllingwiswthewprocesswofwmonitoringwoperationswandwkeepingwthewcom
panywonwtrack.
5. ListwthewfourwIMAwstandardswofwethicalwpracticewandwbrieflywdescribeweach.
ThewfourwIMAwstandardswofwethicalwpracticewandwawdescriptionwofweachwfollow.
I. Competence.
Maintainwanwappropriatewlevelwofwprofessionalwleadershipwandwexpertisewbywenhancingwkn
owledgewandwskills.
Performwprofessionalwdutieswinwaccordancewwithwrelevantwlaws,wregulations,wandwtechnicalwsta
ndards.
Providewdecisionwsupportwinformationwandwrecommendationswthatwarewaccurate,wclear,wconcise,
, andwtimely.
Recognisewandwhelpwmangewrisk.
II. Confidentiality.
Keepwinformationwconfidentialwexceptwwhenwdisclosurewiswauthorizedworwlegallywrequired.
Informwallwrelevantwpartieswregardingwappropriatewusewofwconfidentialwinformation.w Monitorwtowe
nsurewcompliance.
Refrainwfromwusingwconfidentialwinformationwforwunethicalworwillegalwadvantage.
III. Integrity.
Mitigatewactualwconflictswofwinterest.wRegularlywcommunicatewwithwbusinesswassociateswtowavoidwapp
arentwconflictswofwinterest.wwAdvisewallwpartieswofwanywpotentialwconflicts.
Refrainwfromwengagingwinwanywconductwthatwwouldwprejudicewcarryingwoutwdutieswethically.
Abstainwfromwengagingwinworwsupportingwanywactivitywthatwmightwdiscreditwthewprofession.
Contributewtowawpositivewethicalwculturewandwplacewintegritywofwthewprofessionwabovewpersonalwin
terest.
5,wcont.
IV. Credibility.
Communicatewinformationwfairlywandwobjectively.
Providewallwrelevantwinformationwthatwcouldwreasonablywbewexpectedwtowinfluencewanwintendedwu
ser’swunderstandingwofwthewreports,wanalyses,worwrecommendations.
Reportwanywdelaysworwdeficiencieswinwinformation,wtimeliness,wprocessing,worwinternalwcontrolswinw
conformancewwithworganizationwpolicywand/orwapplicablewlaw.
Communicatewanywprofessionalwlimitationsworwotherwconstraintswthatwwouldwprecludewresponsi-
blewjudgmentworwsuccessfulwperformancewofwanwactivity.
w
6. Describewawservicewcompanywandwgivewanwexample.
Servicewcompanieswsellwtime,wskills,wandwknowledge.wExampleswofwservicewcompanieswincludewphonewserv
icewcompanies,wbanks,wcleaningwservicewcompanies,waccountingwfirms,wlawwfirms,wmedicalwphysi-
cians,wandwonlinewauctionwservices.
w
7. Describewawmerchandisingwcompanywandwgivewanwexample.
Merchandisingwcompanieswresellwproductswtheywbuywfromwsuppliers.wMerchandiserswkeepwanwinventorywofw
products,wandwmanagerswarewaccountablewforwthewpurchasing,wstorage,wandwsalewofwthewproducts.wEx-
wampleswofwmerchandisingwcompanieswincludewtoywstores,wgrocerywstores,wandwclothingwstores.
8. Howwdowmanufacturingwcompanieswdifferwfromwmerchandisingwcompanies?
Merchandisingwcompanieswresellwproductswtheywpreviouslywboughtwfromwsuppliers,wwhereaswmanufac-
wturingwcompanieswusewlabor,wequipment,wsupplies,wandwfacilitieswtowconvertwrawwmaterialswintownewwfin-
ishedwproducts.wInwcontrastwtowmerchandisingwcompanies,wmanufacturingwcompanieswhavewawbroadwrange
w
wofwproductionwactivitieswthatwrequirewtrackingwcostswonwthreewkindswofwinventory.
