Managerial Accounting for Undergraduates, 4e
Christensen, Hobson, Wallace, Matthews
SOLUTIONS MANUAL
Includes All Chapters (1 to 14 )
Complete Chapter-by-Chapter Solutions
Exercises Answers Included
Problems Solutions Included
Latest Edition Solutions Manual
, Chapter 1
Overview of Managerial Accounting
QUESTIONS
1. As opposed to financial accounting, which focuses on reporting a company’s financial
performance to external parties, managerial accounting plays a vital role in internal decision
making. Managerial accounting also helps top management make decisions regarding future
performance, whereas financial accounting measures and reports the financial results of a
business’ past actions.
2. Financial accounting produces reports relevant to stockholders and other external
stakeholders in the company, such as creditors and regulators.
3. Because the product is new and the budget relates to future performance, the owner should
ask the management accountant for assistance.
4. The three types of business entities are manufacturing firms, merchandising firms, and
service firms. Manufacturing firms convert materials into finished products through the use of
human labor, utilities, and factory assets. Merchandising firms purchase finished products
from manufacturers for warehousing, display, and sale to consumers. Service firms perform
services, such as healthcare, legal, and accounting services, to customers.
5. Merchandising firms purchase the finished products, in large quantities, that manufacturing
firms produce, and sell and ship them in smaller quantities to consumers.
6. While this question can lead to any number of answers, examples include Boeing
(manufacturing), Costco (merchandising), or Wells Fargo (service).
7. The three main areas of concern in sustainability reporting are the impact of the business on
the broader economy (profit), society (people), and the environment (planet).
8. Correct responses could include: automation of routine tasks, including data entry, account
reconciliation, and report generation; monitoring of financial and operational data in real time;
quickly analyzing large data sets to find unusual transactions; identifying high cost activities
that could be re-engineered to increase efficiency and reduce costs; and, more accurately
forecast future revenues and expenses for budgeting purposes.
9. Amazon uses data on a customer’s previous purchases, wish list, and previous reviews and
ratings to predict what and when that customer will order next.
© 2027
Solutions Manual, Chapter 1 1-1
,10. Ari is a manufacturing firm that uses primarily a consumer-direct approach, selling mainly
through web-based orders.
11. The advantages of Ari’s business model include tailoring the bikes they sell to each customer,
with body measurements, age, type of riding, and experienced injuries all taken into account.
In addition, Ari can keep a minimal quantity of parts in inventory.
12. Environmental Business Consultants, LLC primarily obtains its client work through requests
from clients for whom the firm has worked for many years and also by responding to
competitive requests for proposals issued
13. Examples include management accountant, controller, chief financial officer, treasurer,
budget analyst, internal auditor, environmental accountant, and tax consultant.
14. It is relevant because upwards of 90% of those who begin their careers in public accounting
will leave public accounting and join a company in business or industry within a few years
after graduation.
15. Most accountants work in industry, due to the number of positions and opportunities available
to accountants. Virtually every business needs accountants and their unique skills.
16. The graduate must take a four-part exam administered by the AICPA, which exam covers
Auditing and Attestation, Business Environment and Concepts, Financial Accounting and
Reporting, and Regulation. The graduate must then obtain licensure by a state, which usually
requires 150 hours of college credit plus real-world work experience.
17. No, an individual can obtain multiple professional certifications. For example, an accounting
graduate can become both a Certified Public Accountant and a Certified Management
Accountant.
18. Career paths include budget analyst, corporate accounting manager, university professor,
and finance director.
© 2027
1-2 Managerial Accounting for Undergraduates, 4th Edition
, SHORT EXERCISES
SE1-1.
(LO1)
c. helps management make decisions regarding future performance
SE1-2.
(LO1)
a. issuing a quarterly earnings report to investors
SE1-3.
(LO1)
c. Internal management
SE1-4.
(LO2)
d. all of the above
SE1-5.
(LO2)
a. manufacturer
SE1-6.
(LO2)
b. work-in-process
SE1-7.
(LO3)
d. predictive analytics
SE1-8.
(LO3)
d. more than one of the above
Both b (sustainability) and c (factory automation) are correct
© 2027
Solutions Manual, Chapter 1 1-3
Christensen, Hobson, Wallace, Matthews
SOLUTIONS MANUAL
Includes All Chapters (1 to 14 )
Complete Chapter-by-Chapter Solutions
Exercises Answers Included
Problems Solutions Included
Latest Edition Solutions Manual
, Chapter 1
Overview of Managerial Accounting
QUESTIONS
1. As opposed to financial accounting, which focuses on reporting a company’s financial
performance to external parties, managerial accounting plays a vital role in internal decision
making. Managerial accounting also helps top management make decisions regarding future
performance, whereas financial accounting measures and reports the financial results of a
business’ past actions.
2. Financial accounting produces reports relevant to stockholders and other external
stakeholders in the company, such as creditors and regulators.
3. Because the product is new and the budget relates to future performance, the owner should
ask the management accountant for assistance.
4. The three types of business entities are manufacturing firms, merchandising firms, and
service firms. Manufacturing firms convert materials into finished products through the use of
human labor, utilities, and factory assets. Merchandising firms purchase finished products
from manufacturers for warehousing, display, and sale to consumers. Service firms perform
services, such as healthcare, legal, and accounting services, to customers.
5. Merchandising firms purchase the finished products, in large quantities, that manufacturing
firms produce, and sell and ship them in smaller quantities to consumers.
6. While this question can lead to any number of answers, examples include Boeing
(manufacturing), Costco (merchandising), or Wells Fargo (service).
7. The three main areas of concern in sustainability reporting are the impact of the business on
the broader economy (profit), society (people), and the environment (planet).
8. Correct responses could include: automation of routine tasks, including data entry, account
reconciliation, and report generation; monitoring of financial and operational data in real time;
quickly analyzing large data sets to find unusual transactions; identifying high cost activities
that could be re-engineered to increase efficiency and reduce costs; and, more accurately
forecast future revenues and expenses for budgeting purposes.
9. Amazon uses data on a customer’s previous purchases, wish list, and previous reviews and
ratings to predict what and when that customer will order next.
© 2027
Solutions Manual, Chapter 1 1-1
,10. Ari is a manufacturing firm that uses primarily a consumer-direct approach, selling mainly
through web-based orders.
11. The advantages of Ari’s business model include tailoring the bikes they sell to each customer,
with body measurements, age, type of riding, and experienced injuries all taken into account.
In addition, Ari can keep a minimal quantity of parts in inventory.
12. Environmental Business Consultants, LLC primarily obtains its client work through requests
from clients for whom the firm has worked for many years and also by responding to
competitive requests for proposals issued
13. Examples include management accountant, controller, chief financial officer, treasurer,
budget analyst, internal auditor, environmental accountant, and tax consultant.
14. It is relevant because upwards of 90% of those who begin their careers in public accounting
will leave public accounting and join a company in business or industry within a few years
after graduation.
15. Most accountants work in industry, due to the number of positions and opportunities available
to accountants. Virtually every business needs accountants and their unique skills.
16. The graduate must take a four-part exam administered by the AICPA, which exam covers
Auditing and Attestation, Business Environment and Concepts, Financial Accounting and
Reporting, and Regulation. The graduate must then obtain licensure by a state, which usually
requires 150 hours of college credit plus real-world work experience.
17. No, an individual can obtain multiple professional certifications. For example, an accounting
graduate can become both a Certified Public Accountant and a Certified Management
Accountant.
18. Career paths include budget analyst, corporate accounting manager, university professor,
and finance director.
© 2027
1-2 Managerial Accounting for Undergraduates, 4th Edition
, SHORT EXERCISES
SE1-1.
(LO1)
c. helps management make decisions regarding future performance
SE1-2.
(LO1)
a. issuing a quarterly earnings report to investors
SE1-3.
(LO1)
c. Internal management
SE1-4.
(LO2)
d. all of the above
SE1-5.
(LO2)
a. manufacturer
SE1-6.
(LO2)
b. work-in-process
SE1-7.
(LO3)
d. predictive analytics
SE1-8.
(LO3)
d. more than one of the above
Both b (sustainability) and c (factory automation) are correct
© 2027
Solutions Manual, Chapter 1 1-3
