Solution manual introduction to management accounting 14e by horngren

To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com Solutions Manual INTRODUCTION TO MANAGEMENT ACCOUNTING Fourteenth Edition Charles T Horngren Gary L Sundem William O Stratton David Burgstahler Jeff Schatzberg Upper Saddle River, New Jersey 07458 To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com AVP/Executive Editor: Steve Sartori Project Manager: Kerri Tomasso Production Project Manager: Kevin Holm Buyer: Michelle Klein Printer/Binder: Bind-Rite Graphics, Robbinsville Copyright © 2008 by Pearson Education, Inc., Upper Saddle River, New Jersey, 07458 Pearson Prentice Hall All rights reserved Printed in the United States of America This publication is protected by Copyright and permission should be obtained from the publisher prior to any prohibited reproduction, storage in a retrieval system, or transmission in any form or by any means, electronic, mechanical, photocopying, recording, or likewise For information regarding permission(s), write to: Rights and Permissions Department This work is protected by United States copyright laws and is provided solely for the use of instructors in teaching their courses and assessing student learning Dissemination or sale of any part of this work (including on the World Wide Web) will destroy the integrity of the work and is not permitted The work and materials from it should never be made available to students except by instructors using the accompanying text in their classes All recipients of this work are expected to abide by these restrictions and to honor the intended pedagogical purposes and the needs of other instructors who rely on these materials Pearson Prentice HallTM is a trademark of Pearson Education, Inc 10 ISBN-13: 978-0-13-241645-0 ISBN-10: 0-13-241645-X Visit http://downloadslide.blogspot.com To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com CONTENTS Page General Comments v Sample Assignment Schedules vii Linking of 13th Edition Problems to those in the 14th Edition xi Comments on Choices of Problems in Each Chapter xvii Presentation of Solutions in Class xxv Conducting the Course xxvi Key Amounts from Suggested Solutions to Selected Problems xxviii Solutions by Chapter 10 11 12 13 14 15 16 17 Managerial Accounting, the Business Organization, and Professional Ethics Introduction to Cost Behavior and Cost-Volume Relationships .40 Measurement of Cost Behavior 105 Cost Management Systems and Activity-Based Costing 175 Relevant Information for Decision Making with a Focus on Pricing Decisions 246 Relevant Information for Decision Making with a Focus on Operational Decisions .311 Introduction to Budgets and Preparing the Master Budget 382 Flexible Budgets and Variance Analysis 438 Management Control Systems and Responsibility Accounting 495 Management Control in Decentralized Organizations 552 Capital Budgeting 616 Cost Allocation …………………… 687 Accounting for Overhead Costs 770 Job-Costing and Process-Costing Systems 841 Basic Accounting: Concepts, Techniques, and Conventions .881 Understanding Corporate Annual Reports: Basic Financial Statements 918 Understanding and Analyzing Consolidated Financial Statements 971 iii To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com iv To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com GENERAL COMMENTS Please read the textbook preface before examining this material Because this book may be used in a wide variety of courses, several sample assignment schedules have been prepared We recommend using these as a starting point for building a tailored schedule The scope and depth of a particular assignment schedule largely depend on the instructor's personal evaluation of the relative importance of various topics In turn, his or her evaluation will be influenced by students' backgrounds and other courses in the curriculum For example, many instructors requested a more straightforward coverage of activity-based costing in Chapter 4, primarily because most of their students were not accounting majors and needed only fundamental concepts At the same time, others prefer a more demanding coverage such as for courses with accounting majors or graduate-level accounting courses We have significantly revised the ABC coverage to address these needs, providing a three-tiered coverage that meets the needs of several course objectives Chapter includes an introduction to ABC, Appendix provides a more detailed example, and Chapter 12 (especially Appendix 12) gives more details This edition, as previous editions, contains both straightforward assignment material, homework that can be solved simply by referring to the presentations in the chapters, and more challenging problems, which require more thoughtful analysis This book's approach divorces product costing for financial reporting purposes from planning and control For example, Chapters through 11 assume that no changes take place in the level of beginning and ending inventories This sharpens the analysis of planning and control, enhances clarity, and eases the learning process The problems of product costing are then considered in Chapters 12 through 14 This approach may be unconventional, but classroom experience and experimentation have convinced us of its superiority over the traditional approach, which interweaves product costing, planning, and control If students raise thorny questions regarding inventory valuation when Chapters through 11 are being covered, we usually ask them to postpone their queries until Chapters 12 through 14 are discussed If desired, Chapters 12, 13, and 14 may be studied at any time after Chapter For comments on how to choose among the various problems in each chapter, see the section entitled "Comments on Choices of Problems in Each Chapter." Other teaching aids for use with this textbook are an Instructor's Resource Manual (which includes chapter overviews, chapter outlines organized by objectives, teaching tips, a chapter quiz, transparency masters, suggested readings and a video guide that carefully integrates the videos into classroom lectures), Solutions Transparencies (which includes acetates for all the end-of-chapter assignments), a Test Item File (including multiple choice, true/false, comprehensive problems, short-answer problems, and critical thinking questions), the Prentice Hall Custom Test (a computerized testing package), On Location Video Library (which includes segments on companies such as Three Dog Bakery, Nantucket Nectars, Oracle, McDonalds, and many more), the PH Professor: A Classroom Presentation on PowerPoint (includes over 50 PowerPoint slides for each chapter), and Power Notes (derived from the PH Professor, this efficient note-taking supplement can be downloaded from our website at www.prenhall.com/myPHLIP An Instructor's Resource CD-ROM, complete with all instructor support materials, is available upon adoption v To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com Available for students is a Study Guide that provides overviews, study tips and chapter reviews formatted for easy note-taking, and self-tests including a variety of test questions to prepare for examinations Spreadsheet Templates are also available for selected exercises and problems are identified in the text by a CD icon Students may opt to purchase the Student Resource CD-ROM rather than download spreadsheets, PowerPoints, etc from the web site vi To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com SAMPLE ASSIGNMENT SCHEDULES Summary of Potential Assignments Suggested alternative schedules are summarized here in terms of the relative percentage of time to be devoted to various chapters Detailed assignment schedules are shown after this summary These schedules all assume a straightforward coverage of ABC is desired For a more in-depth coverage see Table A on pages xix –xx Alternative 1* Sequence A Sequence B Percentage Percentage Chapter of Time Chapter of Time 2% 2% 5 6 8 5&6 12 13 10 5&6 12 11 10 10 11 10 15 12 13 10 14 12 Review or Exams 14 Total 100% Review or Exams 14 Total 100% Alternative 2** Sequence A Sequence B Percentage Percentage Chapter of Time Chapter of Time 2% 2% 15 15 16 16 17 6 12 5&6 10 13 14 5&6 10 10 11 10 12 10 11 Review or Review or Exams 14 Exams 14 Total 100% Total 100% * For students who have taken one term of elementary financial accounting immediately prior to this course ** For students who have not taken elementary financial accounting recently Students with no background in elementary financial accounting will have to spend more time on Chapters 15 and 16 than is suggested in the above tables Use of Fundamental Assignment Material Some instructors may prefer to assign all the problems in either the A series or the B series of problems under "Fundamental Assignment Material" Each series includes a set of problems that covers the most important topics in the chapter In addition to the A or B series, selected problems from "Additional Assignment Material" can be assigned as time allows However, for those who wish to select particular problems in each chapter, some suggestions follow vii To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com Alternative 1, Sequence A Designed for one semester of 15 weeks with three 50-minute meetings per week Note that longer semesters permit either more intensive or extensive coverage, depending on instructor preferences No of Class Meeting Chapter in Text Introduction Ch - Perspective Ch - Excluding appendices Appendices to Ch 11 12 13 14 15 Ch Review Ch Review Ch Ch (See discussion on p xviii and Table A) Review Ch Review Ch (Consider jump to Ch 12) Ch Review Ch Review Ch Ch Review Ch 16 Review Ch 17 18 19 20 21 22 23 (Consider jump to Ch 11) Ch Review Ch Ch Review Ch Review Ch Review Ch Review Ch (Consider jump to Ch 15) 10 Problem Assignments Normal: Based on Approximately Two Hours Selected Additional of Homework Problems if Time per session Permits See the section that follows shortly, "COMMENTS ON CHOICE OF PROBLEMS IN EACH CHAPTER." A1, A3, 32 51 A1, A2 (or 46) and A3 (or 32, 33, 40, 44, 45 B1, B2) and 30 (or 31) 58 or 59, 60 or 61 Any of 37-39, 56 or 59 or 62 A1 & A3 (or B1 & B3) 47 A2 or B2 57 38, 51 53, 54 (appendix) A1 (or B1), A2, B2 32, 37, 40 A4 (or B3), B4, 43, 44 41, 42 49, 53 A1, A2, 47 (or 50 or 51) B2 63 A4 (or B5 or 59) A1 (or 60), any of 45, 46, 49, or 50 56, 65, (53 or B3), 68 57 40 or 43 53 or 54, 59, 60, 61 64 57 Start A1 or B1 Finish A1 or B1 A1 (or B1 or 36 or 37) A3 or B2, 43 44, 45 A2, B3, 39 50, 53 30, 32, 33, 35 37 Any of 24-27 Any of 29-31, 33 41, 47 32, 48 40 viii 66, any of 28, 29, 46, or 47 To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com No of Class Meeting Problem Assignments: Normal: Based on Approximately Two Hours Selected Additional of Homework Problems if Time Permits per session 24 25 26 27 28 29 30 31 32 33 Chapter in Text Review for Exam *Test on Ch thru Ch Ch Review Ch Ch 10 Review Ch 10 Ch 11 Review Ch 11 Review Ch 11 Review Ch 11 A1 or B1, A2 or B2 A3, B3, 46, 49 A1 or B1, B2 A2, A3, A4 or B4, A1 or B1, 44 or 45 38 or 39, 60 49, 52 A3 (or B3), A4 (or B4), 69 34 35 36 Review Ch 11 Ch 12 Review Ch 12 46 or 47, 66 A1 or B2, B1 or A3 A2 or B3 37 38 39 40 41 42 43 44 45 Review Ch 12 Ch 13 Review Ch 13 Review Ch 13 Ch 14 Review Ch 14 Review Ch 14 Final review Final examination A4 or B4 A1 or B1 A2 or B2, 32 A3 or A4, B3 or B4 A1 or B1, 23, 25 A2 or B2, A3 or B3 A4 or B4 50 48, 52 30, 40, 41, 42, 43 47, 50, 53 Any of 29-35 65 53, 71 A5 or B5 and any of 4043 53, 67, 68 39 or 40, 46 33 or 34, 41 and 43 (or 42 and 43), 44 and 45, 55 (extended case) 35, 36, 53 38 or 39 Any of 44-49 45, 46, 48, 69 Any of 24-27, 39 or 42 30-33, 43 48 *Some instructors devote time to discuss tests in subsequent sessions We have found it more fruitful to hand out photocopied solutions (try using student solutions from the test) and have students their checking not on class time An alternative is to have students correct their tests and turn in the corrected tests to be graded as a homework assignment (for credit) See the later section, "PRESENTATION OF SOLUTIONS IN CLASS." Alternative 1, Sequence B This is the same as the above, except that many instructors may prefer to interweave product costing and corresponding material on planning and control Assignments 35-40 may be used immediately after meeting 10 Furthermore, assignments 30 through 34 may be used immediately after 16, and assignments 41 through 43 may be used immediately after 23 ix To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com Alternative 2, Sequence A No of Class Meeting 10 11 12-44 45 Problem Assignments Normal: Based on Approximately Two Hours Selected Additional of Homework Problems if Time per session Permits Chapter in Text Introduction Ch – Perspective Ch 15 - Basic Concepts Review Ch 15 Ch 16 Review Ch 16 Appendix 16A Ch 17, Part One Review Ch 17, Part One Ch 17, Part Two Appendix 17 Same as alternative 1, Sequence A, from session thru 37, omitting sessions 17 and 18 Final examination A1, A3, 32 A1 or B1, 29, 328, 42, or 43 A2 or B2 or 35 A1 or 42, A2 or 49, A3 or 50, A4 or 51 59, 60 56 or 68, 69 A1 or B1, B3 A2 or B2, 35 A5, B5, 47 37 or 38 51 28, 33 A3 or B3 B1, B2, B3 41, 65, 67 55, 58, 71 A3, A4 48 50, 51 Students with no background in accounting will need to spend more time on Chapters 15, 16, and 17 than is suggested in the tables above Some instructors may wish to omit parts of Chapters 16 and 17 Alternative 2, Sequence B This is basically the same as Alternative 2, Sequence A, except that those instructors who wish to cover the chapters on planning and control earlier in the course may prefer to delay sessions through 11 until the end of the course Moreover, the sessions for Chapters 10 and 17 may be deleted, whereas Chapters 7, 13, and 14 may be included Other Possibilities Some instructors prefer to concentrate on a few chapters in greater depth and to delete other chapters An example is expanding the coverage of activity-based costing to include cost-system design and use, multistage ABC, and integrating service-department allocation, product profitability, and customer profitability When we use this approach, we delete Chapters 13 through 17 and occasionally Chapters and 11 Other instructors prefer to cover all the chapters To so effectively, an instructor must obviously concentrate on the Normal Problem Assignments above and condense the number of sessions per chapter x To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com Chapter 9: Management Control Systems and Responsibility Accounting Chapter problems focus on setting goals and objectives, developing incentives, and measuring performance toward objectives Goals and objectives are covered in 9-32, 9-36, 9-42, and 9-50 Incentives are covered in 9-34 and 9-44 Performance measurement is in 9-37, 9-43, 9-48, and 9-49 Case 9-50 combines strategic pricing issues, cost behavior, and productivity; it is not a long case, but it is thought provoking Problems 9-35, 9-45 and 9-48 cover the balanced scorecard, and the relationship between strategy and key success factors Chapter 10: Management Control in Decentralized Organizations Many instructors will want to delay assigning Chapter 10 until the end of the course Chapter 10 is easily divisible into two separate parts, one on performance measurement including economic value added and residual income measures and one on transfer pricing In any event, the material can be covered on either of two levels: a brisk survey, which would concentrate on 10-A1 and 10-A2 (or 10-B1 and 10-B3), and problem 10-40 (comparison of EVA and residual income measures), or a deeper study, which would necessitate more than one class session There are several "nuts and bolts" problems: 10-A2, 10-A4, 10-B1, 10-B3, 10-27 through 10-30, and 10-34 through 10-36 Problems 10-29 and 10-43 deal with economic profit Problems 10-30, 10-40, 10-41, and 10-42 cover economic value added Problems 10-50 provides perspective on transfer pricing, while several other problems cover various transfer-pricing issues 10-36 and10-53 cover multinational transfer prices Problem 10-37 introduces agency theory Case 10-55 (a special favorite) shows how the issues in Chapters and 10 are closely related We especially like 10-55 because it underscores the goal congruence and management effort aspects of designing management control systems Too often, much material in this chapter is dismissed as being too "soft" or too qualitative for an accounting course We disagree We regard this chapter as the conceptual core of the course It stresses the central questions that the designer of a control system must face, even though few pat answers are provided Knowing what central questions to ask is an extremely important lesson for accountants and managers Chapter 11: Capital Budgeting Many instructors want to introduce income taxes at the outset of capital budgeting However, income tax considerations are not needed to grasp the essential ideas The problem of determining what is relevant is far more imposing that any difficulties in using discounted cash flow tables In addition to the fundamental assignment material, our favorite problems include 11-60, 11-49, 11-51, and 11-52 Problem 11-52 is of special interest because it has negative operating cash flows under both alternatives but a positive incremental operating cash flow Cases 11-65, 11-66, and 11-67 address investment decisions in the new manufacturing environment Problem 11-53 might be assigned in conjunction with Problem 11-63 The "nuts and bolts" problems are 11-A1, 11-38, and 11-45 (or 11-B1, 11-39, and 11-44), 11-29 through 11-32, and 11-34 xxi To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com Taxes complicate capital budgeting but not change the basic concepts Problems 11-A3 and 11-A4 (or 11-B3 and 11-B4) provide the most efficient way to drive the major points home regarding income taxes and discounted cash flow, but 11-A5 (or 11-B5) should also be used if there is time Problems 11-40 and 11-41 provide informative basic exercises Problem 11-69 is a new problem that examines a hypothetical capital budgeting context with taxes for Nike Chapter 12: Cost Allocation Chapter 12 contains some technical details on cost allocation, and instructors who wish to avoid such detail can skip this chapter entirely Those who desire an emphasis on ABC and ABM may want to use the new material on customer profitability (pages 539-548) Others may want to insert this chapter and Chapter 13 immediately after Chapter Problem 12-A2 is comprehensive, covering the general framework for allocation, service department allocation, ABC, customer profitability, and process maps Problems 12-A3 and 12B1 contain the important basic ideas of cost allocation Problems 12-A1, 12-B2, 12-31, and 1249 compare direct and step-down methods of cost allocation Problem 12-B3 presents the concepts of customer profitability incorporating the costs to serve The newly constructed case 12-55 is a demanding, indepth case involving the design and use of ABC to determine both product and customer profitability Activity-based costing is the focus of problems 12-31, 12-50, 12-51, and 12-52 Problems 12-41 through 12-45 illustrate and apply the chapter discussion for service-department cost allocation, process maps, ABC, and customer profitability Choice of cost pools and allocation bases is covered in case 12-50, and case 12-51 presents multiple allocation bases Joint product costs are the focus of problems 12-A4, 12-B4, 12-35, 12-36, and 12-53 Multistage ABC is the focus of problem 12-54 Chapter 13: Accounting for Overhead Costs This chapter may be assigned without assigning Chapters 12 However, Chapter should precede Chapter 13 Assign this material carefully so that the student does some simple work first Problems 13-A3 (or 13-B3), 13-A4 (or 13-B4 or 13-55), and 13-43 provide a basic introduction Problems 13-44, 13-45, and 13-58 concentrate on essentials of absorption and direct costing Cases 13-70 and 13-71 pursue the topic more deeply The essentials of production volume variances are covered in 13-60 A recapitulation of all variances, as discussed in the first appendix, is presented in 13-48, 13-49, 13-67, and 13-68 Problem 13-64 covers the disposition of variances Please note the overall tone of this set of problems The emphasis is on an overall perspective, not on detailed intricacies of variance analysis In particular, consider the lessons that can be learned from 13-56 and 13-71 xxii To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com Chapter 14: Job-Costing and Process-Costing Systems This chapter is organized into two distinct parts – job-costing systems and process-costing systems Job-costing systems Job-costing systems may be assigned without assigning processcosting systems (a subject we prefer to omit) Job costing may be studied at two levels or more The first level would be confined to 14-A1 or 14-B1, which cover the basic points At this first level, 14-21 to 14-24, 14-28, and 14-39 might also be considered There are many short straightforward exercises and problems Consider 14-25, and 14-41 Nonmanufacturing situations are presented in 14-23 and 14-42 Process-costing systems The second part of the chapter on process-costing systems also may be studied as three independent sections For example, many instructors may confine their coverage to process costing basics and not cover the effects of beginning inventories and backflush costing The second section considers the effects of beginning inventories Others will skip this second section but cover the last section, which introduces backflush costing The assignment material is divided accordingly Problems 14-A2, 14-B2, 14-32 through 14-35, and 14-45 through 14-47 cover the basics of process costing Problems 14-A3, 14-B3, 14-36 through 14-38 cover the weighted-average method Finally, problems 14-A4, 14-B4, and 14-48 cover backflush costing SPECIAL NOTE ON CHAPTERS 15-17 Much of the assignment material in Chapters 15-17 is similar to that in this textbook's companion volume, Introduction to Financial Accounting Students who have thoroughly studied that book will have little need to study Chapters 15-17 here, except as a review or to fill in gaps For example, if there is time, many topics in the final two chapters of this book will deserve more careful study than may have been feasible in an earlier course Consider intercompany investments, consolidations, and accounting for changing prices Chapter 15: Basic Accounting: Concepts, Techniques, and Conventions This material can be used in a variety of ways, depending on the objectives of the course and the backgrounds of the students For example, if we are teaching managers in a class on "financial accounting for non-financial executives," we usually assign either 15-A2 and 15-A3 (or 15-B2 and 15-B3) If we have more time, we also assign 15-A1 (or 15-B1), 15-28, and 1529 For regular classes, we also like to assign 15-32 (or 15-33 if there is enough time) and 15-34 Problems 15-41 through 15-44 all help understand real published financial statements The assignment material for Appendix 15B (15-36 through 15-40) permits a study of the mechanics of bookkeeping and provides a deeper study of the general concepts of the chapter If there is little time, it is unnecessary to cover the appendix on ledger accounts Subsequent chapters are not dependent on knowledge of T accounts xxiii To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com In sum, there is an ample supply of material that can be used for a quick survey or for a deep probing of basic accounting concepts and procedures The amount of time devoted to the chapter will obviously depend on the instructor's purposes Chapter 16: Understanding Corporate Annual Reports: Basic Financial Statements Although this chapter was not formally divided into major parts, instructors can pick and choose if they prefer For instance, some instructors may wish to assign only the early part of the chapter on the balance sheet and income statement Consider the following pertinent assignment material that covers the highlights: 16-A1 (or 16-B1), 16-41, 16-42, 16-59 through 16-63 The statement of cash flows is covered in the fundamental assignment material (16-A2 through 16-A4, 16-B2 and 16-B3) and also by 16-43 through 16-53 and 16-64 through 16-67 To explore the basics of the statement of cash flows step-by-step see exercises 16-43 through 16-46 Problems 16-47, 16-48, 16-50, 16-52, 16-53, 16-66, and 16-67 cover the indirect method Appendix 16A is covered in 16-54 through 16-58 and 16-68 through 16-71 Problems 1656 and 16-68 are good basic problems that have solutions similar to first Exhibit 16-18 in the chapter Chapter 17: More on Understanding Corporate Annual Reports Either Part or Part can be assigned separately Part is a simple coverage of intercorporate investments, including consolidated financial statements Because consolidated statements are so pervasive, we believe it is important for students to understanding the basic issues involved We always take a few minutes in class to stress the highlights of the consolidated balance sheet and income statement in the two big exhibits in the chapter Problems 17-B2 and 17-B3 may be the most serious candidates for homework assignments, with 17-A2, 17-A3, and 17-A4 as alternatives Problem 17-35 provides a general overview of consolidated financial statements Problems 17-31, 17-32, 17-45, and 17-46 cover goodwill Problem 17-49 provides an especially good context to discuss ethics To cover financial ratios, consider 17-A5, 17-B4, 17-B5, 17-36, and 17-48 We cover financial ratios only if the finance course does not Problems 17-37, 17-38, 17-50, and 17-51 cover Appendix 17 Problem 17-38 has a solution similar to Exhibit 17-9 of the text When inflation is covered, there is a danger of getting too enmeshed in the details of how the four major methods differ Some time should be devoted to the measuring of the differences, especially the strengths and weaknesses of the historical cost/constant dollar method in comparison with the other methods xxiv To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com PRESENTATION OF SOLUTIONS IN CLASS Instructors have a variety of views regarding the use of classroom time for homework solutions Most instructors put solutions on a chalkboard or use overhead projectors In turn, many students frantically copy the materials in their notes Our practice is to reproduce the printed homework solutions for distribution either before, during, or after the discussion of a particular solution The members of the class are glad to pay a modest fee to the school to cover the reproduction costs In this way, students can spend more of their classroom time in thinking rather than writing Furthermore, they have a complete set of notes Some instructors object to this procedure because it provides students with a "file" that can be passed along to subsequent classes Students in subsequent classes will then use the "file" to avoid conscientious preparation of homework There will always be some students who hurt themselves by not doing homework in an appropriate way Why should the vast majority of students be penalized by withholding the printed solutions? The benefits of using printed solutions clearly outweigh the costs; we no longer fret about the few students who beat the system (and themselves) Similarly, we distribute printed solutions to tests and examinations along with a summary of overall class performance We not devote class time to discussing these solutions The students deserve feedback, but they have sufficient motivation to scrutinize the printed solutions and check their errors on an individual basis In this way more class time is available for new material If students have complaints about grades, we usually ask them to cool off for 24 hours and then submit a written analysis of how they were unjustly treated We take these complaints in batches, regrade the papers, and return the papers If the student then wants to have a person-toperson discussion of the matter, he or she is welcome to see us This procedure may seem too impersonal, but we recommend it to those teachers (like us) who have been through some painful debates that have been inefficient and frustrating for both student and teacher Incidentally, key numbers from the solutions to each problem, which begin on p xxix of this solutions manual, are available in quantities without charge from Accounting Editor, Prentice-Hall, Inc., Upper Saddle River, New Jersey 07458 Some instructors may wish to distribute these to the class at the start of the course xxv To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com CONDUCTING THE COURSE From time to time we have received inquiries regarding how we teach a course in management accounting The following "Notes on Classroom Procedures" explains our philosophy, and it can be handed out to students at the start of a course: Notes on Classroom Procedures The following describes my general teaching style I am placing this description in writing to avoid any misunderstanding; in the past, a few students have been misled about why I operate classes in a particular way In my view, the most effective and efficient use of classroom time aims at reinforcing or clarifying what the student has tried to learn on an individual basis (or sometimes a group basis) before entering the classroom Therefore, optimal learning is achieved by (a) wholehearted preparation via studying the assigned readings and solving the assigned problems or cases; (b) discussion of the material by the students and teacher in class; and (c) the instructor's underscoring of the most important points via comments or short lectures (lecturettes) I rarely give lectures per se My lectures are in the text or the readings Obviously, problems or cases are not ends in themselves; instead they are the means of focusing on central issues, concepts, or knowledge Given the foregoing, the success of this course depends on adequate preparation for classes by both students and teacher It also requires participation during class always participation of the mind and occasional participation of the mouth Throughout the term, a variety of helpful questions arise from a variety of students As in all situations throughout life, some individuals naturally speak more often than others (We all realize that there is no necessary consistency between lots of talk and lots of comprehension of the subject matter.) I use a call list for two major reasons: (a) to get acquainted with all the students in class so that I can at least link faces with names; and (b) to provide motivation and ensure widespread participation From time to time, you may come to class unprepared for a variety of reasons In such instances, if you want to preclude the possibility of being called on, simply put your name on a slip of paper on the front desk before the session begins In this way, everybody wins; I don't enjoy calling on students who are unprepared xxvi To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com Unless otherwise specified, no assignments need to be handed in However, as you know, the best preparation entails writing solutions and answers Your contribution to the class via your solutions, comments, and questions is an essential part of the course If you are absent from a particular class, you should hand in your solutions at the subsequent class This requirement encourages an active rather than a passive role in the course Some of you may have unusually severe anxiety about being called on in class If so, please see me after class during the first week of the quarter to discuss alternate arrangements My use of a call list is not intended to be a terror tactic xxvii To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com KEY AMOUNTS FROM SUGGESTED SOLUTIONS TO SELECTED PROBLEMS For Students' Use in Checking Their Own Solutions Introduction to Management Accounting, 14th Ed Horngren, Sundem, Stratton, Schatzberg, and Burgstahler Chapter 1-A2 Tot var., $175U 1-B2 Actual, $14,340 1-B3 Controller 1-30 2, 4, 5, Marketing 1-31 1-32 1-33 1-34 1, 7, Production 3, 6, Financial Rev var., $2,000U Line, Marketing Chapter 2-A1 95,750 2-A2 25,000; $25,000 2-B1 $64,600 2-B2 1,000 2-B3 $1,220 2-28 Sales, $940,000 2-29 Net inc., $80,000 2-34 $60,000,000 2-35 80,000 rooms 2-36 $28 2-37 41,143 2-38 66,000 2-39 $1,700,000 2-40 $76,100 2-41 $1,100,000 2-42 P & G $5,100,000 2-43 $468 2-44 1,010,989 2-45 2-46 2-47 2-48 2-49 2-50 2-51 2-52 2-53 2-54 2-56 2-57 2-58 2-59 2-60 2-61 2-62 2-63 $77,000 3,500 32.5 Operating income $16,758 $1,100 $71 million $104 per day 21.8% $4,634 40,000 $140,000 225,000 52.5% a 15,000 Old, $20,000; New, $60,000 B-E: L, 170; D, 85 283,125 xxviii To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com Chapter 3-A1 b; a; d; b; a;11 b 3-A2 Sign A, $180 and $80 3-A3 Var., $5.00 3-B2 Act anal., Z15, $64 3-B3 FC, $80,000,000/month 3-32 B 3-34 2001, $76 million 3-35 $3,400/month 3-36 Disc., $85,000 3-37 B-E, 50,000 orders 3-38 Var., $2.22/unit 3-41 3-44 3-45 3-48 3-49 3-50 3-52 3-54 3-55 3-57 Var., £20/ton $3,000 fixed cost/week Var., $10,400U Projected income $4,000 Act anal., Blooms, $3,960 $4,280.50 $287.68 a # of boards, $149,133 $12,650 2006, $174.32/employee Chapter 4-A1 Small Std $35,600 4-A2 Tot., $146,000 4-A4 Company GP 13.73% Cell-Phone Casings GP 6.58% 4-B1 Hand Tool parts $88 4-B2 a $6/MH b $15/DLH 4-B3 Company GP 17.4% Cell-Phone casings GP 17.81% 4-B4 Slim, $16,250 4-37 D, V 4-39 b, f 4-40 U 4-41 4-42 4-43 4-44 4-46 4-47 4-49 4-51 4-52 4-53 4-54 4-55 GM, Pen Casings, $33,900 Std., $224 Process other trans., $159,000 Retail, $98.46 Alpha, $112,700 Tot Cost, $13,725 Gross margin, ($3,575) d Breakeven $122,727 c 3,000 Won $7,000 S, £2,033,500 b Ret., $1,672.50 5-39 5-42 5-43 5-44 5-45 5-48 5-50 5-52 5-54 5-55 5-56 5-57 5-59 5-61 c $26.80 $10 150% $201,600 $3,480,000 a €111,000,000 With, £101,200 548,334 Op inc @300,000, $210,000 2nd option by $20 Increase € 1,500 $5 $32.40 $1,550,000 Chapter 5-A1 $337,000 5-A1 Inc in op income 41.8% 5-A3 50% 5-B1 $2,438,000 5-B2 $150,000 decline 5-30 Difference, $53 5-31 $180,000 5-32 c ¥115,000,000 5-33 k $170,000,000 5-34 Sales, ZAR900,000 5-35 $90,000 5-36 $300 increase 5-37 a 150 5-38 250 xxix To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com Chapter 6-A1 $68,000 6-A2 Plain: $20, 28.6% 6-A3 $44,000 6-A4 $37,000 6-B1 Difference, €3.75/unit 6-B2 XY-7, 4/5 hour 6-B4 $300 6-B5 Difference, $10,000 6-32 Difference, $20,000 6-36 SFR 1,200 decrease 6-38 a 6-39 $100 6-40 Difference, $3,000 6-41 $20 6-42 $20,260 6-44 $21,600 Chapter 7-A1 Net inc., $30,860; cash bal., 8/31, $25,360 7-B1 Net inc., $14,367; cash bal., 3/31, $30,992 7-26 Sales 7-27 $860,000 7-28 $1,648,000 7-29 $495,000 7-30 July collections, $431,000 7-31 March collections, ¥230,400,000 7-32 $403,300 6-45 6-46 6-47 6-48 6-49 6-50 6-53 6-54 6-56 6-57 6-59 6-61 6-63 6-64 6-65 6-66 2 1 1 1 3 2 2 7-33 7-34 7-35 7-36 7-37 7-38 7-43 7-44 7-45 7-46 July purchases, $260,000 $33,000 Cash, 6/30, $31,000 Cash, 4/30, $166,300 Cash, 10/31, $13,115 $686,340 Inc., $575,000 $1,476,000 Total, $13,986,700 Income, 10% revenue increase $1,794 xxx 63.64% 60% Difference, $50,000 $312,000 With, $4,660,320 With, $9.07 $2.40 €48,600 $168,000 24,000 units Difference, $2,000 a 525/show $850,000 $300 $9.75 50,000 units To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com Chapter 8-A1 $980,000 + $.80X 8-A2 Sales-Activity var., $7,500U 8-A3 Mat quantity, $750U 8-B1 Flex.-bud var., $3,500U 8-B2 Lab price var., $22,500F 8-B3 117,000 hours 8-24 $411,800 8-25 @40,000, $14,400 8-26 Dir mat., $8/unit 8-28 Flex.-bud var., $14,500U 8-29 Mat price var., B39,500F 8-30 $14.62 8-31 Lab usage var., $4,200U 8-32 12,700 hours 8-33 Mat usage var., $2,500F 8-34 Sales-act var., $1,080,000U 8-35 Tot flex.-bud var., $3U 8-36 8-38 8-39 8-40 8-41 8-43 8-44 8-45 8-46 8-47 8-48 8-49 8-50 8-52 8-53 8-54 Act op inc., $134,400 Sales-act var RMB760,000F Flex bud Var $9,900U Quantity var , $1,200U Tot actual, $14,982 Labor usage var., $4,000U e 5,500SFR U Lab price var., $870F Mat pr var., $5,400F a DM Quantity, $800U Tot cost, $204.40 Dir mat., $52.704 a $9,200U $(10,680) Flex.-bud var., $11,000U Flex.-bud var., $12,200F Chapter 9-A2 Littleton seg cont $145,000 9-A3 2007, Bohn, $126,864/emp 9-B2 Div seg cont ($400,000) 9-34 C, March, ¥413,500 9-38 Duluth cont., $105,000 9-44 9-48 9-49 9-52 1 Chapter 10 10-A1 Beta, $66,000 10-A2 $40,000 disadvantage 10-A3 $26,000 advantage 10-A4 a $4.50 10-B1 b ROI, 33% 10-B2 2005, $2,626 million 10-B3 $3.35 per gallon 10-B4 c 5.72% 10-27 5.0% 10-28 A 18% 10-29 Y, $26,000 10-30 2006, $(87,938,000) 10-31 b Laurel, 28% 10-32 J, ROI, 28% 10-33 20% 10-34 a Overall, $13.00 10-35 10-36 10-38 10-39 10-40 10-41 10-42 10-43 10-44 10-47 10-50 10-51 10-53 10-54 10-57 $10 if excess capacity £400 Baker, ROI, 3% a Pub./Info., 17.3% EVA, $(87,938,000) 2005, $329,000,000 $2,252,050,000 Tools, ROA, rep cost, 17.3% a Plant, 10% Yes, $750,000 advantage $78.72 if idle capacity $23 to $39 $35 saved $24,000 increase 2006, ROI, US, 44.9% xxxi 640,000 BTL only, 123 20X3, 32.7 pounds/hr Breakeven, $839,474 To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com Chapter 11 11-A2 $28,240 11-A3 $(16,318) 11-A4 $(104,189) 11-A5 a $65,000, Cash up $59,000 11-B1 a $13,335.00 11-B2 $100,634 11-B3 $(12,060) 11-B4 $3,095 11-B5 Cash inflow, $14,000 11-29 b $25,459 11-30 $409,800,000 11-31 a $376,440 11-32 $371,379 11-33 $1,216,800 11-34 NPV, 20 yrs., $2,225 11-35 $7,972 11-36 $67,808 11-37 12% 11-38 $4,069 11-39 $6,862 11-40 Net inc., $56,000 11-41 $520,000 11-42 2007, $1,280 11-43 a $67,570 11-44 $1,114 11-45 11-46 11-47 11-48 11-49 11-50 11-51 11-52 11-53 11-54 11-55 11-56 11-57 11-58 11-59 11-60 11-61 11-63 11-64 11-65 11-66 11-67 11-68 11-71 Chapter 12 xxxii $2,240 $12,229 $75,838 Difference, $(15,994) Difference, $9,357 NPV, $22,552 Difference, £17,800 $21,000 45.2 trips $11,810 $(1,362) $9,735 NPV, $46,864 ¥87,897,000 $35,878 $11,069 $28,936 NPV, $11,697 $782 NPV, Skr 238,660 $5,034,375 NPV, $352,078 Alt C, NPV, $(209,117) Exp NPV, ($558,070) To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com 12-A1 12-A2 12-A3 12-A4 12-B1 12-B2 12-B3 12-B4 12-29 12-30 12.31 12-32 12-33 12-34 12-35 12-36 12-37 12-39 Tot., machining, $1,872,864 Display type A, $16.27 Northern, $6 million B, $7,680,000 Business, $72,000 a $10.45 Cust type 1, 64% Oat bran, $200,000 $1,770 Sunnyville, $60,000 Res., $401,159 Assembly, $868,096 Cust Type 2, 33% Cust Type 3, 25.2% B, $150,000 B, $240,000 $1,060,000 $.40 12-40 12-41 12-43 12-44 12-45 12-46 12-47 12-48 12-49 12-50 12-51 12-52 12-53 12-54 12-55 12-56 xxxiii To North, $562,500 Whole company, $688,740 Customer type 1, $379,500 Specialty stores, $316,000 Specialty stores, Cust Profitability, 11.5% Children’s, $6,300 M1, $183.32 M1, $182.92 $7.25 Model 1, ¥12,020 $24,075 $1,488 To A, op prof., $112 Residential, $3.5258 Cust Type 1, GP % 35% $216,750 To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com Chapter 13 13-A1 $775 13-A2 Underapplied, $8,000 13-A3 $10,000 13-A4 Gross margin, $1,960 13-B1 Lower by $10,000 13-B2 $20.00 13-B3 $1,000 13-B4 Absorption op inc., $447,000 13-38 Applied OH, $408,000 13-39 61,000 direct labor hours 13-40 b $350,000 13-41 Case 2, underapplied, $17 13-42 No proration, $22,000 lower 13-43 Var cost net income 20X9, $21 13-45 $3,000 13-46 ¥1,290,000 unfavorable 13-47 1.c $11,000 13-48 Efficiency variance, 400U 13-49 Flexible-budget variance fixed, 1,500F 13-50 $384,017 Chapter 14 14-A1 WIP, $55,000 14-A2 WIP, $11,400 14-A3 WIP, $304,000 14-B1 WIP, ₤29,000 14-B2 WIP, $675,000 14-B3 WIP, $3,968 14-21 2., 11 14-22 2., 14 14-25 Cost of houses sold, Oct., $605,000 14-26 WIP, $5,000,000 13-51 13-52 13-54 13-55 13-56 13-61 13-62 13-63 13-65 13-66 13-67 13-68 13-69 13-70 $350,727 First Valley, $39,375 Last months, $31,500 under Under absorption, $6 increase 20X5 variable cost net income, $100 20X5 variable cost net income, $100 Absorption op inc., $122,000 Absorption op inc., $228,400 Fixed OH prod.-vol var., $2,400F $75,000,000 Flex bud var., $27,000U Base c, 20X6, $13 e $1,146,500 1.b $45 Efficiency var., $3,600U Prod.-vol var., €1,200U Tot mfg cost, $95.03 2.b €270,000 14-27 14-28 14-32 14-33 14-36 14-40 14-41 14-42 14-45 14-46 14-47 Finished goods, $32,000,000 Case C, $6 per machine hour WIP, $1,069,200 WIP, $38,220 Conversion, 91,000 COGS, $884,000 4., $53,500 2., $31.25 $1,920,000 WIP, 132,000 WIP, ₤113,000 13-57 13-58 13-59 13-60 xxxiv To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com Chapter 15 15-A1 A, $25,000; H, $40,000 15-A2 Net inc., $7,000 15-A3 $50,000 15-B1 A, $2,145.2 million 15-B2 Net earn., $60 million 15-B3 $460,000,000 15-27 F 15-32 B179,000 15-33 X, $3,000; Y, $6,000 15-34 15-35 15-36 15-37 15-42 15-43 15-44 15-45 Net inc., $7,900 Accrual op inc., $62,200 Cr 5, 8, T a $719,700,000 a Net inc., $2,533 million Net earn., $1,351.4 million Rev., 8.8% Chapter 16 16-A1 Add PIC, $121,000 16-A2 Cash from op act., $254,000 16-A4 Net inc., $95,000 16-B1 Accounts Payable, $2,249 mill 16-B3 $4,451 million 16-41 Tot assets, € 2,680 16-42 L.-T inv., ¥15,000 million 16-43 $751,000 16-44 $408,000 16-45 $65,000 16-46 Cash from op act., NK251,000 16-49 Cash from op act., $215,000 16-51 Net inc., $20 million 16-52 Cash from op act., $70 million 16-53 Cash from op act., $28 mill 16-54 16-55 16-56 16-57 16-58 16-59 16-61 16-63 16-64 16-66 16-68 16-69 16-70 16-71 16-72 a $14,650 12/31/20X1, $75,000 LIFO, GM, $90,000 b EPS, $.175 LIFO, GM, $224,000 $12.5 million $345,288,000 Gain, $5,538,000 a Financing Cash fr op act., $80,426,000 a Lower, $184 LIFO, taxes $96 lower Op Inc., $9.0 billion 2006 op inc., $1,584 million 15% Chapter 17 17-A2 Consol op inc., $95 million 17-A3 Consol net inc., $93 million 17-A4 b $3 million lower 17-A5 a $60 million 17-B2 Consol op inc., $500 mill 17-B3 $192,440,000 17-B4 a €4,639 17-B5 1.92 17-29 $43 million; $50 million 17-30 Consol net inc., $290,000 17-33 $122 million 17-34 Tot assets, $490 million 17-35 17-36 17-37 17-38 17-41 17-43 17-44 17-45 17-46 17-47 17-48 17-50 Consol net inc., $135 million b 20X2, 6.3% Hold gain, CC/ND, $50,000 CC/CD, inc fr cont ops., $300 $3,661 million ¥1,205,000,000 $(10,567) million $2.97 billion less $2,534.8 million 7.532% a 1.16 c HC/CD, $1,172.6 million xxxv ... AMOUNTS FROM SUGGESTED SOLUTIONS TO SELECTED PROBLEMS For Students' Use in Checking Their Own Solutions Introduction to Management Accounting, 14th Ed Horngren, Sundem, Stratton, Schatzberg, and... EDITION PROBLEMS TO THOSE IN THE 14TH EDITION Users of the 13th Edition of Introduction to Management Accounting may have favorite problems that they want to continue to use To help select a... Suggested Solutions to Selected Problems xxviii Solutions by Chapter 10 11 12 13 14 15 16 17 Managerial Accounting, the Business Organization, and Professional Ethics Introduction to Cost