Solution Manual u
Managerial Accounting u
by ffiarrison Noreen
Uploaded by u
Mudassar Hassan u
University of Sargodha
u u
,Chapter 1 u
Managerial Accounting and the Business
u u u u u
Environment
SolutionsutouQuestions
1-1 Managerialuaccountinguisuconcerneduwithup fromumakinguoneuproductutoumakinguanotherual-
rovidinguinformationutoumanagersuforuuseuwithinuth ulowsuthe ucompanyutourespondumoreuquicklyutoucus-
euorganization.uFinancialuaccountinguisucon- tomers.uFinally,usmallerubatchesumakeuitueasierutous
u
ucerned uwithuprovidinguinformationutoustockholders potumanufacturinguproblemsubeforeutheyuresultuinuaul
,ucreditors,uanduothersuoutsideuofutheuorganization. argeunumberuofudefectiveuunits.
1-2 Essentially,umanagersucarryuoututhreeuma- 1-7 TheumainubenefitsuofuausuccessfuluJITusys-
ujoruactivities uinuanuorganization:uplanning,udirectin temuareureductionsuin:u(1)ufundsutieduupuinuinven-
u
guandumotivating,uanducontrolling.uAlluthreeuactivitie utories;u(2)uspaceurequirements;u(3)uthroughpututi
suinvolveudecisionumaking. me;uandu(4)udefects.
1-3 TheuPlanninguanduControluCycleuinvolvesuf 1-8 TQMugenerallyuapproachesuimprovementui
ormulatinguplans,uimplementinguplans,umeasuringu nuauseriesuofusmallustepsuthatuareuplanneduanduim-
performance,uanduevaluatingudifferencesubetweenu plementedubyuteamsuofufront-
u
planneduanduactualuperformance. lineuworkers.uProcessuReengineeringuinvolvesucompl
etelyuredesigningubusinessuprocessesufromutheugro
1-4 Aulineupositionuisudirectlyurelatedutoutheuach unduup—oftenuwithutheuuseuofuoutsideuconsultants.
ievementuofutheubasicuobjectivesuofutheuorgani-
uzation.uAustaffupositionuisunotudirectlyurelatedutoutheu 1-9 IfuProcessuReengineeringuisusuccessful,uf
achievementuofuthoseuobjectives;urather,uituisusup- eweruworkersuareuneeded.uIfumanagementure-
uportive,uprovidinguservicesuanduassistance utouotheru uspondsubyulayinguoffuworkers,umoraleuwillualmos
partsuofutheuorganization. tucertainusuffer.
1-5 Inucontrastutoufinancialuaccounting,umana- 1-10 Someubenefitsufromuimprovementueffortsu
ugerialuaccounting:u(1)ufocusesuonutheuneeds uofutheu comeufromucostureductions,ubututheuprimaryubene-
manager;u(2)uplacesumoreuemphasisuonutheufuture; fituisuoftenuanuincreaseuinucapacity.uAtunon-con-
u
(3)uemphasizesurelevanceuanduflexibility,uratherutha ustraints,uincreasesuinucapacityujustuaddutoutheual-
nuprecision;u(4)uemphasizesutheusegmentsuofuanuorg uready-existinguexcessucapacity.uTherefore,uim-
anization;u(5)uisunotugovernedubyuGAAP;uand uprovementueffortsushoulduordinarilyufocusuonutheu
(6) isunotumandatory. constraint.
1-6 Aunumberuofubenefitsuaccrueufromureducedu 1-11 Ifupeopleugenerallyudidunotuactuethicallyuinu
setuputime.uFirst,ureducedusetuputimeuallowsuaucom business,unouoneuwouldutrustuanyoneuelseuandupeo
panyutouproduceuinusmallerubatches,uwhichuinuturnur pleuwouldubeureluctantutouenteruintoubusinessutrans
educesutheuleveluofuinventories.uSecond,ure- actions.uTheuresultuwouldubeulessufundsuraiseduinuca
uducedusetup utimeuallowsuaucompanyutouspendumoreu pitalumarkets,ufewerugoodsuanduservicesuavail-
timeuproducingugoodsuandulessutimeugettingureadyut ableuforusale,uloweruquality,uanduhigheruprices.
u
ouproduce.uThird,utheuabilityutourapidlyuchange
©uTheuMcGraw-HilluCompanies,uInc.,u2006.
SolutionsuManual,uChapteru1 1
,Uploadeduby MudassaruHassan
Exercise 1-1 (10 minutes)
u u u
1. Line
2. Directing and motivating
u u
3. Budgets
4. Planning
5. Staff
6. Decentralization
7. Precision; Nonmonetary data
u u
8. Managerial accounting; Financial accounting
u u u
9. Feedback
10. Controller
11. Performance report u
12. Chief Financial Officer
u u
©uTheuMcGraw-HilluCompanies,uInc.,u2006.uAllurightsureserved.
2 ManagerialuAccounting,u11thuEdition
, Exercise 1-2 (10 minutes)
u u u
1. Total quality management; Process reengineering
u u u u
2. Just-In-Time
3. Nonconstraint
4. Benchmarking
5. Setup
6. Constraint
7. Non-value-added activities u
8. Business process
u
©uTheuMcGraw-HilluCompanies,uInc.,u2006.uAllurightsureserved.
SolutionsuManual,uChapteru1 3
Managerial Accounting u
by ffiarrison Noreen
Uploaded by u
Mudassar Hassan u
University of Sargodha
u u
,Chapter 1 u
Managerial Accounting and the Business
u u u u u
Environment
SolutionsutouQuestions
1-1 Managerialuaccountinguisuconcerneduwithup fromumakinguoneuproductutoumakinguanotherual-
rovidinguinformationutoumanagersuforuuseuwithinuth ulowsuthe ucompanyutourespondumoreuquicklyutoucus-
euorganization.uFinancialuaccountinguisucon- tomers.uFinally,usmallerubatchesumakeuitueasierutous
u
ucerned uwithuprovidinguinformationutoustockholders potumanufacturinguproblemsubeforeutheyuresultuinuaul
,ucreditors,uanduothersuoutsideuofutheuorganization. argeunumberuofudefectiveuunits.
1-2 Essentially,umanagersucarryuoututhreeuma- 1-7 TheumainubenefitsuofuausuccessfuluJITusys-
ujoruactivities uinuanuorganization:uplanning,udirectin temuareureductionsuin:u(1)ufundsutieduupuinuinven-
u
guandumotivating,uanducontrolling.uAlluthreeuactivitie utories;u(2)uspaceurequirements;u(3)uthroughpututi
suinvolveudecisionumaking. me;uandu(4)udefects.
1-3 TheuPlanninguanduControluCycleuinvolvesuf 1-8 TQMugenerallyuapproachesuimprovementui
ormulatinguplans,uimplementinguplans,umeasuringu nuauseriesuofusmallustepsuthatuareuplanneduanduim-
performance,uanduevaluatingudifferencesubetweenu plementedubyuteamsuofufront-
u
planneduanduactualuperformance. lineuworkers.uProcessuReengineeringuinvolvesucompl
etelyuredesigningubusinessuprocessesufromutheugro
1-4 Aulineupositionuisudirectlyurelatedutoutheuach unduup—oftenuwithutheuuseuofuoutsideuconsultants.
ievementuofutheubasicuobjectivesuofutheuorgani-
uzation.uAustaffupositionuisunotudirectlyurelatedutoutheu 1-9 IfuProcessuReengineeringuisusuccessful,uf
achievementuofuthoseuobjectives;urather,uituisusup- eweruworkersuareuneeded.uIfumanagementure-
uportive,uprovidinguservicesuanduassistance utouotheru uspondsubyulayinguoffuworkers,umoraleuwillualmos
partsuofutheuorganization. tucertainusuffer.
1-5 Inucontrastutoufinancialuaccounting,umana- 1-10 Someubenefitsufromuimprovementueffortsu
ugerialuaccounting:u(1)ufocusesuonutheuneeds uofutheu comeufromucostureductions,ubututheuprimaryubene-
manager;u(2)uplacesumoreuemphasisuonutheufuture; fituisuoftenuanuincreaseuinucapacity.uAtunon-con-
u
(3)uemphasizesurelevanceuanduflexibility,uratherutha ustraints,uincreasesuinucapacityujustuaddutoutheual-
nuprecision;u(4)uemphasizesutheusegmentsuofuanuorg uready-existinguexcessucapacity.uTherefore,uim-
anization;u(5)uisunotugovernedubyuGAAP;uand uprovementueffortsushoulduordinarilyufocusuonutheu
(6) isunotumandatory. constraint.
1-6 Aunumberuofubenefitsuaccrueufromureducedu 1-11 Ifupeopleugenerallyudidunotuactuethicallyuinu
setuputime.uFirst,ureducedusetuputimeuallowsuaucom business,unouoneuwouldutrustuanyoneuelseuandupeo
panyutouproduceuinusmallerubatches,uwhichuinuturnur pleuwouldubeureluctantutouenteruintoubusinessutrans
educesutheuleveluofuinventories.uSecond,ure- actions.uTheuresultuwouldubeulessufundsuraiseduinuca
uducedusetup utimeuallowsuaucompanyutouspendumoreu pitalumarkets,ufewerugoodsuanduservicesuavail-
timeuproducingugoodsuandulessutimeugettingureadyut ableuforusale,uloweruquality,uanduhigheruprices.
u
ouproduce.uThird,utheuabilityutourapidlyuchange
©uTheuMcGraw-HilluCompanies,uInc.,u2006.
SolutionsuManual,uChapteru1 1
,Uploadeduby MudassaruHassan
Exercise 1-1 (10 minutes)
u u u
1. Line
2. Directing and motivating
u u
3. Budgets
4. Planning
5. Staff
6. Decentralization
7. Precision; Nonmonetary data
u u
8. Managerial accounting; Financial accounting
u u u
9. Feedback
10. Controller
11. Performance report u
12. Chief Financial Officer
u u
©uTheuMcGraw-HilluCompanies,uInc.,u2006.uAllurightsureserved.
2 ManagerialuAccounting,u11thuEdition
, Exercise 1-2 (10 minutes)
u u u
1. Total quality management; Process reengineering
u u u u
2. Just-In-Time
3. Nonconstraint
4. Benchmarking
5. Setup
6. Constraint
7. Non-value-added activities u
8. Business process
u
©uTheuMcGraw-HilluCompanies,uInc.,u2006.uAllurightsureserved.
SolutionsuManual,uChapteru1 3
