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Horngren's Cost Accounting, A Managerial Emphasis 17th Edition By Srikant Datar, Madhav Rajan (Solution Manual) $16.49
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Horngren's Cost Accounting, A Managerial Emphasis 17th Edition By Srikant Datar, Madhav Rajan (Solution Manual)
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Horngren's Cost Accounting, A Managerial Emphasis, 17e Srikant Datar, Madhav Rajan (Solution Manual) Horngren's Cost Accounting, A Managerial Emphasis, 17e Srikant Datar, Madhav Rajan (Solution Manual)

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  • March 20, 2023
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  • 2022/2023
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Solutions Manual
For


Horngren’s Cost Accounting
17th Edition




Srikant M. Datar
Madhav V. Rajan

, CHAPTER 1
THE MANAGER AND MANAGEMENT ACCOUNTING

See the front matter of this Solutions Manual for suggestions regarding your choices of
assignment material for each chapter.

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

1-2 Financial accounting is constrained by generally accepted accounting principles.
Management accounting is not restricted to these principles. The result is that
• management accounting allows managers to charge interest on owners’ capital to help
judge a division’s performance, even though such a charge is not allowed under
GAAP,
• management accounting can include assets or liabilities (such as “brand names”
developed internally) not recognized under GAAP, and
• management accounting can use asset or liability measurement rules (such as present
values or resale prices) not permitted under GAAP.

1-3 Management accountants can help to formulate, communicate and implement strategy by
providing information about the sources of competitive advantage—for example, the cost,
productivity, or efficiency advantage of their company relative to competitors or the premium
prices a company can charge relative to the costs of adding features that make its products or
services distinctive.

1-4 The business functions in the value chain are
• Research and development—generating and experimenting with ideas related to new
products, services, or processes.
• Design of products and processes—detailed planning, engineering, and testing of
products and processes.
• Production—procuring, transporting, storing, coordinating and assembling resources
to produce a product or deliver a service.
• Marketing—promoting and selling products or services to customers or prospective
customers.
• Distribution—processing orders and shipping products or delivering services to
customers.
• Customer service—providing after-sales service to customers.




1-1

,1-5 Supply chain describes the flow of goods, services, and information from the initial
sources of materials and services to the delivery of products to consumers, regardless of whether
those activities occur in one organization or in multiple organizations.
Cost management is most effective when it integrates and coordinates activities across all
companies in the supply chain as well as across each business function in an individual
company’s value chain. Attempts are made to restructure all cost areas to be more cost-effective.

1-6 “Management accounting deals only with costs.” This statement is misleading at best,
and wrong at worst. Management accounting measures, analyzes, and reports financial and
nonfinancial information that helps managers define the organization’s goals and make decisions
to fulfill those goals. Management accounting also analyzes revenues from products and
customers in order to assess product and customer profitability. Therefore, while management
accounting does use cost information, it is only a part of the organization’s information recorded
and analyzed by management accountants.

1-7 Management accountants can help improve quality and achieve timely product deliveries
by recording and reporting an organization’s current quality and timeliness levels and by
analyzing and evaluating the costs and benefits—both financial and nonfinancial—of new
quality initiatives, such as TQM, relieving bottleneck constraints, or providing faster customer
service.

1-8 The five-step decision-making process is (1) identify the problem and uncertainties;
(2) obtain information; (3) make predictions about the future; (4) make decisions by choosing
among alternatives; and (5) implement the decision, evaluate performance, and learn.

1-9 Planning decisions focus on selecting organization goals and strategies, predicting results
under various alternative ways of achieving those goals, deciding how to attain the desired goals,
and communicating the goals and how to attain them to the entire organization.
Control decisions focus on taking actions that implement the planning decisions, deciding
how to evaluate performance, and providing feedback and learning to help future decision
making.

1-10 The three guidelines for management accountants are:
1. Employ a cost-benefit approach.
2. Recognize technical and behavioral considerations.
3. Apply the notion of “different costs for different purposes.”

1-11 Agree. A successful management accountant requires general business skills (such as
understanding the strategy of an organization) and people skills (such as motivating other team
members) as well as technical skills (such as computer knowledge, calculating costs of products,
and supporting planning and control decisions).




1-2

, 1-12 The new controller could reply in one or more of the following ways:
(a) Demonstrate to the plant manager how he or she could make better decisions if the
plant controller was viewed as a resource rather than a deadweight. In a related way,
the plant controller could show how the plant manager’s time and resources could be
saved by viewing the new plant controller as a team member.
(b) Demonstrate to the plant manager a good knowledge of the technical aspects of the
plant. This approach may involve doing background reading. It certainly will involve
spending time on the plant floor speaking to plant personnel.
(c) Show the plant manager examples of the new plant controller’s past successes in
working with line managers in other plants. Examples could include
• assistance in preparing the budget,
• assistance in analyzing problem situations and evaluating financial and
nonfinancial aspects of different alternatives, and
• assistance in submitting capital budget requests.
(d) Seek assistance from the corporate controller to highlight to the plant manager the
importance of many tasks undertaken by the new plant controller. This approach is a
last resort but may be necessary in some cases.

1-13 The controller is the chief management accounting executive. The corporate controller
reports to the chief financial officer, a staff function. Companies also have business unit
controllers who support business unit managers or regional controllers who support regional
managers in major geographic regions.

1-14 The Institute of Management Accountants (IMA) sets standards of ethical conduct for
management accountants in the following four areas:
• Competence
• Confidentiality
• Integrity
• Credibility

1-15 Steps to take when established written policies provide insufficient guidance are as
follows:
(a) Discuss the problem with the immediate superior (except when it appears that the
superior is involved).
(b) Clarify relevant ethical issues by confidential discussion with an IMA Ethics
Counselor or other impartial advisor.
(c) Consult your own attorney as to legal obligations and rights concerning the ethical
conflicts.

1-16 (a) Communicating financial results and position to external parties is not a primary
function of the management accountant. This is the function of the financial accountant.




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