Solution Manual for Managerial Accounting 6th Edition by Jiambalvo

Solution Manual for Managerial Accounting 6th Edition by Jiambalv Complete downloadable file at: https://testbanu!eu/Solution"Manual"for"Managerial" Accounting"6th"Edition"by"Jiambalv Chapter # Managerial Accounting Accounting in the $nformation Age QUESTIONS

1. The goal goal of manager managerial ial accoun accountin ting g is to provide provide informat information ion needed needed for planning, planning, control, and decision making. 2. Budg Budget eted ed perf perfor orma manc nce e is a usef useful ul benc benchm hmar ark k for for eval evalua uati ting ng curr curren entt peri period od performance. 3. This This question question asks students students to identify identify three three differ difference ences s betwee between n financ financial ial and managerial accounting. n the te!t, five differences are noted" a# $anage $anageria riall account accounting ing is direct directed ed at interna internall rather rather than e!ternal e!ternal users of accounting information. b# $anage $anageria riall accoun accountin ting g may deviate deviate from from genera generally lly accepted accepted account accounting ing principles %&''(#. c# $anagerial $anagerial account accounting ing may present more detail detailed ed informat information. ion. d# $anagerial $anagerial accountin accounting g may present present more more nonmonetary nonmonetary informat information. ion. e# $anagerial $anagerial account accounting ing places places more more emphasis emphasis on the future. future. ). *!amples *!amples of nonmone nonmonetary tary informat information ion that that might might appear appear in manageri managerial al accounting accounting reports include" the quantity of material consumed in production, the number of hours worked by the office staff, and the number of product defects. +. Total variable variable costs change change in proportion proportion to to business activit activity y while total total fi!ed fi!ed costs do not change. . -ala -alarie ries s of the home appli applian ance ce sales sales force force would would be a cont contro roll llab able le cost for the manager of the home appliance department at a -ears store. epreciation related to the department store building would be a noncontrollable cost. /. ncrem ncrement ental al analysi analysis s involves involves a compariso comparison n of the revenues revenues that change change and the costs that change when a decision decision alternative alternative is selected. selected. f incremental incremental revenue e!ceeds incremental cost, a decision alternative should be undertaken. 0.

ou ou get what you measure4 suggests that managers5 managers5 behaviors are affected affected by performance measures.

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6iambalvo Managerial Accounting

7. nform nformati ation on flows flows up and down the value value chain8bet chain8betwee ween n a compan company y and its suppliers and between a company and its customers. nformation technology is helping companies track buying patterns of customers and send targeted selling messages to them via email. nformation technology is also helping companies better manage their supply chains and gain internal efficiencies. 19. ' legal legal action action is not necessarily necessarily ethical. ethical. *thical *thical actions actions involve involve what5s what5s right4 right4 while while legal actions involve operating within boundaries of the law. EXERCISES E#! %&' () -uppose the company selected is $icrosoft.

$easure 1" ;avorab rable outc utcome" $ system notes that a customer has had three bookings in the last year. hen the customer checks in, the hotel offers a complimentary room upgrade  which results in increased customer loyalty. loyalty. The =>$ system identifies the top 1,999 guests in terms of annual billings and does a direct mailing of certificates that can be redeemed for a free nightCs stay resulting in increased customer cu stomer loyalty. loyalty. The =>$ system notes that a customer has traveled with a small dog and wants the staff to walk the dog in the park in the early morning. The reservationist asks if this service is needed when booking an upcoming stay and makes sure a staff person is available. E,! %&' #) $egan can prepare a profit budget for each store %planning#. 't the end of the accounting period, she can compare actual profit to the budget for each store %control#. -ignificant differences from the budget should be investigated to determine their causes.

other than lack of effective effective E6! %&' #) c4 is false. There are many possible reasons, other management, why actual costs are greater than planned. Typically, Typically, performance reports only suggest areas that should be investigated. E-! %&' #) eidre should not be concerned that cost of sales has increased. =ost of sales is a variable cost and it is e!pected that it will increase when sales increase. n the budget, cost of sales %D)99,999# is /E of sales %D99,999#. 'ctual cost of sales %D)2+,999# is 1E of actual sales %D/99,999#. Thus, while cost of sales has increased, it has not increased disproportionate to the increase in sales. E.! %&' #). $anagerial accounting focuses on accounting information for internal decisionAmaking. This focus differs from financial accounting in a number of ways. ;or e!ample managerial accounting" 1# focuses on internal users, 2# can deviate from generally accepted accounting principles %&''(#, 3# presents more detailed information, )# presents more nonmonetary information, and +# places emphasis on the future. E! %&' #) ;or purposes of awarding bonuses, it may be advisable to record sales  when orders are placed so that the sales force is rewarded on a timely basis. f f the company waited until the order was delivered, the sales force might be rewarded more than a year after obtaining a customer order. The point is that for internal reporting purposes, companies need not follow &''(. &''(. E#0! E#0! %&' *)

a. b. c. d.

variable fi!ed variable fi!ed

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6iambalvo Managerial Accounting

E##! E##! %&' *)

a. b. c. d. e.

variable variable fi!ed fi!ed variable

affect the cost. Thus, E#*! E#*! %&' *) ' cost is controllable by a manager whose actions affect for e!ample, advertising may be a controllable cost for a store manager %who decides how much to spend on advertising# but it would be a nonAcontrollable cost for the manager of a department at the store %who is not consulted about the amount to spend on advertising#. E#(! E#(! %&' *1 *1 () Takesha should not consider how much he paid for the old machine because that is a sunk cost. Fe should consider the value value of the old machine in the used lab machine market8an incremental cash inflow equal to the market value of the old machine that will result if he buys a new lab machine. E#+! E#+! %&' *)

ncremental revenue per day Gess incremental costs" Gabor (arts Transportation Hffice staff ncremental (rofit per ay

D2,+99 D/99 +99 199 299

1,+99 D1,999

Hpportunity cost I D1,999 per day ! +2 days I D+2,999 >ent and depreciation do not enter into the calculation of the opportunity cost since these costs are not incremental %they will be incurred whether or not Jen decides to stay open on -aturday#. E#,! %&' *) f Kachary visits his friend, he will incur a D+9 %1 hours ! D3+# opportunity cost.

to be less than D because part E#6! E#6! %&' *1 *1 () The incremental cost per gallon is likely to of the D amount relates to fi!ed costs such as depreciation of equipment. f the incremental cost per gallon is less than D, then the incremental cost of 1+,999 gallons is less than D79,999. E#-! E#-! %&' ()

Chapter # $anagerial 'ccounting in the nformation 'ge

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a. hen a second second shift is added, added, material material costs, costs, workers5 workers5 salaries salaries,, and benefits benefits are likely to increase. b. epreciation epreciation of the the building building will not not increase increase when a second second shift is added. added. E#.! E#.! %&' () The owner of G' (orsche may link Fulmut5s annual bonus to to the average customer satisfaction rating. Thus, there is a link between the measure and Fulmut5s financial financial welfare. -ome actions that Fulmut Fulmut can take that may help ratings would be to 1# provide a comfortable waiting area for customers, 2# provide free coffee and snacks in the waiting area, and 3# provide transportation service for customers while their cars are under repair. E#! E#! %&' ,) The $'5s $'5s -tatement of *thical *thical (rofessional (ractice does not directly address this issue so students may take either side of this issue.

-hauna does have obligations" -tudents could argue that the practice of entertaining customers with lavish vacations is a type of bribe that would violate the =ompetence standard %perform duties in accordance with laws and regulations# or the ntegrity standard %refrain from engaging in any conduct that  would pre?udice carrying out duties ethically#. -hauna does not have obligations" -tudents could argue that the practice of entertaining customers is not against the law and does not reduce one5s ability to carry out duties ethically. ethically. E*0! E*0! %&' ,). >esponses will vary. *!amples of =ontroller duties are as follows" =ost accounting, preparation of o f financial statements in accordance with &''(, &''(, budgeting, variance analysis, advisor to senior leadership. *!amples of skills are as follows" B' in 'ccounting, 'ccounting, =(', +A19 years accounting e!perience, + years management e!perience, e!cellent written and verbal communication skills. E*#. -tudent -tudent answers answers will will vary vary..

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PROBLEMS

2#! %&' #1 *)

a.

-antiago5s -alsa Budgeted (roduction =osts $ay 291/ (01000 2roduction Jars of Salsa   ngredient costL D2),999 Gabor costLL 1),)99 >ent +,999 epreciation ,999 Hther 1,999 Total D+9,)99

L%D29,999 M 2+,999# ! 39,999 LL%D12,999 M 2+,999# ! 39,999

b. ith a wage rate of D29, /29 hours %D1),)99 M D29# will be needed in $ay. $ay. n 'pril, only 99 hours were needed %D12,999 M D29#. Thus, 129 additional hours  will be needed in $ay. $ay. The company can plan on hiring a partAtime worker in $ay %appro!imately 39 hours per week# or the additional hours can be addressed with overtime, which overtime, which would make the hourly rate higher. higher. n which case, the hourly rate would be higher.