Solutions Manual
Managerial Accounting: Creating Value in a Dynamic
Business Environment, 13th Edition by Hilton
Chapters 1 - 17 Complete
,TABLE OF CONTENTS
Chapter 1: The Changing Role of Managerial Accounting in a Dynamic Business
EnvironmentChapter 2: Basic Cost Management Concepts
Chapter 3: Product Costing and Cost Accumulation in a Batch Production
EnvironmentChapter 4: Process Costing and Hybrid Product-Costing Systems
Chapter 5: Activity-Based Costing and Management
Chapter 6: Activity Analysis, Cost Behavior, and Cost
EstimationChapter 7: Cost-Volume-Profit Analysis
Chapter 8: Variable Costing and the Measurement of ESG and Quality
CostsChapter 9: Financial Planning and Analysis: The Master Budget
Chapter 10: Standard Costing and Analysis of Direct Costs
Chapter 11: Flexible Budgeting and the Management of Overhead and Support
Activity CostsChapter 12: Responsibility Accounting and the Balanced Scorecard
Chapter 13: Investment Centers and Transfer Pricing
Chapter 14: Decision Making: Relevant Costs and
Benefits
Chapter 15: Target Costing and Cost Analysis for Pricing
DecisionsChapter 16: Capital Expenditure Decisions
Chapter 17: Allocation of Support Activity Costs and Joint Costs
Appendix I: The Sarbanes-Oxley Act, Internal Controls, and Management Accounting
Appendix II: Compound Interest and the Concept of Present Value
Appendix III: Inventory Management
,CHAPTER 1
The Crucial Role of Managerial Accounting in
a Dynamic Business Environment
FOCUS ON ETHICS (Located before the Chapter Summary in the text.)
The focus-on-ethics inset for Chapter 1 is the IMA Statement of Ethical Professional Practice.
Instructors can use this list of ethical principles and standards to lead a class
discussion. The discussion can also range to consideration of how these standards
may have been violated by accountants and managers involved in the various ethical
scandals uncovered over the past several years. It is also useful to discuss the pros and
cons of the procedures that IMA suggests for its members when they believe they know
about ethical lapses in their organizations.
ANSWERS TO REVIEW QUESTIONS
1-1 The explosion in e-commerce will affect managers in significant ways. One effect
will be a drastic reduction in paper work. Millions of transactions between
businesses are now being conducted electronically with no hard-copy
documentation. Along with this method of communicating for business
transactions comes the very significant issue of information security. Businesses
need to find ways to protect confidential information in their own computers,
in cloud computing data centers, and while moving across the internet, while
at the same time sharing the information necessary to complete transactions.
Another effect of e-commerce is the dramatically increased speed with which
business transactions can be conducted. In addition, there will be dramatic
changes in the way managerial accounting procedures are carried out, one
example being cloud-based budgeting, which is the enterprise-wide and
electronic completion of a company’s budgeting process using cloud-based
software and data storage.
, 1-2 Plausible goals for the organizations listed are as follows:
(a) Amazon.com: (1) To achieve and maintain profitability, and (2) to grow
on-line sales of their many products. Amazon is also famous (infamous) for
wanting to have every product in the world on its site.
(b) American Red Cross: (1) To raise funds from the general public sufficient to
have resources available to meet any disaster that may occur, and (2) to
provide assistance to people who are victims of a disaster anywhere in the world
on short notice.
(c) General Motors: (1) To earn income sufficient to provide a good return
on the investment of the company's stockholders, and (2) to provide the
highest-quality product possible.
(d) Wal-Mart: (1) To penetrate the retail market in virtually every location in the
United States, and (2) to grow over time in terms of number of retail locations,
total assets, and earnings. Also, to be competitive with Amazon in the e-retail
space.
(e) City of Seattle: (1) To maintain an urban environment as free of pollution
as possible, and (2) to provide public safety, police, and fire protection to the
city's citizens.
(f) Hertz: (1) To be a recognizable household name associated with rental
car services, and (2) to provide reliable and economical transportation services to
the company's customers.
1-3 The four basic management activities are listed and defined as follows:
(a) Decision making: Choosing among the available alternatives.
(b) Planning: Developing a detailed financial and operational
description ofanticipated operations.
(c) Directing operations: Running the organization on a day-to-day basis.
(d) Controlling: Ensuring that the organization operates in the intended
manner andachieves its goals.
Managerial Accounting: Creating Value in a Dynamic
Business Environment, 13th Edition by Hilton
Chapters 1 - 17 Complete
,TABLE OF CONTENTS
Chapter 1: The Changing Role of Managerial Accounting in a Dynamic Business
EnvironmentChapter 2: Basic Cost Management Concepts
Chapter 3: Product Costing and Cost Accumulation in a Batch Production
EnvironmentChapter 4: Process Costing and Hybrid Product-Costing Systems
Chapter 5: Activity-Based Costing and Management
Chapter 6: Activity Analysis, Cost Behavior, and Cost
EstimationChapter 7: Cost-Volume-Profit Analysis
Chapter 8: Variable Costing and the Measurement of ESG and Quality
CostsChapter 9: Financial Planning and Analysis: The Master Budget
Chapter 10: Standard Costing and Analysis of Direct Costs
Chapter 11: Flexible Budgeting and the Management of Overhead and Support
Activity CostsChapter 12: Responsibility Accounting and the Balanced Scorecard
Chapter 13: Investment Centers and Transfer Pricing
Chapter 14: Decision Making: Relevant Costs and
Benefits
Chapter 15: Target Costing and Cost Analysis for Pricing
DecisionsChapter 16: Capital Expenditure Decisions
Chapter 17: Allocation of Support Activity Costs and Joint Costs
Appendix I: The Sarbanes-Oxley Act, Internal Controls, and Management Accounting
Appendix II: Compound Interest and the Concept of Present Value
Appendix III: Inventory Management
,CHAPTER 1
The Crucial Role of Managerial Accounting in
a Dynamic Business Environment
FOCUS ON ETHICS (Located before the Chapter Summary in the text.)
The focus-on-ethics inset for Chapter 1 is the IMA Statement of Ethical Professional Practice.
Instructors can use this list of ethical principles and standards to lead a class
discussion. The discussion can also range to consideration of how these standards
may have been violated by accountants and managers involved in the various ethical
scandals uncovered over the past several years. It is also useful to discuss the pros and
cons of the procedures that IMA suggests for its members when they believe they know
about ethical lapses in their organizations.
ANSWERS TO REVIEW QUESTIONS
1-1 The explosion in e-commerce will affect managers in significant ways. One effect
will be a drastic reduction in paper work. Millions of transactions between
businesses are now being conducted electronically with no hard-copy
documentation. Along with this method of communicating for business
transactions comes the very significant issue of information security. Businesses
need to find ways to protect confidential information in their own computers,
in cloud computing data centers, and while moving across the internet, while
at the same time sharing the information necessary to complete transactions.
Another effect of e-commerce is the dramatically increased speed with which
business transactions can be conducted. In addition, there will be dramatic
changes in the way managerial accounting procedures are carried out, one
example being cloud-based budgeting, which is the enterprise-wide and
electronic completion of a company’s budgeting process using cloud-based
software and data storage.
, 1-2 Plausible goals for the organizations listed are as follows:
(a) Amazon.com: (1) To achieve and maintain profitability, and (2) to grow
on-line sales of their many products. Amazon is also famous (infamous) for
wanting to have every product in the world on its site.
(b) American Red Cross: (1) To raise funds from the general public sufficient to
have resources available to meet any disaster that may occur, and (2) to
provide assistance to people who are victims of a disaster anywhere in the world
on short notice.
(c) General Motors: (1) To earn income sufficient to provide a good return
on the investment of the company's stockholders, and (2) to provide the
highest-quality product possible.
(d) Wal-Mart: (1) To penetrate the retail market in virtually every location in the
United States, and (2) to grow over time in terms of number of retail locations,
total assets, and earnings. Also, to be competitive with Amazon in the e-retail
space.
(e) City of Seattle: (1) To maintain an urban environment as free of pollution
as possible, and (2) to provide public safety, police, and fire protection to the
city's citizens.
(f) Hertz: (1) To be a recognizable household name associated with rental
car services, and (2) to provide reliable and economical transportation services to
the company's customers.
1-3 The four basic management activities are listed and defined as follows:
(a) Decision making: Choosing among the available alternatives.
(b) Planning: Developing a detailed financial and operational
description ofanticipated operations.
(c) Directing operations: Running the organization on a day-to-day basis.
(d) Controlling: Ensuring that the organization operates in the intended
manner andachieves its goals.
