SOLUTION MANUAL
Horngren's Accounting, The Managerial Chapters, 14th Edition
By Tracie Miller-Nobles Brenda Mattison, All Chapters 1 - 9
, Table of contents
1. Introduction to Managerial Accounting
2. Job Order Costing
3. Process Costing
4. Cost-Volume-ProfitAnalysis
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 M:1
Introduction to Managerial Accounting
Review Questions
1. What is the primary purpose of managerial accounting?
The primary purpose of managerial accounting is to provide information to help
managers plan, direct, control, and make decisions.
2. List six differences between financial accounting and managerial accounting.
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 re- strictions, (5) scope of information,
and (6) behavioral.
3. Explain the difference between line positions and staff positions.
Line positions are directly involved in providing goods or services to customers.
Staff positions support line positions.
4. Explain the differences between planning, directing, and controlling.
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. List the four IMA standards of ethical practice and briefly describe each.
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 engaging in or supporting any activity that
might discredit the profession. Contribute to a positive ethical culture and
place integrity of the profession above personal interest.
5, cont.
IV. Credibility.
Communicate information fairly and objectively.
Provide all relevant information that could reasonably be expected to
influence an intended user’s understanding of the reports, analyses, or
recommendations.
Report any delays or deficiencies in information, timeliness, processing, or
internal controlsin conformance with organization policy and/or applicable
law.
Communicate any professional limitations or other constraints that would
preclude responsi- ble judgment or successful performance of an activity.
6. Describe a service company and give an example.
Service companies sell time, skills, and knowledge. Examples of service
companies include phone service companies, banks, cleaning service companies,
accounting firms, law firms, medical physi- cians, and online auction services.
7. Describe a merchandising company and give an example.
Merchandising companies resell products they buy from suppliers. Merchandisers
keep an inventoryof products, and managers are accountable for the purchasing,
storage, and sale of the products. Ex- amples of merchandising companies include
toy stores, grocery stores, and clothing stores.
Horngren's Accounting, The Managerial Chapters, 14th Edition
By Tracie Miller-Nobles Brenda Mattison, All Chapters 1 - 9
, Table of contents
1. Introduction to Managerial Accounting
2. Job Order Costing
3. Process Costing
4. Cost-Volume-ProfitAnalysis
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 M:1
Introduction to Managerial Accounting
Review Questions
1. What is the primary purpose of managerial accounting?
The primary purpose of managerial accounting is to provide information to help
managers plan, direct, control, and make decisions.
2. List six differences between financial accounting and managerial accounting.
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 re- strictions, (5) scope of information,
and (6) behavioral.
3. Explain the difference between line positions and staff positions.
Line positions are directly involved in providing goods or services to customers.
Staff positions support line positions.
4. Explain the differences between planning, directing, and controlling.
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. List the four IMA standards of ethical practice and briefly describe each.
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 engaging in or supporting any activity that
might discredit the profession. Contribute to a positive ethical culture and
place integrity of the profession above personal interest.
5, cont.
IV. Credibility.
Communicate information fairly and objectively.
Provide all relevant information that could reasonably be expected to
influence an intended user’s understanding of the reports, analyses, or
recommendations.
Report any delays or deficiencies in information, timeliness, processing, or
internal controlsin conformance with organization policy and/or applicable
law.
Communicate any professional limitations or other constraints that would
preclude responsi- ble judgment or successful performance of an activity.
6. Describe a service company and give an example.
Service companies sell time, skills, and knowledge. Examples of service
companies include phone service companies, banks, cleaning service companies,
accounting firms, law firms, medical physi- cians, and online auction services.
7. Describe a merchandising company and give an example.
Merchandising companies resell products they buy from suppliers. Merchandisers
keep an inventoryof products, and managers are accountable for the purchasing,
storage, and sale of the products. Ex- amples of merchandising companies include
toy stores, grocery stores, and clothing stores.
