Test Bank For Cost Accounting. A Managerial Emphasis 14th Edition By Charles T. Horngren, Srikant M. Dakar and Madhav Rajan

, Solutions Manual
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COST
ACCOUNTIN
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THE MANAGER AND MANAGEMENT ACCOUNTING
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See the front matter of this Solutions Manual for suggestions regarding your choices of
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assignment material for each chapter.
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1-1 Management accounting measures, analyzes and reports financial and nonfinancial q q q q q q q q


information that helps managers make decisions to fulfill the goals of an organization. It focuses
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on internal reporting and is not restricted by generally accepted accounting principles (GAAP).
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Financial accounting focuses on reporting to external parties such as investors,
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government agencies, and banks. It measures and records business transactions and provides
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financial statements that are based on generally accepted accounting principles (GAAP).
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Other differences include (1) management accounting emphasizes the future (not the
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past), and (2) management accounting influences the behavior of managers and other employees
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(rather than primarily reporting economic events).
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1-2 Financial accounting is constrained by generally accepted accounting principles.
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Management accounting is not restricted to these principles. The result is that
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 management accounting allows managers to charge interest on owners‘ capital to help q q q q q q q q q q q


judge a division‘s performance, even though such a charge is not allowed under
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GAAP, q


 management accounting can include assets or liabilities (such as ―brand q q q q q q q q q


names‖ developed internally) not recognized under GAAP, and
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 management accounting can use asset or liability measurement rules (such as present q q q q q q q q q q q


values or resale prices) not permitted under GAAP.
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1-3 Management accountants can help to formulate strategy by providing information about
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the sources of competitive advantage—for example, the cost, productivity, or efficiency
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advantage of their company relative to competitors or the premium prices a company can charge
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relative to the costs of adding features that make its products or services distinctive.
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1-4 The business functions in the value chain are
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 Research and development—generating and experimenting with ideas related to new
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products, services, or processes.
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 Design of products and processes—the detailed planning, engineering, and testing of
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products and processes.
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 Production—procuring, transporting, storing and assembling resources to produce q q q q q q q


a product or deliver a service.
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 Marketing—promoting and selling products or services to customers or q q q q q q q q


prospective customers.
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 Distribution—processing orders and shipping products or services to customers. q q q q q q q q


 Customer service—providing after-sales service to customers. q q q q q




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