Solution Manual for Horngren’s Accounting, 13th Edition by Tracie Miller-Nobles & Brenda Mattison

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Horngren'sAccounting,13thEditionManagerial
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byTracieMiller-Nobles,BrendaMattison,AllChapter1-9
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,THE MANAGERIAL CHAPTERS
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1. Introduction to Managerial Accounting aa aa aa




2. Job Order Costing
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3. Process Costing aa




4. Cost-Volume-Profit Analysis aa




5. Master Budgetsaa




6. Flexible Budgets and Standard Cost Systems
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7. Cost Allocation and Responsibility Accounting
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8. Short-Term Business Decisions aa aa




9. Capital Investment Decisions
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,Chapter1 a




IntroductiontoManagerialAccounting a a a




Review Questions a a aa




1. The primary purpose of managerial accounting is to provide information to help managers plan,
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direct, control, and make decisions.
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2. Financial accounting andmanagerial accounting differ on the following 6 dimensions: (1) primary
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ausers, (2) purpose of information, (3) focus and time dimension of the information, (4) rules and
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restrictions, (5) scope of information, and (6) behavioral.
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3. Line positionsare directly involved in providing goodsor services to customers. Staff positions
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asupportline positions.
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4. Planning means choosing goals and deciding how to achieve them. Directing involves running the day- to-
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day operations of a business. Controlling is the process of monitoring operations and keepingthe
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acompanyon track.
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5. The four IMA standards of ethical practice and a description of each follow.
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I. Competence.
Maintain an appropriate level of professional leadership and expertise by enhancing aa aa aa aa aa aa aa aa aa aa




knowledgeandskills. a a a aa




Performprofessional dutiesin accordance with relevant laws,regulations, andtechnical aa aa aa aa aa aa aa aa aa aa




standards. a a




Providedecision supportinformation andrecommendationsthat are accurate,clear, concise, aa aa aa aa aa aa aa aa aa aa




andtimely. a a aa




Recogniseand help mange risk. aa aa aa aa




II. Confidentiality.
Keep information confidential except when disclosure is authorized or legallyrequired. Inform aa aa aa aa aa aa aa aa aa aa a a




all relevant parties regardingappropriate useof confidential information. Monitor to
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ensurecompliance. a a a




Refrain from usingconfidential information forunethical or illegal advantage.
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III. Integrity.
Mitigateactual conflictsofinterest.Regularlycommunicatewith businessassociates toavoid aa aa aa aa aa a aa aa aa aa aa




apparent conflicts of interest. Adviseall partiesof anypotentialconflicts.
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Refrain from engagingin anyconduct thatwould prejudicecarryingout duties ethically. aa aa aa aa aa aa aa aa aa aa aa aa

, Abstain from engaging in or supporting anyactivitythat might discredit the profession.
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aContribute to a positive ethical culture andplace integrity of the profession above personal
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ainterest.a




5,cont.
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IV. Credibility.
Communicate information fairlyand objectively. aa aa aa aa




Provide all relevant information that could reasonablybe expected to influence an intended aa aa aa aa aa aa aa aa aa aa aa aa




user’sunderstanding of the reports, analyses,or recommendations. a a aa aa aa aa aa aa aa




Reportanydelays or deficiencies in information, timeliness, processing, or internal controlsin aa a aa aa aa aa aa aa aa aa aa




conformance with organization policyand/or applicable law. a a aa aa aa aa aa aa




Communicateany professional limitations orother constraintsthat would preclude responsi- ble aa aa aa aa aa aa aa aa aa aa a a




judgment or successful performance ofan activity. aa aa aa aa aa aa aa




6. Servicecompaniessell time, skills, andknowledge. Examples of service companies include phone
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servicecompanies, banks,cleaningservice companies,accounting firms, law firms, medical physicians,
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and online auction services.
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7. Merchandising companiesresell productsthey buy from suppliers. Merchandisers keep an inventoryof aa aa aa aa aa aa aa aa aa aa aa




products, and managers are accountable for the purchasing, storage, and sale of the products. Examples
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of merchandising companies include toy stores, grocerystores, and clothing stores.
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8. Merchandisingcompaniesresell productsthey previously boughtfrom suppliers, whereas aa a aa aa aa aa aa aa aa




manufacturingcompaniesuse labor,equipment,supplies, and facilitiesto convert raw materialsinto
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new finished products. In contrast to merchandising companies, manufacturing companieshave a
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broad range of production activities that require tracking costs on three kindsof inventory.
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9. The three inventory accounts used by manufacturing companiesareRaw Materials Inventory, Work-in-
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ProcessInventory, and Finished Goods Inventory.
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Raw Materials Inventory includes materials used to manufacture a product. Work-in-ProcessInventory
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aincludes goods that have been started in the manufacturing process but are not yet complete. Finished
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aGoods Inventoryincludes completed goods that have not yet beensold.
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10. A direct cost is a cost that can be easily and cost-effectively traced to a cost object (which is anything for
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which managers wanta separate measurement of cost). An indirect cost is a cost thatcannot be easilyor
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cost-effectivelytraced to a cost object.
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11. The three manufacturing costs for a manufacturing company are direct materials, direct labor, and
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manufacturing overhead. Direct materialsare materials that become a physical partof a finished
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product and whose costs are easilytraceable to the finished product. Direct laboris the labor cost of
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the employeeswhoconvertmaterialsinto finished products. Manufacturing overheadincludes all
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manufacturing costsexcept direct materialsand direct labor, such as indirect materials, indirect labor,
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factorydepreciation, factoryrent, and factorypropertytaxes.
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