Solution Manual for Financial Accounting, 11th Edition – Libby, Libby & Hodge (Complete, All Chapters)

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Managerial Accounting t




by ffiarrison Noreen



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Mudassar Hassan t




University of Sargodha
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,Chapter 1 t




Managerial Accounting and the BusinessE
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nvironment


SolutionsttotQuestions


1-1 Managerialtaccountingtistconcernedtwithtpr fromtmakingtonetproductttotmakingtanothertal-
ovidingtinformationttotmanagerstfortusetwithinttheto tlowstthetcompanyttotrespondtmoretquicklyttotcus-

rganization.tFinancialtaccountingtistcon- ttomers.tFinally,tsmallertbatchestmaketitteasierttotspo

tcernedtwithtprovidingtinformationttotstockholders,tc ttmanufacturingtproblemstbeforettheytresulttintatlarg
reditors,tandtotherstoutsidetoftthetorganization. etnumbertoftdefectivetunits.

1-2 Essentially,tmanagerstcarrytouttthreetma- 1-7 ThetmaintbenefitstoftatsuccessfultJITtsys-
tjortactivitiestintantorganization:tplanning,tdirectingta ttemtaretreductionstin:t(1)tfundsttiedtuptintinven-

ndtmotivating,tandtcontrolling.tAlltthreetactivitiestinv ttories;t(2)tspacetrequirements;t(3)tthroughput ttim

olvetdecisiontmaking. e;tandt(4)tdefects.

1-3 ThetPlanningtandtControltCycletinvolvestfor 1-8 TQMtgenerallytapproachestimprovementtint
mulatingtplans,timplementingtplans,tmeasuringtperf atseriestoftsmalltstepstthattaretplannedtandtim-
ormance,tandtevaluatingtdifferencestbetweentplann tplementedtbytteamstoftfront-

edtandtactualtperformance. linetworkers.tProcesstReengineeringtinvolvestcompl
etelytredesigningtbusinesstprocessestfromtthetgrou
1-4 Atlinetpositiontistdirectlytrelatedttotthetachie ndtup—oftentwithtthetusetoftoutsidetconsultants.
vementtoftthetbasictobjectivestoftthetorgani-
tzation.tAtstafftpositiontistnottdirectlytrelatedttotthetac 1-9 IftProcesstReengineeringtistsuccessful,tfe
hievementtoftthosetobjectives;trather,tittistsup- wertworkerstaretneeded.tIftmanagementtre-
tportive,tprovidingtservicestandtassistancettotothertp tspondstbytlayingtofftworkers,tmoraletwilltalmosttc

artstoftthetorganization. ertaintsuffer.

1-5 Intcontrastttotfinancialtaccounting,tmana- 1-10 Sometbenefitstfromtimprovementteffortstc
tgerialtaccounting:t(1)tfocusestontthetneedstoftthe tm ometfromtcosttreductions,tbuttthetprimarytbene-
anager;t(2)tplacestmoretemphasistontthetfuture; tfittistoftentantincreasetintcapacity.tAttnon-con-

(3)temphasizestrelevancetandtflexibility,trathertthant tstraints,tincreasestintcapacitytjusttaddttotthetal-

precision;t(4)temphasizestthetsegmentstoftantorganiz tready-existingtexcesstcapacity.tTherefore,tim-

ation;t(5)tistnottgovernedtbytGAAP;tand tprovementteffortstshouldtordinarilytfocustontthetco

(6) istnottmandatory. nstraint.

1-6 Atnumbertoftbenefitstaccruetfromtreducedtse 1-11 Iftpeopletgenerallytdidtnottacttethicallytintbu
tupttime.tFirst,treducedtsetupttimetallowstatcompanyt siness,tnotonetwouldttrusttanyonetelsetandtpeopletw
totproducetintsmallertbatches,twhichtintturntreducestt ouldtbetreluctantttotentertintotbusinessttransactions.
hetleveltoftinventories.tSecond,tre- tThetresulttwouldtbetlesstfundstraisedtintcapitaltmark

tducedtsetupttimetallowstatcompanyttotspendtmoretti ets,tfewertgoodstandtservicestavail-
metproducingtgoodstandtlessttimetgettingtreadyttotpr tabletfortsale,tlowertquality,tandthighertprices.

oduce.tThird,tthetabilityttotrapidlytchange



©tThetMcGraw-HilltCompanies,tInc.,t2006.
SolutionstManual,tChaptert1 1

,Uploadedtby MudassartHassan




Exercise 1-1 (10 minutes)
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1. Line
2. Directing and motivating
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3. Budgets
4. Planning
5. Staff
6. Decentralization
7. Precision; Nonmonetary data
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8. Managerial accounting; Financial accounting
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9. Feedback
10. Controller
11. Performance report t



12. Chief Financial Officer
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©tThetMcGraw-HilltCompanies,tInc.,t2006.tAlltrightstreserved.
2 ManagerialtAccounting,t11thtEdition

, Exercise 1-2 (10 minutes)
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1. Total quality management; Process reengineering
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2. Just-In-Time
3. Nonconstraint
4. Benchmarking
5. Setup
6. Constraint
7. Non-value-added activities t



8. Business process
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©tThetMcGraw-HilltCompanies,tInc.,t2006.tAlltrightstreserved.
SolutionstManual,tChaptert1 3