Managerial Accounting
13th Canadian Edition
by Ray H. Garrison
Complete Chapter Solutions Manual
are included (Ch 1 to 14)
** Immediate Download
** Swift Response
** All Chapters included
** Cases solutions included
** Exercises and Problems
** Excel Solutions
,Chapter 1
Managerial Accounting and
the Business Environment
Solution to Discussion Case
Benefits to employees of having a code of conduct:
• Creates clarity as to how all employees are expected to behave. This should help
employees avoid behaviours that the company prohibits.
• Provides protection for employees when dealing with superiors given the guide-
lines related to protection from discrimination and harassment.
• Establishes guidelines for workplace safety, which should help protect the health
of employees.
• Provides information on the consequences of code violations, which will help un-
derstand employees understand the outcomes of prohibited behaviours, if de-
tected.
• Provides guidance as to what employees should do if they witness a violation of
the code and protects those employees who do report an incident.
Disadvantages to CIBC of having a code of conduct:
• May create the impression among employees that they are not trusted by senior
management to act appropriately.
• The obligation to report violations could create a culture of suspicion and mis-
trust among employees.
• Enforcing the code may be costly and time consuming in large organizations
such as CIBC. For example, investigations of possible violations could take
weeks.
• CIBC may be at a competitive disadvantage versus firms that have a less ‘restric-
tive’ code of behaviour.
, Solutions to Questions
1-1 Given rapid changes to the competitive Cavity Protection toothpaste, Crest Extra Whit-
environment in many industries, having infor- ening toothpaste, and Crest Sensitivity tooth-
mation on a timely basis to make decisions is paste).
critical. For example, getting timely information
on customer reactions to product changes, price 1-7 Managerial accounting plays an im-
changes, new marketing campaigns, and so on, portant role in strategic management by provid-
is necessary to allow managers to decide if fur- ing information to allow managers to effectively
ther changes are needed and to make plans for implement strategy and to monitor progress to-
those changes. wards achieving strategic objectives. For exam-
ple, performance measurement systems usually
1-2 Directing activities involve mobilizing contain metrics related to the organization’s tar-
people to carry out plans and run routine opera- get customers (e.g., customer satisfaction) to
tions on a day-to-day basis. Controlling activities whom the value proposition is being delivered.
involve ensuring that the plan is actually carried
out and is appropriately modified as circum- 1-8 Planning, controlling, directing and moti-
stances change. As such, controlling is an ‘after vating, and decision making must be performed
the fact’ test versus plan. within the context of a company’s strategy. For
example, if a company that competes as a prod-
1-3 A budget is a detailed quantitative plan uct leader plans to grow too quickly, it may di-
for the acquisition and use of financial and other minish quality and threaten the company’s cus-
resources over a specified future time period. tomer value proposition. A company that com-
petes in terms of operational excellence would
1-4 Predictive analytics could be used to es- select control measures that focus on time-
timate any number of metrics such as sales vol- based performance, convenience, and cost. A
umes, customer returns, customer satisfaction, company that competes in terms of customer in-
warranty returns, product defects and so on. timacy may decide against outsourcing em-
ployee training to cut costs because it might di-
1-5 A performance reports compares actual minish the quality of customer service.
results to expected or budgeted results and is
prepared on a periodic basis (e.g., monthly). Be- 1-9 The six business functions that make
cause it allows managers to see if actual results the value chain are: (1) research and develop-
have departed from the plan, it can allow them ment; (2) product design; (3) manufacturing;
to take corrective action where necessary. Per- (4) marketing; (5) distribution; and (6) customer
formance reports can also be used to evaluate service.
the performance of employees or business seg-
ments such as product lines. As such, perfor- 1-10 Examples of things socially responsible
mance reports can be a very important part of organizations should provide for their employees
the control process in any organization. include: (1) safe and comfortable working condi-
tions; (2) fair compensation; (3) job-training and
1-6 The Royal Bank of Canada could seg- opportunities for advancement; and (4) non-dis-
ment its companywide performance by individ- criminatory treatment and the right to file griev-
ual customer, by geographic area (e.g., province ances;
or country), and by product line (e.g. asset
management, personal loans, mortgages, etc.). 1-11 Airlines face the risk that large spikes in
Procter & Gamble could segment its perfor- fuel prices will lower their profitability. There-
mance by product category (e.g., beauty and fore, they need to estimate future fuel prices
grooming, household care, and health and well- and create a business plan based on these esti-
being), product line (e.g., Crest, Tide, and mates. Monitoring actual fuel prices as com-
Bounty), and stock keeping units (e.g., Crest pared to plan may lead to decisions to change
ticket prices, for example. Further, exposure to
13th Canadian Edition
by Ray H. Garrison
Complete Chapter Solutions Manual
are included (Ch 1 to 14)
** Immediate Download
** Swift Response
** All Chapters included
** Cases solutions included
** Exercises and Problems
** Excel Solutions
,Chapter 1
Managerial Accounting and
the Business Environment
Solution to Discussion Case
Benefits to employees of having a code of conduct:
• Creates clarity as to how all employees are expected to behave. This should help
employees avoid behaviours that the company prohibits.
• Provides protection for employees when dealing with superiors given the guide-
lines related to protection from discrimination and harassment.
• Establishes guidelines for workplace safety, which should help protect the health
of employees.
• Provides information on the consequences of code violations, which will help un-
derstand employees understand the outcomes of prohibited behaviours, if de-
tected.
• Provides guidance as to what employees should do if they witness a violation of
the code and protects those employees who do report an incident.
Disadvantages to CIBC of having a code of conduct:
• May create the impression among employees that they are not trusted by senior
management to act appropriately.
• The obligation to report violations could create a culture of suspicion and mis-
trust among employees.
• Enforcing the code may be costly and time consuming in large organizations
such as CIBC. For example, investigations of possible violations could take
weeks.
• CIBC may be at a competitive disadvantage versus firms that have a less ‘restric-
tive’ code of behaviour.
, Solutions to Questions
1-1 Given rapid changes to the competitive Cavity Protection toothpaste, Crest Extra Whit-
environment in many industries, having infor- ening toothpaste, and Crest Sensitivity tooth-
mation on a timely basis to make decisions is paste).
critical. For example, getting timely information
on customer reactions to product changes, price 1-7 Managerial accounting plays an im-
changes, new marketing campaigns, and so on, portant role in strategic management by provid-
is necessary to allow managers to decide if fur- ing information to allow managers to effectively
ther changes are needed and to make plans for implement strategy and to monitor progress to-
those changes. wards achieving strategic objectives. For exam-
ple, performance measurement systems usually
1-2 Directing activities involve mobilizing contain metrics related to the organization’s tar-
people to carry out plans and run routine opera- get customers (e.g., customer satisfaction) to
tions on a day-to-day basis. Controlling activities whom the value proposition is being delivered.
involve ensuring that the plan is actually carried
out and is appropriately modified as circum- 1-8 Planning, controlling, directing and moti-
stances change. As such, controlling is an ‘after vating, and decision making must be performed
the fact’ test versus plan. within the context of a company’s strategy. For
example, if a company that competes as a prod-
1-3 A budget is a detailed quantitative plan uct leader plans to grow too quickly, it may di-
for the acquisition and use of financial and other minish quality and threaten the company’s cus-
resources over a specified future time period. tomer value proposition. A company that com-
petes in terms of operational excellence would
1-4 Predictive analytics could be used to es- select control measures that focus on time-
timate any number of metrics such as sales vol- based performance, convenience, and cost. A
umes, customer returns, customer satisfaction, company that competes in terms of customer in-
warranty returns, product defects and so on. timacy may decide against outsourcing em-
ployee training to cut costs because it might di-
1-5 A performance reports compares actual minish the quality of customer service.
results to expected or budgeted results and is
prepared on a periodic basis (e.g., monthly). Be- 1-9 The six business functions that make
cause it allows managers to see if actual results the value chain are: (1) research and develop-
have departed from the plan, it can allow them ment; (2) product design; (3) manufacturing;
to take corrective action where necessary. Per- (4) marketing; (5) distribution; and (6) customer
formance reports can also be used to evaluate service.
the performance of employees or business seg-
ments such as product lines. As such, perfor- 1-10 Examples of things socially responsible
mance reports can be a very important part of organizations should provide for their employees
the control process in any organization. include: (1) safe and comfortable working condi-
tions; (2) fair compensation; (3) job-training and
1-6 The Royal Bank of Canada could seg- opportunities for advancement; and (4) non-dis-
ment its companywide performance by individ- criminatory treatment and the right to file griev-
ual customer, by geographic area (e.g., province ances;
or country), and by product line (e.g. asset
management, personal loans, mortgages, etc.). 1-11 Airlines face the risk that large spikes in
Procter & Gamble could segment its perfor- fuel prices will lower their profitability. There-
mance by product category (e.g., beauty and fore, they need to estimate future fuel prices
grooming, household care, and health and well- and create a business plan based on these esti-
being), product line (e.g., Crest, Tide, and mates. Monitoring actual fuel prices as com-
Bounty), and stock keeping units (e.g., Crest pared to plan may lead to decisions to change
ticket prices, for example. Further, exposure to
