,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 Costingq
4. Cost-Volume-Profit Analysis q
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 q
Introduction to Managerial Accounting
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Review Questions
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1. Theqprimaryqpurposeqofqmanagerialqaccountingqisqtoqprovideqinformationqtoqhelpqmanagersqplan,qdir
ect,qcontrol,qandqmakeqdecisions.
2. Financialqaccountingqandqmanagerialqaccountingqdifferqonqtheqfollowingq6qdimensions:q(1)qprimaryqusers
,q(2)qpurposeqofqinformation,q(3)qfocusqandqtimeqdimensionqofqtheqinformation,q(4)qrulesqandqrestriction
s,q(5)qscopeqofqinformation,qandq(6)qbehavioral.
3. Lineqpositionsqareqdirectlyqinvolvedqinqprovidingqgoodsqorqservicesqtoqcustomers.qStaffqpositionsqsup
portqlineqpositions.
4. Planningqmeansqchoosingqgoalsqandqdecidingqhowqtoqachieveqthem.qDirectingqinvolvesqrunningqtheqday-
to-
dayqoperationsqofqaqbusiness.qControllingqisqtheqprocessqofqmonitoringqoperationsqandqkeepingqtheqcompa
nyqonqtrack.
5. TheqfourqIMAqstandardsqofqethicalqpracticeqandqaqdescriptionqofqeachqfollow.
I. Competence.
Maintainqanqappropriateqlevelqofqprofessionalqleadershipqandqexpertiseqbyqenhancingqkn
owledgeqandqskills.
Performqprofessionalqdutiesqinqaccordanceqwithqrelevantqlaws,qregulations,qandqtechnicalqsta
ndards.
Provideqdecisionqsupportqinformationqandqrecommendationsqthatqareqaccurate,qclear,qconcise,qan
dqtimely.
Recogniseqandqhelpqmangeqrisk.
II. Confidentiality.
Keepqinformationqconfidentialqexceptqwhenqdisclosureqisqauthorizedqorqlegallyqrequired.
Informqallqrelevantqpartiesqregardingqappropriatequseqofqconfidentialqinformation.q Monitorqtoqen
sureqcompliance.
Refrainqfromqusingqconfidentialqinformationqforqunethicalqorqillegalqadvantage.
III. Integrity.
Mitigateqactualqconflictsqofqinterest.qRegularlyqcommunicateqwithqbusinessqassociatesqtoqavoidqapp
arentqconflictsqofqinterest.qqAdviseqallqpartiesqofqanyqpotentialqconflicts.
Refrainqfromqengagingqinqanyqconductqthatqwouldqprejudiceqcarryingqoutqdutiesqethically.
, Abstainqfromqengagingqinqorqsupportingqanyqactivityqthatqmightqdiscreditqtheqprofession.
Contributeqtoqaqpositiveqethicalqcultureqandqplaceqintegrityqofqtheqprofessionqaboveqpersonalqint
erest.
5,qcont.
IV. Credibility.
Communicateqinformationqfairlyqandqobjectively.
Provideqallqrelevantqinformationqthatqcouldqreasonablyqbeqexpectedqtoqinfluenceqanqintendedquse
r’squnderstandingqofqtheqreports,qanalyses,qorqrecommendations.
Reportqanyqdelaysqorqdeficienciesqinqinformation,qtimeliness,qprocessing,qorqinternalqcontrolsqinqc
onformanceqwithqorganizationqpolicyqand/orqapplicableqlaw.
Communicateqanyqprofessionalqlimitationsqorqotherqconstraintsqthatqwouldqprecludeqresponsi-
qbleqjudgmentqorqsuccessfulqperformanceqofqanqactivity.
6. Serviceqcompaniesqsellqtime,qskills,qandqknowledge.q Examplesqofqserviceqcompaniesqincludeqphoneqservi
ceqcompanies,qbanks,qcleaningqserviceqcompanies,qaccountingqfirms,qlawqfirms,qmedicalqphysicians,qandq
onlineqauctionqservices.
7. Merchandisingqcompaniesqresellqproductsqtheyqbuyqfromqsuppliers.qMerchandisersqkeepqanqinventoryqofqp
roducts,qandqmanagersqareqaccountableqforqtheqpurchasing,qstorage,qandqsaleqofqtheqproducts.qExamplesqo
fqmerchandisingqcompaniesqincludeqtoyqstores,qgroceryqstores,qandqclothingqstores.
8. Merchandisingqcompaniesqresellqproductsqtheyqpreviouslyqboughtqfromqsuppliers,qwhereasqmanufacturin
gqcompaniesquseqlabor,qequipment,qsupplies,qandqfacilitiesqtoqconvertqrawqmaterialsqintoqnewqfinishedqpro
ducts.qInqcontrastqtoqmerchandisingqcompanies,qmanufacturingqcompaniesqhaveqaqbroadqrangeqofqprodu
ctionqactivitiesqthatqrequireqtrackingqcostsqonqthreeqkindsqofqinventory.
9. TheqthreeqinventoryqaccountsqusedqbyqmanufacturingqcompaniesqareqRawqMaterialsqInventory,qWork-qin-
ProcessqInventory,qandqFinishedqGoodsqInventory.
RawqMaterialsqInventoryqincludesqmaterialsqusedqtoqmanufactureqaqproduct.qWork-in-
ProcessqInventoryqincludesqgoodsqthatqhaveqbeenqstartedqinqtheqmanufacturingqprocessqbutqareqnotqyetqco
mplete.q FinishedqGoodsqInventoryqincludesqcompletedqgoodsqthatqhaveqnotqyetqbeenqsold.
10. Aqdirectqcostqisqaqcostqthatqcanqbeqeasilyqandqcost-
effectivelyqtracedqtoqaqcostqobjectq(whichqisqanythingqforqwhichqmanagersqwantqaqseparateqmeasuremen
tqofqcost).qAnqindirectqcostqisqaqcostqthatqcannotqbeqeasilyqorqcost-effectivelyqtracedqtoqaqcostqobject.
11. Theqthreeqmanufacturingqcostsqforqaqmanufacturingqcompanyqareqdirectqmaterials,qdirectqlabor,qandqman
ufacturingqoverhead.qDirectqmaterialsqareqmaterialsqthatqbecomeqaqphysicalqpartqofqaqfinishedqproductqan
dqwhoseqcostsqareqeasilyqtraceableqtoqtheqfinishedqproduct.q Directqlaborqisqtheqlaborqcostqofqtheqemployee
sqwhoqconvertqmaterialsqintoqfinishedqproducts.qManufacturingqoverheadqincludesqallqmanufacturingqcost
sqexceptqdirectqmaterialsqandqdirectqlabor,qsuchqasqindirectqmaterials,qindirectqlabor,qfactoryqdepreciation,q
factoryqrent,qandqfactoryqpropertyqtaxes.
