,ACCESS Test Bank for Fundamental Managerial Accounting Concepts 10th Editi
n n n n n n n n n
on Edmonds n
Chaptern 01 n -n Management n Accountingn and n Corporaten Governance
Teaching Notes for Chapter 1
n n n n
Managerialn accountingn requiresn teachingn methodsndifferentn fromnthosen used n inn financialn a
ccounting.n Inn then introductoryn financialn accountingn course,n instructorsn teachn studentsn abou
t n accountingn standards.n An primaryn goaln inn teachingn managerialn accountingn isn tondevelopn st
udents’n conditionalnassessmentnskillsn(critical-
thinkingn skills).n Forn example,n inn an latern chapter,n studentsn aren frequentlyn confused n bynthenfa
ct nthat,n inndifferentn situations,n an givenncostncannbenclassified nasnfixednornvariable,ndirect nornin
direct,nrelevant nornnotnrelevant.n Then salaryn cost n ofn storen managersn mayn ben fixed nwithn respec
t ntonthen numbern ofn customersn thatn entern theirn stores.nHowever,n managers’n salaryn cost n isn vari
ablen relativen ton then numbern ofn storesn an companyn operates.nAn manager’sn salaryn cost n isndirect
lyn traceablen ton an particularn storen butn notntraceablen ton an salen occurringn inn then store.n Studentsn
must n learnn ton assessnthenconditionsnthat ndeterminen costn classification.n Chaptern 1n offersn then
first n opportunityn tondevelopnthenstudents’nconditionalnassessmentnskills.nHere,nstudentsnlear
nnthat ndepreciationn cann ben classified n asn ann asset n orn ann expense,ndependingn onn certainn condit
ions.n Ifn andepreciablenasset nisnused ntonproduceninventory,nthendepreciationncost nwillnfirst nbencl
assified n asnannassetn(inventory)nand nlaternasnannexpensen(cost nof ngoodsnsold).nIfnthendepreciabl
enasset n isn usednton supportn sellingn andn administrativen activities,ndepreciationn willn ben reporte
d n directlyn onn then incomen statement n asn depreciationn expense.
Studentsn typicallyn entern managerialn accountingn withn rigid n ideasn about n expensen recogni
tion.n Innfinancialn accountingn theyn learnedn thatndepreciationn andn employeen compensationn c
ostsn aren expensedndirectlyn onnthen incomen statement.n Then ideanthatndepreciationn relatedn ton
manufacturingn equipment n andn wagesn ofn productionnworkersn willn passnthroughnanninventor
ynaccount nbeforenbeingnexpensed nasncostnofngoodsnsold nisncontraryn ton theirn existingn knowled
gen base.n Expandingnthatn knowledgen basen requiresn an significant n commitment n of nteachingn ti
me.n Yourn studentsn arendevelopingn theirn analyticaln skills.n Theyn aren learningn how n ton assessn t
hen conditionsn that n influencen cost n classification.n Thisn typen of n learningn requiresn moren timen t
hann merelyn memorizingn definitions.n If n youn sometimesn feeln that n progressn isn toon slow,n reme
mbern that n youn aren buildingn anfoundationn uponn whichn subsequent n learningn willn rest.n Theren i
sn non moren important nteachingn taskn thann helpingn studentsn formn an soundn conceptualnframewo
rk.n Wen recommend n usingn approximatelyn threen hoursn of n classn timen forn Chaptern 1.
1-1
©n McGrawnHillnLLC.nAllnrights nreserved.n No n rm
ynursytest.store hen prior nwrittennconsentnof nMcGrawn HillnLLC
.
e
,ACCESS Test Bank for Fundamental Managerial Accounting Concepts 10th Editi
n n n n n n n n n
on Edmonds n
Chaptern 01 n -n Management n Accountingn and n Corporaten Governance
Detailed Outline of a Lesson Plan for Chapter 1
n n n n n n n n
Ancomprehensive nlessonnplannfornthenfirst ndaynofnclassnbeginsninnthenIntroductionnto nthisnmanual.nPleasen
read nitnbeforenimplementing nstepsnII–VIIInofnthenfollowing nlessonnplan.
I. Distinguishnbetweennmanagerialnandnfinancialnaccounting.nThen best n wayn tondif
ferentiaten betweenn managerialn andn financialn accountingn isn ton highlight ndifferencesn
wheren theyn occurn innthen subject n matternthroughoutn then course.n Forn example,n whenn u
singn estimated ndatan inn andecision-
makingn context,n pointn outnthatn managerialn accountingn isn future-
oriented n rathern thann historicallyn based.n An longn monologuen aboutn thendifferencesn be
tweennfinancialn andn managerialn accountingn willnonlynborenyournstudents.nInnanbriefni
ntroductionntonthisntopic,nyounmightndiscussn then informationn needsn forn internaln users
n (managers)n ton plan,ndirect,n and n control.n Then informationn neededn byn an managerndep
endsn onn his/hern positionn inn then organizationn andn then particularn decisionn facingnthen
manager.n Ifn younwantnton spendn moren timen onnthentopic,n Exercisen1-
1A nfromnthen end-of-chaptern materialsn inn thentextn might n ben ann appropriaten in-
classn activityn at n thisn point.
II. UsenDemonstrationnProblemn1-1nasnanproblem-
basednlearningnexercise.n(Seenthen introductionntonthisn manualn forndetailsn about n pro
blem-based n learning.)
III. Afterngivingnthenstudentsnanfew nminutesntondigestnthenproblemnandnformulaten
solutions,nengagenthemninnsomenformnof ncollaborativenlearningnexperience.
IV. Introducen then conceptn of n productn costingn byn providingn then solutionn to
requirementnanof nDemonstrationnProblemn1-1.
V. ContinuingnDemonstrationnProblemn1-
1,ndeterminenthencostnpernunitnandnthensalesnpricenusingnancost-
plusnpricingnstrategy.
VI. Show nhow nproductncostsnarenexpensednthroughncostnof ngoodsnsold.
VII. Introducenthencostncategorynof nselling,ngeneral,nandnadministrativencostsn(SG
&Ancosts).
VIII. UsenProblemn1-19Anasnannin-classnreinforcementnexercise.
IX. CopynandndistributenDemonstrationnProblemn1-2.nDemonstrationn Problemn 1-
2n expandsn then classificationn conceptsn introducedn innDemonstrationn Problemn 1-
1n ton includen accountingn forn thendepreciationn ofn manufacturingn equipment.n Explainnt
hat ndepreciationnonnmanufacturingnfacilitiesnand nequipment nisnanproductncost.nPointn
out nthatn then entryn ton recordndepreciationn onn manufacturingn equipment n representsn a
nn asset n exchangentransaction.n Then bookn valuen ofn manufacturingn equipment ndecreas
es,n andn then balancen innthenInventoryn account n increases.n Studentsn aren son accustomed
nton thenideanthatndepreciationn isn ann expense,n theyn aren notn likelynton graspn thenproduct nc
1-2
©n McGrawnHillnLLC.nAllnrights nreserved.n No n rm
ynursytest.store hen prior nwrittennconsentnof nMcGrawn HillnLLC
.
e
, ACCESS Test Bank for Fundamental Managerial Accounting Concepts 10th Editi
n n n n n n n n n
on Edmonds n
Chaptern 01 n -n Management n Accountingn and n Corporaten Governance
ost nconcept nuntilntheynworknanproblem.nAfternyournexplanation,nassign
1-3
©n McGrawnHillnLLC.nAllnrights nreserved.n No n rm
ynursytest.store hen prior nwrittennconsentnof nMcGrawn HillnLLC
.
e
n n n n n n n n n
on Edmonds n
Chaptern 01 n -n Management n Accountingn and n Corporaten Governance
Teaching Notes for Chapter 1
n n n n
Managerialn accountingn requiresn teachingn methodsndifferentn fromnthosen used n inn financialn a
ccounting.n Inn then introductoryn financialn accountingn course,n instructorsn teachn studentsn abou
t n accountingn standards.n An primaryn goaln inn teachingn managerialn accountingn isn tondevelopn st
udents’n conditionalnassessmentnskillsn(critical-
thinkingn skills).n Forn example,n inn an latern chapter,n studentsn aren frequentlyn confused n bynthenfa
ct nthat,n inndifferentn situations,n an givenncostncannbenclassified nasnfixednornvariable,ndirect nornin
direct,nrelevant nornnotnrelevant.n Then salaryn cost n ofn storen managersn mayn ben fixed nwithn respec
t ntonthen numbern ofn customersn thatn entern theirn stores.nHowever,n managers’n salaryn cost n isn vari
ablen relativen ton then numbern ofn storesn an companyn operates.nAn manager’sn salaryn cost n isndirect
lyn traceablen ton an particularn storen butn notntraceablen ton an salen occurringn inn then store.n Studentsn
must n learnn ton assessnthenconditionsnthat ndeterminen costn classification.n Chaptern 1n offersn then
first n opportunityn tondevelopnthenstudents’nconditionalnassessmentnskills.nHere,nstudentsnlear
nnthat ndepreciationn cann ben classified n asn ann asset n orn ann expense,ndependingn onn certainn condit
ions.n Ifn andepreciablenasset nisnused ntonproduceninventory,nthendepreciationncost nwillnfirst nbencl
assified n asnannassetn(inventory)nand nlaternasnannexpensen(cost nof ngoodsnsold).nIfnthendepreciabl
enasset n isn usednton supportn sellingn andn administrativen activities,ndepreciationn willn ben reporte
d n directlyn onn then incomen statement n asn depreciationn expense.
Studentsn typicallyn entern managerialn accountingn withn rigid n ideasn about n expensen recogni
tion.n Innfinancialn accountingn theyn learnedn thatndepreciationn andn employeen compensationn c
ostsn aren expensedndirectlyn onnthen incomen statement.n Then ideanthatndepreciationn relatedn ton
manufacturingn equipment n andn wagesn ofn productionnworkersn willn passnthroughnanninventor
ynaccount nbeforenbeingnexpensed nasncostnofngoodsnsold nisncontraryn ton theirn existingn knowled
gen base.n Expandingnthatn knowledgen basen requiresn an significant n commitment n of nteachingn ti
me.n Yourn studentsn arendevelopingn theirn analyticaln skills.n Theyn aren learningn how n ton assessn t
hen conditionsn that n influencen cost n classification.n Thisn typen of n learningn requiresn moren timen t
hann merelyn memorizingn definitions.n If n youn sometimesn feeln that n progressn isn toon slow,n reme
mbern that n youn aren buildingn anfoundationn uponn whichn subsequent n learningn willn rest.n Theren i
sn non moren important nteachingn taskn thann helpingn studentsn formn an soundn conceptualnframewo
rk.n Wen recommend n usingn approximatelyn threen hoursn of n classn timen forn Chaptern 1.
1-1
©n McGrawnHillnLLC.nAllnrights nreserved.n No n rm
ynursytest.store hen prior nwrittennconsentnof nMcGrawn HillnLLC
.
e
,ACCESS Test Bank for Fundamental Managerial Accounting Concepts 10th Editi
n n n n n n n n n
on Edmonds n
Chaptern 01 n -n Management n Accountingn and n Corporaten Governance
Detailed Outline of a Lesson Plan for Chapter 1
n n n n n n n n
Ancomprehensive nlessonnplannfornthenfirst ndaynofnclassnbeginsninnthenIntroductionnto nthisnmanual.nPleasen
read nitnbeforenimplementing nstepsnII–VIIInofnthenfollowing nlessonnplan.
I. Distinguishnbetweennmanagerialnandnfinancialnaccounting.nThen best n wayn tondif
ferentiaten betweenn managerialn andn financialn accountingn isn ton highlight ndifferencesn
wheren theyn occurn innthen subject n matternthroughoutn then course.n Forn example,n whenn u
singn estimated ndatan inn andecision-
makingn context,n pointn outnthatn managerialn accountingn isn future-
oriented n rathern thann historicallyn based.n An longn monologuen aboutn thendifferencesn be
tweennfinancialn andn managerialn accountingn willnonlynborenyournstudents.nInnanbriefni
ntroductionntonthisntopic,nyounmightndiscussn then informationn needsn forn internaln users
n (managers)n ton plan,ndirect,n and n control.n Then informationn neededn byn an managerndep
endsn onn his/hern positionn inn then organizationn andn then particularn decisionn facingnthen
manager.n Ifn younwantnton spendn moren timen onnthentopic,n Exercisen1-
1A nfromnthen end-of-chaptern materialsn inn thentextn might n ben ann appropriaten in-
classn activityn at n thisn point.
II. UsenDemonstrationnProblemn1-1nasnanproblem-
basednlearningnexercise.n(Seenthen introductionntonthisn manualn forndetailsn about n pro
blem-based n learning.)
III. Afterngivingnthenstudentsnanfew nminutesntondigestnthenproblemnandnformulaten
solutions,nengagenthemninnsomenformnof ncollaborativenlearningnexperience.
IV. Introducen then conceptn of n productn costingn byn providingn then solutionn to
requirementnanof nDemonstrationnProblemn1-1.
V. ContinuingnDemonstrationnProblemn1-
1,ndeterminenthencostnpernunitnandnthensalesnpricenusingnancost-
plusnpricingnstrategy.
VI. Show nhow nproductncostsnarenexpensednthroughncostnof ngoodsnsold.
VII. Introducenthencostncategorynof nselling,ngeneral,nandnadministrativencostsn(SG
&Ancosts).
VIII. UsenProblemn1-19Anasnannin-classnreinforcementnexercise.
IX. CopynandndistributenDemonstrationnProblemn1-2.nDemonstrationn Problemn 1-
2n expandsn then classificationn conceptsn introducedn innDemonstrationn Problemn 1-
1n ton includen accountingn forn thendepreciationn ofn manufacturingn equipment.n Explainnt
hat ndepreciationnonnmanufacturingnfacilitiesnand nequipment nisnanproductncost.nPointn
out nthatn then entryn ton recordndepreciationn onn manufacturingn equipment n representsn a
nn asset n exchangentransaction.n Then bookn valuen ofn manufacturingn equipment ndecreas
es,n andn then balancen innthenInventoryn account n increases.n Studentsn aren son accustomed
nton thenideanthatndepreciationn isn ann expense,n theyn aren notn likelynton graspn thenproduct nc
1-2
©n McGrawnHillnLLC.nAllnrights nreserved.n No n rm
ynursytest.store hen prior nwrittennconsentnof nMcGrawn HillnLLC
.
e
, ACCESS Test Bank for Fundamental Managerial Accounting Concepts 10th Editi
n n n n n n n n n
on Edmonds n
Chaptern 01 n -n Management n Accountingn and n Corporaten Governance
ost nconcept nuntilntheynworknanproblem.nAfternyournexplanation,nassign
1-3
©n McGrawnHillnLLC.nAllnrights nreserved.n No n rm
ynursytest.store hen prior nwrittennconsentnof nMcGrawn HillnLLC
.
e
