SOLUTION MANUAL
Horngren's Accounting, 13th Edition Managerial
by Tracie Miller-Nobles, Brenda Mattison, All Chapter 1-9
,THE MANAGERIAL CHAPTERS
y y
1. Introduction to Managerial Accounting
y y y
2. Job Order Costing
y y
3. Process Costingy
4. Cost-Volume-Profit Analysis y
5. Master Budgets
y
6. Flexible Budgets and Standard Cost Systems
y y y y y
7. Cost Allocation and Responsibility Accounting
y y y y
8. Short-Term Business Decisions
y y
9. Capital Investment Decisions
y y
,Chapter 1 y
Introduction to Managerial Accounting
y y y
Review Questions
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1. Theyprimaryypurposeyofymanagerialyaccountingyisytoyprovideyinformationytoyhelpymanagersypla
n,ydirect,ycontrol,yandymakeydecisions.
2. Financialyaccountingyandymanagerialyaccountingydifferyonytheyfollowingy6ydimensions:y(1)yprimaryy
users,y(2)ypurposeyofyinformation,y(3)yfocusyandytimeydimensionyofytheyinformation,y(4)yrulesyandyr
estrictions,y(5)yscopeyofyinformation,yandy(6)ybehavioral.
3. Lineypositionsyareydirectlyyinvolvedyinyprovidingygoodsyoryservicesytoycustomers.yStaffypositionsy
supportylineypositions.
4. Planningymeansychoosingygoalsyandydecidingyhowytoyachieveythem.yDirectingyinvolvesyrunningytheyd
ay-to-
dayyoperationsyofyaybusiness.yControllingyisytheyprocessyofymonitoringyoperationsyandykeepingytheyc
ompanyyonytrack.
5. TheyfouryIMAystandardsyofyethicalypracticeyandyaydescriptionyofyeachyfollow.
I. Competence.
Maintainyanyappropriateylevelyofyprofessionalyleadershipyandyexpertiseybyyenhanci
ngyknowledgeyandyskills.
Performyprofessionalydutiesyinyaccordanceywithyrelevantylaws,yregulations,yandytechnic
alystandards.
Provideydecisionysupportyinformationyandyrecommendationsythatyareyaccurate,yclear,yconci
se,yandytimely.
Recogniseyandyhelpymangeyrisk.
II. Confidentiality.
Keepyinformationyconfidentialyexceptywhenydisclosureyisyauthorizedyorylegallyyrequired.
Informyallyrelevantypartiesyregardingyappropriateyuseyofyconfidentialyinformation.y Monitory
toyensureycompliance.
Refrainyfromyusingyconfidentialyinformationyforyunethicalyoryillegalyadvantage.
III. Integrity.
Mitigateyactualyconflictsyofyinterest.yRegularlyycommunicateywithybusinessyassociatesytoyavoi
dyapparentyconflictsyofyinterest.yyAdviseyallypartiesyofyanyypotentialyconflicts.
Refrainyfromyengagingyinyanyyconductythatywouldyprejudiceycarryingyoutydutiesyethically.
, Abstainyfromyengagingyinyorysupportingyanyyactivityythatymightydiscreditytheyprofession.
Contributeytoyaypositiveyethicalycultureyandyplaceyintegrityyofytheyprofessionyaboveyperson
alyinterest.
5,ycont.
IV. Credibility.
Communicateyinformationyfairlyyandyobjectively.
Provideyallyrelevantyinformationythatycouldyreasonablyybeyexpectedytoyinfluenceyanyintend
edyuser’syunderstandingyofytheyreports,yanalyses,yoryrecommendations.
Reportyanyydelaysyorydeficienciesyinyinformation,ytimeliness,yprocessing,yoryinternalycontrol
syinyconformanceywithyorganizationypolicyyand/oryapplicableylaw.
Communicateyanyyprofessionalylimitationsyoryotheryconstraintsythatywouldyprecludeyrespon
si-ybleyjudgmentyorysuccessfulyperformanceyofyanyactivity.
6. Serviceycompaniesysellytime,yskills,yandyknowledge.y Examplesyofyserviceycompaniesyincludeyphoney
serviceycompanies,ybanks,ycleaningyserviceycompanies,yaccountingyfirms,ylawyfirms,ymedicalyphysi
cians,yandyonlineyauctionyservices.
7. Merchandisingycompaniesyresellyproductsytheyybuyyfromysuppliers.yMerchandisersykeepyanyinventor
yyofyproducts,yandymanagersyareyaccountableyforytheypurchasing,ystorage,yandysaleyofytheyproducts.y
Examplesyofymerchandisingycompaniesyincludeytoyystores,ygroceryystores,yandyclothingystores.
8. Merchandisingycompaniesyresellyproductsytheyypreviouslyyboughtyfromysuppliers,ywhereasymanufa
cturingycompaniesyuseylabor,yequipment,ysupplies,yandyfacilitiesytoyconvertyrawymaterialsyintoynewyf
inishedyproducts.yInycontrastytoymerchandisingycompanies,ymanufacturingycompaniesyhaveyaybroad
yrangeyofyproductionyactivitiesythatyrequireytrackingycostsyonythreeykindsyofyinventory.
9. TheythreeyinventoryyaccountsyusedybyymanufacturingycompaniesyareyRawyMaterialsyInventory,yWor
k-yin-ProcessyInventory,yandyFinishedyGoodsyInventory.
RawyMaterialsyInventoryyincludesymaterialsyusedytoymanufactureyayproduct.yWork-in-
ProcessyInventoryyincludesygoodsythatyhaveybeenystartedyinytheymanufacturingyprocessybutyareynoty
yetycomplete.y FinishedyGoodsyInventoryyincludesycompletedygoodsythatyhaveynotyyetybeenysold.
10. Aydirectycostyisyaycostythatycanybeyeasilyyandycost-
effectivelyytracedytoyaycostyobjecty(whichyisyanythingyforywhichymanagersywantyayseparateymeasu
rementyofycost).yAnyindirectycostyisyaycostythatycannotybeyeasilyyorycost-
effectivelyytracedytoyaycostyobject.
11. Theythreeymanufacturingycostsyforyaymanufacturingycompanyyareydirectymaterials,ydirectylabor,yand
ymanufacturingyoverhead.yDirectymaterialsyareymaterialsythatybecomeyayphysicalypartyofyayfinishedy
productyandywhoseycostsyareyeasilyytraceableytoytheyfinishedyproduct.y Directylaboryisytheylaborycosty
