SOLUTIONMANUAL b
Horngren's Accounting, 13th Edition Managerial
b b b b
by Tracie Miller-Nobles, Brenda Mattison, All Chapter 1-9
b b b b b b b
,THE MANAGERIAL CHAPTERS
b b
1. Introduction to Managerial Accounting
b b b
2. Job Order Costing
b b
3. Process Costing
b
4. Cost-Volume-Profit Analysis b
5. Master Budgets
b
6. Flexible Budgets and Standard Cost Systems
b b b b b
7. Cost Allocation and Responsibility Accounting
b b b b
8. Short-Term Business Decisions
b b
9. Capital Investment Decisions
b b
,Chapter 1 b
Introduction to Managerial Accounting
b b b
Review Questions
b b
1. The b primary b purpose b of b managerial b accounting b is b to b provide b information b to b help b
managers b plan, b direct, b control, b and b make b decisions.
2. Financial b accounting b and b managerial b accounting b differ b on b the b following b 6 b dimensions: b (1) b
primary b users, b (2) b purpose b of b information, b (3) b focus b and b time b dimension b of b the b
information, b (4) b rules b and b restrictions, b (5) b scope b of b information, b and b (6) b behavioral.
3. Line b positions b are b directly b involved b in b providing b goods b or b services b to b customers. b Staff b
positions b support b line b positions.
4. Planning b means b choosing b goals b and b deciding b how b to b achieve b them. b Directing b involves b running b the
b day- b to-day b operations b of b a b business. b Controlling b is b the b process b of b monitoring b operations b and b
keepingthe b company b on b track.
5. The b four b IMA b standards b of b ethical b practice b and b a b description b of b each b follow.
I. Competence.
Maintain b an b appropriate b level b of b professional b leadership b and b expertise b by b
enhancing b knowledge band b skills.
Perform b professional b duties b in b accordance b with b relevant b laws, b regulations, b and b
technical b standards.
Provide b decision b support b information b and b recommendations b that b are b accurate, b clear, b
concise, b and b timely.
Recognise b and b help b mange b risk.
II. Confidentiality.
Keep b information b confidential b except b when b disclosure b is b authorized b or b legally b required.
b Inform b all b relevant b parties b regarding b appropriate b use b of b confidential b information. b
Monitor b to b ensure bcompliance.
b Refrain b from b using b confidential b information b for b unethical b or b illegal b advantage.
III. Integrity.
Mitigate b actual b conflicts b of b interest. b Regularly bcommunicate b with b business b associates b to b
avoid b apparent b conflicts b of b interest. b Advise b all b parties b of b any b potential b conflicts.
Refrain b from b engaging b in b any b conduct b that b would b prejudice b carrying b out b duties b ethically.
, Abstain b from b engaging b in b or b supporting b any bactivity b that b might b discredit b the b
profession. b Contribute b to b a b positive b ethical b culture b and b place b integrity b of b the b
profession b above b personal b interest.
5, b
cont.
IV. Credibility.
Communicate b information b fairly b and b objectively.
Provide b all b relevant b information b that b could b reasonably b be b expected b to b influence b an b
intended b user’s b understanding b of b the b reports, b analyses, b or b recommendations.
Report b any bdelays b or b deficiencies b in b information, b timeliness, b processing, b or b internal b
controlsin b conformance b with b organization b policy b and/or b applicable b law.
Communicate b any b professional b limitations b or b other b constraints b that b would b preclude b
responsi- b ble b judgment b or b successful b performance b of b an b activity.
6. Service b companies b sell b time, b skills, b and b knowledge. b Examples b of b service b companies b include b
phone b service b companies, b banks, b cleaning b service b companies, b accounting b firms, b law b firms, b
medical b physicians, b and b online b auction b services.
7. Merchandising b companies b resell b products b they b buy b from b suppliers. b Merchandisers b keep b an b
inventoryof b products, b and b managers b are b accountable b for b the b purchasing, b storage, b and b sale b of b
the b products. b Examples b of b merchandising b companies b include b toy b stores, b grocery b stores, b and b
clothing b stores.
8. Merchandising b companies b resell b products b they b previously b bought b from b suppliers, b whereas b
manufacturing b companies b use b labor, b equipment, b supplies, b and b facilities b to b convert b raw b
materials b into b new b finished b products. b In b contrast b to b merchandising b companies, b manufacturing
b companies b have b a b broad b range b of b production b activities b that b require b tracking b costs b on b
three b kinds b of b inventory.
9. The b three b inventory b accounts b used b by b manufacturing b companies b are b Raw b Materials b Inventory, b
Work-in- b Process b Inventory, b and b Finished b Goods b Inventory.
Raw b Materials b Inventory b includes b materials b used b to b manufacture b a b product. b Work-in-
ProcessInventory b includes b goods b that b have b been b started b in b the b manufacturing b process b but b are b
not b yet b complete. b Finished b Goods b Inventory b includes b completed b goods b that b have b not b yet b
been b sold.
10. A b direct b cost b is b a b cost b that b can b be b easily b and b cost-effectively b traced b to b a b cost b object b (which b
is b anything b for b which b managers b want b a b separate b measurement b of b cost). b An b indirect b cost b is b a
b cost b thatcannot b be b easily b or b cost-effectively b traced b to b a b cost b object.
11. The b three b manufacturing b costs b for b a b manufacturing b company b are b direct b materials, b direct b labor,
b and b manufacturing b overhead. b Direct b materials b are b materials b that b become b a b physical b part b of b
a b finished b product b and b whose b costs b are b easily b traceable b to b the b finished b product. b Direct b
labor b is b the b labor b cost b of b the b employees b who b convert b materials b into b finished b products. b
Manufacturing b overhead b includes b all b manufacturing b costs b except b direct b materials b and b direct b
labor, b such b as b indirect b materials, b indirect b labor, b factory b depreciation, b factory b rent, b and b
factory b property b taxes.
Horngren's Accounting, 13th Edition Managerial
b b b b
by Tracie Miller-Nobles, Brenda Mattison, All Chapter 1-9
b b b b b b b
,THE MANAGERIAL CHAPTERS
b b
1. Introduction to Managerial Accounting
b b b
2. Job Order Costing
b b
3. Process Costing
b
4. Cost-Volume-Profit Analysis b
5. Master Budgets
b
6. Flexible Budgets and Standard Cost Systems
b b b b b
7. Cost Allocation and Responsibility Accounting
b b b b
8. Short-Term Business Decisions
b b
9. Capital Investment Decisions
b b
,Chapter 1 b
Introduction to Managerial Accounting
b b b
Review Questions
b b
1. The b primary b purpose b of b managerial b accounting b is b to b provide b information b to b help b
managers b plan, b direct, b control, b and b make b decisions.
2. Financial b accounting b and b managerial b accounting b differ b on b the b following b 6 b dimensions: b (1) b
primary b users, b (2) b purpose b of b information, b (3) b focus b and b time b dimension b of b the b
information, b (4) b rules b and b restrictions, b (5) b scope b of b information, b and b (6) b behavioral.
3. Line b positions b are b directly b involved b in b providing b goods b or b services b to b customers. b Staff b
positions b support b line b positions.
4. Planning b means b choosing b goals b and b deciding b how b to b achieve b them. b Directing b involves b running b the
b day- b to-day b operations b of b a b business. b Controlling b is b the b process b of b monitoring b operations b and b
keepingthe b company b on b track.
5. The b four b IMA b standards b of b ethical b practice b and b a b description b of b each b follow.
I. Competence.
Maintain b an b appropriate b level b of b professional b leadership b and b expertise b by b
enhancing b knowledge band b skills.
Perform b professional b duties b in b accordance b with b relevant b laws, b regulations, b and b
technical b standards.
Provide b decision b support b information b and b recommendations b that b are b accurate, b clear, b
concise, b and b timely.
Recognise b and b help b mange b risk.
II. Confidentiality.
Keep b information b confidential b except b when b disclosure b is b authorized b or b legally b required.
b Inform b all b relevant b parties b regarding b appropriate b use b of b confidential b information. b
Monitor b to b ensure bcompliance.
b Refrain b from b using b confidential b information b for b unethical b or b illegal b advantage.
III. Integrity.
Mitigate b actual b conflicts b of b interest. b Regularly bcommunicate b with b business b associates b to b
avoid b apparent b conflicts b of b interest. b Advise b all b parties b of b any b potential b conflicts.
Refrain b from b engaging b in b any b conduct b that b would b prejudice b carrying b out b duties b ethically.
, Abstain b from b engaging b in b or b supporting b any bactivity b that b might b discredit b the b
profession. b Contribute b to b a b positive b ethical b culture b and b place b integrity b of b the b
profession b above b personal b interest.
5, b
cont.
IV. Credibility.
Communicate b information b fairly b and b objectively.
Provide b all b relevant b information b that b could b reasonably b be b expected b to b influence b an b
intended b user’s b understanding b of b the b reports, b analyses, b or b recommendations.
Report b any bdelays b or b deficiencies b in b information, b timeliness, b processing, b or b internal b
controlsin b conformance b with b organization b policy b and/or b applicable b law.
Communicate b any b professional b limitations b or b other b constraints b that b would b preclude b
responsi- b ble b judgment b or b successful b performance b of b an b activity.
6. Service b companies b sell b time, b skills, b and b knowledge. b Examples b of b service b companies b include b
phone b service b companies, b banks, b cleaning b service b companies, b accounting b firms, b law b firms, b
medical b physicians, b and b online b auction b services.
7. Merchandising b companies b resell b products b they b buy b from b suppliers. b Merchandisers b keep b an b
inventoryof b products, b and b managers b are b accountable b for b the b purchasing, b storage, b and b sale b of b
the b products. b Examples b of b merchandising b companies b include b toy b stores, b grocery b stores, b and b
clothing b stores.
8. Merchandising b companies b resell b products b they b previously b bought b from b suppliers, b whereas b
manufacturing b companies b use b labor, b equipment, b supplies, b and b facilities b to b convert b raw b
materials b into b new b finished b products. b In b contrast b to b merchandising b companies, b manufacturing
b companies b have b a b broad b range b of b production b activities b that b require b tracking b costs b on b
three b kinds b of b inventory.
9. The b three b inventory b accounts b used b by b manufacturing b companies b are b Raw b Materials b Inventory, b
Work-in- b Process b Inventory, b and b Finished b Goods b Inventory.
Raw b Materials b Inventory b includes b materials b used b to b manufacture b a b product. b Work-in-
ProcessInventory b includes b goods b that b have b been b started b in b the b manufacturing b process b but b are b
not b yet b complete. b Finished b Goods b Inventory b includes b completed b goods b that b have b not b yet b
been b sold.
10. A b direct b cost b is b a b cost b that b can b be b easily b and b cost-effectively b traced b to b a b cost b object b (which b
is b anything b for b which b managers b want b a b separate b measurement b of b cost). b An b indirect b cost b is b a
b cost b thatcannot b be b easily b or b cost-effectively b traced b to b a b cost b object.
11. The b three b manufacturing b costs b for b a b manufacturing b company b are b direct b materials, b direct b labor,
b and b manufacturing b overhead. b Direct b materials b are b materials b that b become b a b physical b part b of b
a b finished b product b and b whose b costs b are b easily b traceable b to b the b finished b product. b Direct b
labor b is b the b labor b cost b of b the b employees b who b convert b materials b into b finished b products. b
Manufacturing b overhead b includes b all b manufacturing b costs b except b direct b materials b and b direct b
labor, b such b as b indirect b materials, b indirect b labor, b factory b depreciation, b factory b rent, b and b
factory b property b taxes.
