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 ii1: iiThe iiChanging iiRole iiof iiManagerial iiAccounting iiin iia iiDynamic iiBusiness
ii EnvironmentiChapter ii2: iiBasic iiCost iiManagement iiConcepts
Chapter ii3: iiProduct iiCosting iiand iiCost iiAccumulation iiin iia iiBatch iiProduction iiEnvironment
Chapter ii4: iiProcess iiCosting iiand iiHybrid iiProduct-Costing iiSystems
i
Chapter ii5: iiActivity-Based iiCosting iiand iiManagement
Chapter ii6: iiActivity iiAnalysis, iiCost iiBehavior, iiand iiCost
ii EstimationiChapter ii7: iiCost-Volume-Profit iiAnalysis
Chapter ii8: iiVariable iiCosting iiand iithe iiMeasurement iiof iiESG iiand iiQuality iiCosts
Chapter ii9: iiFinancial iiPlanning iiand iiAnalysis: iiThe iiMaster iiBudget
i
Chapter ii10: iiStandard iiCosting iiand iiAnalysis iiof iiDirect iiCosts
Chapter ii11: iiFlexible iiBudgeting iiand iithe iiManagement iiof iiOverhead iiand iiSupport iiActivity
ii CostsiChapter ii12: iiResponsibility iiAccounting iiand iithe iiBalanced iiScorecard
Chapter ii13: iiInvestment iiCenters iiand iiTransfer iiPricing
ii Chapter ii14: iiDecision iiMaking: iiRelevant iiCosts iiand iiBenefits
Chapter ii15: iiTarget iiCosting iiand iiCost iiAnalysis iifor iiPricing
ii DecisionsiChapter ii16: iiCapital iiExpenditure iiDecisions
Chapter ii17: iiAllocation iiof iiSupport iiActivity iiCosts iiand iiJoint iiCosts
Appendix iiI: iiThe iiSarbanes-Oxley iiAct, iiInternal iiControls, iiand iiManagement iiAccountingiAppendix
ii II: iiCompound iiInterest iiand iithe iiConcept iiof iiPresent iiValue
Appendix iiIII: iiInventory iiManagement
,CHAPTER 1 ii
The Crucial Role of Managerial Accounting in a
ii ii ii ii ii ii ii
Dynamic Business Environment
ii ii ii
FOCUS ON ETHICS (Located before the Chapter Summary in the text.)
ii ii ii ii ii ii ii ii ii ii
The focus-on-ethics inset for Chapter 1 is the IMA Statement of Ethical Professional Practice.
ii ii ii ii ii ii ii ii ii ii ii ii ii
Instructors can use this list of ethical principles and standards to lead a class discussion.
ii ii ii ii ii ii ii i i i i ii ii ii ii ii ii
The discussion can also range to consideration of how these standards may have been
ii ii ii ii ii ii ii ii ii ii ii ii ii ii
violated by accountants and managers involved in the various ethical scandals uncovered
ii ii ii ii ii ii ii ii ii i i ii ii
over the past several years. It is also useful to discuss the pros and cons of the procedures
ii ii ii ii ii ii ii ii ii ii ii ii ii ii ii ii ii ii
that IMA suggests for its members when they believe they know about ethical lapses in
ii ii ii ii ii ii ii ii ii ii ii ii ii ii ii
their organizations.
ii ii
ANSWERS TO REVIEW QUESTIONS ii ii ii
1-1 The explosion in e-commerce will affect managers in significant ways. One
ii ii ii ii ii ii ii ii ii ii
effect will be a drastic reduction in paper work. Millions of transactions between
ii ii ii ii ii ii ii ii ii ii ii ii ii
businesses
ii are now being conducted electronically with no hard-copy ii ii ii ii ii ii ii ii
documentation. Along with this method of communicating for business transactions
ii ii ii i ii ii ii ii ii ii
comes the very significant issue of information security. Businesses need to find
ii ii ii ii ii ii ii ii ii ii ii ii
ways to protect confidential information in their own computers, in cloud
ii ii ii ii ii ii ii ii ii ii ii
computing data centers, and while moving across the internet, while at the
ii ii ii ii ii ii ii ii ii ii ii ii
same time sharing the information necessary to complete transactions. Another
ii ii ii ii ii ii ii ii ii ii
effect of e-commerce is the dramatically increased speed with which business
ii ii ii ii ii ii ii ii ii ii ii
transactions can be conducted. In addition, there will be dramatic changes in the
ii ii ii ii ii ii ii ii ii ii ii ii ii
way managerial accounting procedures are carried out, one example being cloud-
ii ii ii ii ii ii ii ii ii ii ii
based budgeting, which is the enterprise-wide and electronic completion of a
ii ii ii ii ii ii ii i ii ii
company’s budgeting process using cloud-based software and data storage.
ii ii ii ii ii ii ii ii ii
, 1-2 Plausible i i goals i i for i i the i i organizations i i listed ii are i i as i i follows:
(a) Amazon.com: (1) To achieve and maintain profitability, and (2) to grow on- ii ii ii ii ii ii ii ii ii ii ii
line sales of their many products. Amazon is also famous (infamous) for wanting
ii ii ii ii ii ii ii ii ii ii ii ii
to have every product in the world on its site.
ii ii ii ii ii ii ii ii ii ii
(b) American Red Cross: (1) To raise funds from the general public sufficient to have
ii ii ii ii ii ii ii ii ii ii ii ii ii
resources available to meet any disaster that may occur, and (2) to provide
ii ii ii ii ii ii ii ii ii ii ii ii ii
assistance to people who are victims of a disaster anywhere in the world on short
ii ii ii ii ii ii ii ii ii ii ii ii ii ii ii
notice.
ii
(c) General Motors: (1) To earn income sufficient to provide a good return on
ii ii ii ii ii ii ii ii ii ii ii ii
the investment of the company's stockholders, and (2) to provide the highest-
ii ii ii ii ii ii ii ii ii ii ii ii
quality product possible. ii ii
(d) Wal-Mart: (1) To penetrate the retail market in virtually every location in the United
ii ii ii ii ii ii ii ii ii ii ii ii ii
States, and (2) to grow over time in terms of number of retail locations, total
ii ii ii ii ii ii ii ii ii ii ii ii ii ii ii
assets, and earnings. Also, to be competitive with Amazon in the e-retail
ii ii ii ii ii ii ii ii ii ii ii ii
space.
ii
(e) City of Seattle: (1) To maintain an urban environment as free of pollution as
ii ii ii ii ii ii ii ii ii ii ii ii ii
possible, and (2) to provide public safety, police, and fire protection to the city's
ii ii ii ii ii ii ii ii ii ii ii ii ii ii
citizens.
ii
(f) Hertz: (1) To be a recognizable household name associated with rental car
ii ii ii ii ii ii ii ii ii ii ii
services, and (2) to provide reliable and economical transportation services to the
ii ii ii ii ii ii ii ii ii ii ii ii
company's customers.
ii ii
1-3 The i i four i i basic i i management ii activities i i are i i listed ii and i i defined i i as i i follows:
(a) Decision i i making: i i Choosing i i among i i the i i available i i alternatives.
(b) Planning: Developing a detailed financial and operationalii ii ii ii ii ii
description ofanticipated operations.
ii ii i ii
(c) Directing ii operations: i i Running i i the ii organization i i on i i a ii day-to-day ii basis.
(d) Controlling: Ensuring that the organization operates in the intendedii ii ii ii ii ii ii ii
manner andachieves its goals.
ii ii i ii 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 ii1: iiThe iiChanging iiRole iiof iiManagerial iiAccounting iiin iia iiDynamic iiBusiness
ii EnvironmentiChapter ii2: iiBasic iiCost iiManagement iiConcepts
Chapter ii3: iiProduct iiCosting iiand iiCost iiAccumulation iiin iia iiBatch iiProduction iiEnvironment
Chapter ii4: iiProcess iiCosting iiand iiHybrid iiProduct-Costing iiSystems
i
Chapter ii5: iiActivity-Based iiCosting iiand iiManagement
Chapter ii6: iiActivity iiAnalysis, iiCost iiBehavior, iiand iiCost
ii EstimationiChapter ii7: iiCost-Volume-Profit iiAnalysis
Chapter ii8: iiVariable iiCosting iiand iithe iiMeasurement iiof iiESG iiand iiQuality iiCosts
Chapter ii9: iiFinancial iiPlanning iiand iiAnalysis: iiThe iiMaster iiBudget
i
Chapter ii10: iiStandard iiCosting iiand iiAnalysis iiof iiDirect iiCosts
Chapter ii11: iiFlexible iiBudgeting iiand iithe iiManagement iiof iiOverhead iiand iiSupport iiActivity
ii CostsiChapter ii12: iiResponsibility iiAccounting iiand iithe iiBalanced iiScorecard
Chapter ii13: iiInvestment iiCenters iiand iiTransfer iiPricing
ii Chapter ii14: iiDecision iiMaking: iiRelevant iiCosts iiand iiBenefits
Chapter ii15: iiTarget iiCosting iiand iiCost iiAnalysis iifor iiPricing
ii DecisionsiChapter ii16: iiCapital iiExpenditure iiDecisions
Chapter ii17: iiAllocation iiof iiSupport iiActivity iiCosts iiand iiJoint iiCosts
Appendix iiI: iiThe iiSarbanes-Oxley iiAct, iiInternal iiControls, iiand iiManagement iiAccountingiAppendix
ii II: iiCompound iiInterest iiand iithe iiConcept iiof iiPresent iiValue
Appendix iiIII: iiInventory iiManagement
,CHAPTER 1 ii
The Crucial Role of Managerial Accounting in a
ii ii ii ii ii ii ii
Dynamic Business Environment
ii ii ii
FOCUS ON ETHICS (Located before the Chapter Summary in the text.)
ii ii ii ii ii ii ii ii ii ii
The focus-on-ethics inset for Chapter 1 is the IMA Statement of Ethical Professional Practice.
ii ii ii ii ii ii ii ii ii ii ii ii ii
Instructors can use this list of ethical principles and standards to lead a class discussion.
ii ii ii ii ii ii ii i i i i ii ii ii ii ii ii
The discussion can also range to consideration of how these standards may have been
ii ii ii ii ii ii ii ii ii ii ii ii ii ii
violated by accountants and managers involved in the various ethical scandals uncovered
ii ii ii ii ii ii ii ii ii i i ii ii
over the past several years. It is also useful to discuss the pros and cons of the procedures
ii ii ii ii ii ii ii ii ii ii ii ii ii ii ii ii ii ii
that IMA suggests for its members when they believe they know about ethical lapses in
ii ii ii ii ii ii ii ii ii ii ii ii ii ii ii
their organizations.
ii ii
ANSWERS TO REVIEW QUESTIONS ii ii ii
1-1 The explosion in e-commerce will affect managers in significant ways. One
ii ii ii ii ii ii ii ii ii ii
effect will be a drastic reduction in paper work. Millions of transactions between
ii ii ii ii ii ii ii ii ii ii ii ii ii
businesses
ii are now being conducted electronically with no hard-copy ii ii ii ii ii ii ii ii
documentation. Along with this method of communicating for business transactions
ii ii ii i ii ii ii ii ii ii
comes the very significant issue of information security. Businesses need to find
ii ii ii ii ii ii ii ii ii ii ii ii
ways to protect confidential information in their own computers, in cloud
ii ii ii ii ii ii ii ii ii ii ii
computing data centers, and while moving across the internet, while at the
ii ii ii ii ii ii ii ii ii ii ii ii
same time sharing the information necessary to complete transactions. Another
ii ii ii ii ii ii ii ii ii ii
effect of e-commerce is the dramatically increased speed with which business
ii ii ii ii ii ii ii ii ii ii ii
transactions can be conducted. In addition, there will be dramatic changes in the
ii ii ii ii ii ii ii ii ii ii ii ii ii
way managerial accounting procedures are carried out, one example being cloud-
ii ii ii ii ii ii ii ii ii ii ii
based budgeting, which is the enterprise-wide and electronic completion of a
ii ii ii ii ii ii ii i ii ii
company’s budgeting process using cloud-based software and data storage.
ii ii ii ii ii ii ii ii ii
, 1-2 Plausible i i goals i i for i i the i i organizations i i listed ii are i i as i i follows:
(a) Amazon.com: (1) To achieve and maintain profitability, and (2) to grow on- ii ii ii ii ii ii ii ii ii ii ii
line sales of their many products. Amazon is also famous (infamous) for wanting
ii ii ii ii ii ii ii ii ii ii ii ii
to have every product in the world on its site.
ii ii ii ii ii ii ii ii ii ii
(b) American Red Cross: (1) To raise funds from the general public sufficient to have
ii ii ii ii ii ii ii ii ii ii ii ii ii
resources available to meet any disaster that may occur, and (2) to provide
ii ii ii ii ii ii ii ii ii ii ii ii ii
assistance to people who are victims of a disaster anywhere in the world on short
ii ii ii ii ii ii ii ii ii ii ii ii ii ii ii
notice.
ii
(c) General Motors: (1) To earn income sufficient to provide a good return on
ii ii ii ii ii ii ii ii ii ii ii ii
the investment of the company's stockholders, and (2) to provide the highest-
ii ii ii ii ii ii ii ii ii ii ii ii
quality product possible. ii ii
(d) Wal-Mart: (1) To penetrate the retail market in virtually every location in the United
ii ii ii ii ii ii ii ii ii ii ii ii ii
States, and (2) to grow over time in terms of number of retail locations, total
ii ii ii ii ii ii ii ii ii ii ii ii ii ii ii
assets, and earnings. Also, to be competitive with Amazon in the e-retail
ii ii ii ii ii ii ii ii ii ii ii ii
space.
ii
(e) City of Seattle: (1) To maintain an urban environment as free of pollution as
ii ii ii ii ii ii ii ii ii ii ii ii ii
possible, and (2) to provide public safety, police, and fire protection to the city's
ii ii ii ii ii ii ii ii ii ii ii ii ii ii
citizens.
ii
(f) Hertz: (1) To be a recognizable household name associated with rental car
ii ii ii ii ii ii ii ii ii ii ii
services, and (2) to provide reliable and economical transportation services to the
ii ii ii ii ii ii ii ii ii ii ii ii
company's customers.
ii ii
1-3 The i i four i i basic i i management ii activities i i are i i listed ii and i i defined i i as i i follows:
(a) Decision i i making: i i Choosing i i among i i the i i available i i alternatives.
(b) Planning: Developing a detailed financial and operationalii ii ii ii ii ii
description ofanticipated operations.
ii ii i ii
(c) Directing ii operations: i i Running i i the ii organization i i on i i a ii day-to-day ii basis.
(d) Controlling: Ensuring that the organization operates in the intendedii ii ii ii ii ii ii ii
manner andachieves its goals.
ii ii i ii ii
