,THE MANAGERIAL CHAPTERS
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1. Introduction to Managerial Accounting
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2. Job Order Costing
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3. Process Costingu
4. Cost-Volume-Profit Analysis u
5. Master Budgets
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6. Flexible Budgets and Standard Cost Systems
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7. Cost Allocation and Responsibility Accounting
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8. Short-Term Business Decisions
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9. Capital Investment Decisions
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,Chapter 1 u
Introduction to Managerial Accounting
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Review Questions
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1. Theuprimaryupurposeuofumanagerialuaccountinguisutouprovideuinformationutouhelpumanagersuplan,udir
ect,ucontrol,uandumakeudecisions.
2. Financialuaccountinguandumanagerialuaccountingudifferuonutheufollowingu6udimensions:u(1)uprimaryuusers
,u(2)upurposeuofuinformation,u(3)ufocusuandutimeudimensionuofutheuinformation,u(4)urulesuandurestriction
s,u(5)uscopeuofuinformation,uandu(6)ubehavioral.
3. Lineupositionsuareudirectlyuinvolveduinuprovidingugoodsuoruservicesutoucustomers.uStaffupositionsusup
portulineupositions.
4. Planningumeansuchoosingugoalsuandudecidinguhowutouachieveuthem.uDirectinguinvolvesurunningutheuday-
to-
dayuoperationsuofuaubusiness.uControllinguisutheuprocessuofumonitoringuoperationsuandukeepingutheucompa
nyuonutrack.
5. TheufouruIMAustandardsuofuethicalupracticeuanduaudescriptionuofueachufollow.
I. Competence.
Maintainuanuappropriateuleveluofuprofessionaluleadershipuanduexpertiseubyuenhancingukn
owledgeuanduskills.
Performuprofessionaludutiesuinuaccordanceuwithurelevantulaws,uregulations,uandutechnicalusta
ndards.
Provideudecisionusupportuinformationuandurecommendationsuthatuareuaccurate,uclear,uconcise,uan
dutimely.
Recogniseuanduhelpumangeurisk.
II. Confidentiality.
Keepuinformationuconfidentialuexceptuwhenudisclosureuisuauthorizeduorulegallyurequired.
Informuallurelevantupartiesuregardinguappropriateuuseuofuconfidentialuinformation.u Monitorutouen
sureucompliance.
Refrainufromuusinguconfidentialuinformationuforuunethicaluoruillegaluadvantage.
III. Integrity.
Mitigateuactualuconflictsuofuinterest.uRegularlyucommunicateuwithubusinessuassociatesutouavoiduapp
arentuconflictsuofuinterest.uuAdviseuallupartiesuofuanyupotentialuconflicts.
Refrainufromuengaginguinuanyuconductuthatuwoulduprejudiceucarryinguoutudutiesuethically.
, Abstainufromuengaginguinuorusupportinguanyuactivityuthatumightudiscreditutheuprofession.
Contributeutouaupositiveuethicalucultureuanduplaceuintegrityuofutheuprofessionuaboveupersonaluint
erest.
5,ucont.
IV. Credibility.
Communicateuinformationufairlyuanduobjectively.
Provideuallurelevantuinformationuthatucouldureasonablyubeuexpectedutouinfluenceuanuintendeduuse
r’suunderstandinguofutheureports,uanalyses,uorurecommendations.
Reportuanyudelaysuorudeficienciesuinuinformation,utimeliness,uprocessing,uoruinternalucontrolsuinuc
onformanceuwithuorganizationupolicyuand/oruapplicableulaw.
Communicateuanyuprofessionalulimitationsuoruotheruconstraintsuthatuwoulduprecludeuresponsi-
ubleujudgmentuorusuccessfuluperformanceuofuanuactivity.
6. Serviceucompaniesusellutime,uskills,uanduknowledge.u Examplesuofuserviceucompaniesuincludeuphoneuservi
ceucompanies,ubanks,ucleaninguserviceucompanies,uaccountingufirms,ulawufirms,umedicaluphysicians,uandu
onlineuauctionuservices.
7. Merchandisingucompaniesureselluproductsutheyubuyufromusuppliers.uMerchandisersukeepuanuinventoryuofup
roducts,uandumanagersuareuaccountableuforutheupurchasing,ustorage,uandusaleuofutheuproducts.uExamplesuo
fumerchandisingucompaniesuincludeutoyustores,ugroceryustores,uanduclothingustores.
8. Merchandisingucompaniesureselluproductsutheyupreviouslyuboughtufromusuppliers,uwhereasumanufacturin
gucompaniesuuseulabor,uequipment,usupplies,uandufacilitiesutouconverturawumaterialsuintounewufinishedupro
ducts.uInucontrastutoumerchandisingucompanies,umanufacturingucompaniesuhaveuaubroadurangeuofuprodu
ctionuactivitiesuthaturequireutrackingucostsuonuthreeukindsuofuinventory.
9. TheuthreeuinventoryuaccountsuusedubyumanufacturingucompaniesuareuRawuMaterialsuInventory,uWork-uin-
ProcessuInventory,uanduFinisheduGoodsuInventory.
RawuMaterialsuInventoryuincludesumaterialsuusedutoumanufactureuauproduct.uWork-in-
ProcessuInventoryuincludesugoodsuthatuhaveubeenustarteduinutheumanufacturinguprocessubutuareunotuyetuco
mplete.u FinisheduGoodsuInventoryuincludesucompletedugoodsuthatuhaveunotuyetubeenusold.
10. Audirectucostuisuaucostuthatucanubeueasilyuanducost-
effectivelyutracedutouaucostuobjectu(whichuisuanythinguforuwhichumanagersuwantuauseparateumeasuremen
tuofucost).uAnuindirectucostuisuaucostuthatucannotubeueasilyuorucost-effectivelyutracedutouaucostuobject.
11. Theuthreeumanufacturingucostsuforuaumanufacturingucompanyuareudirectumaterials,udirectulabor,uanduman
ufacturinguoverhead.uDirectumaterialsuareumaterialsuthatubecomeuauphysicalupartuofuaufinisheduproductuan
duwhoseucostsuareueasilyutraceableutoutheufinisheduproduct.u Directulaboruisutheulaborucostuofutheuemployee
suwhouconvertumaterialsuintoufinisheduproducts.uManufacturinguoverheaduincludesuallumanufacturingucost
suexceptudirectumaterialsuandudirectulabor,usuchuasuindirectumaterials,uindirectulabor,ufactoryudepreciation,u
factoryurent,uandufactoryupropertyutaxes.
