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Solution Manual for Managerial Accounting: Tools for Business Decision-Making, Fifth Canadian Edition

Solution Manual for Managerial Accounting: Tools for Business Decision-Making, Fifth Canadian Edition is your go-to study resource, offering clear and structured explanations of key concepts.

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    1 - 1 CHAPTER 1 Managerial Accounting ASSIGNMENT CLASSIFICATION TABLE Study Objectives Self - Study Questions Do It! Review Exercises A Problems B Problems * 1. Explain the distinguishing features of managerial accounting . 1, 6, 7, 8 1 3, 7, 8 * 2. Identify the three broad functions of management and the role of management accountants in an organizational structure. 3 1 5, 6 * 3. Explain the importance of business ethics . 2, 10 1 4 * 4. Identify changes and trends in managerial accounting . 4, 5, 9 2 9

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    BLOOM’ S TAXONOMY TABLE © 201 8 For Instructor Use Only 1 - 2 Correlation Chart between Bloom’s Taxonomy, Study Objectives and End - of - Chapter Exercises and Problems Study Objective Knowledge Comprehension Application Analysis Synthesis Evaluation * 1. Explain the distinguishing features of managerial accounting. D - 1, E - 8 E - 3, E - 7 * 2. Identify the three functions of management and the role of management accountants in an organizational structure. D - 1, E - 5, E - 6 * 3. Explain the importance of business ethics. D - 1, E - 4 * 4. Identify changes trends in managerial accounting. D - 2, E - 9 A note about the correlation between CPA competencies and the end - of - chapter exercises and problems. The CPA competencies are divided into enabling competencies and terminal competencies. Unless otherwise specified, the terminal competency being tested by the end - of - chapter material in this course is cpa - t003 (Management Accounting). The enabling competency being tested will differ between qu estions. The following questions test enabling competency cpa - e001 Professional and Ethical Behaviour : E1.4,C1.11

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    Managerial Accounting: Tools for Business Decision - Making, Fifth Canadian Edition Weygandt, Kimmel, Kieso, Aly 1 - 3 SOLUTIONS TO DO IT! REVIEW DO IT! REVIEW 1. 1 1. False. Preparation of budgets is part of managerial accounting . 2. False. Financial accounting reports pertain to the entity as a whole and are highly aggregated. It is managerial accounting reports that pertain to subunits of the business and are very detailed. 3 . False. Financial accounting must adhere to g enerally a ccepted a ccounting p rinciples and are subject to an audit by chartered professional accountants. 4 . True. 5 . True. 6 . True . DO IT! REVIEW 1. 2 1. (f) Just - in - time (JIT) inventory 2. (a) Activity - based costing (ABC) 3 . (c) Total quality management (TQM) 4 . (d) Research and development, and product design 5 . (e) Service industries 6 . (b) Balanced scorecard

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    Managerial Accounting: Tools for Business Decision - Making, Fifth Canadian Edition Weygandt, Kimmel, Kieso, Aly 1 - 4 SOLUTIONS TO EXERCISES EXERCISE 1. 3 Financial Accounting Managerial Accounting Primary users External users Internal users Types of reports Financial statements Internal reports Frequency of reports Q uarterly and annually As frequently as needed Purpose of reports General - purpose Special - purpose for specific decisions Content of reports Highly aggregated Generally accepted accounting principles Very detailed Relevance to decisions Verification Annual audit by CPA (c hartered professional a ccountant ) No independent audits EXERCISE 1. 4 The four specific standards are: (1) Competence (2) Confidentiality (3) Integrity (4) Credibility EXERCISE 1. 5 (a) (1) Planning (b) (2) Directing (c) (3) Controlling

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    Managerial Accounting: Tools for Business Decision - Making, Fifth Canadian Edition Weygandt, Kimmel, Kieso, Aly 1 - 5 SOLUTIONS TO EXERCISES (Continued) EXERCISE 1. 6 (a) (6) Chief executive officer (b) (5) Line position (c) (2) Chief financial officer (d) (1) Board of directors (e) (7) Staff position (f) (4) Controller (g) (3) Treasurer EXERCISE 1. 7 1. F 6. M 2. M 7. F 3. F 8. F 4. M 9. M 5. F 10. F EXERCISE 1. 8 1. False. Financial accounting focuses on providing information to external users. 2. True. 3. False. Preparation of budgets is part of managerial accounting . 4. False. Managerial accounting applies to service , merchandising , and manufacturing companies. 5. True. 6. False. Managerial accounting reports are prepared as frequently as needed . 7. True. 8. True. 9. False. Financial accounting reports must comply with g enerally a ccepted a ccounting p rinciples. 10. False. Managerial accountants are expected to behave ethically, and there is a code of ethical standards for managerial accountants.

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    Managerial Accounting: Tools for Business Decision - Making, Fifth Canadian Edition Weygandt, Kimmel, Kieso, Aly 1 - 6 SOLUTIONS TO EXERCISES (Continued) EXERCISE 1. 9 (a) 3. Balanced scorecard (b) 4. Value chain (c) 2. Just - in - time inventory (d) 1. Activity - based costing

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    Managerial Accounting: Tools for Business Decision - Making, Fifth Canadian Edition Weygandt, Kimmel, Kieso, Aly 1 - 7 SOLUTIONS TO CASES CASE 1. 10 Since the questions were fairly open - ended, the following are only suggested results. The class may be able to think of others, or of more items for each one. (a) H ayley Geagea Needs information on sales, perhaps by salesperson and by territory Luc Lemieux Needs cost information for his department Gary Richardson Needs all accounting information Manny Cordoza Needs product cost information Patrick Dumoulin Needs information on component costs and costs for his department (b) Hayley Geagea Income statement Luc Lemieux Specialized cost reports Gary Richardson All Manny Cordoza Income statement and cost of goods manufactured schedule Patrick Dumoulin Specialized cost reports (c) Hayley Geagea Sales by t erritory — Detailed information, possibly by product line, issued daily or weekly Luc Lemieux Cost of c omputer p rograms — Accumulated cost incurred for each major program used including maintenance and updates of program, issued monthly Gary Richardson Cost of p reparing r eports — Detailed analysis of all reports provided, their frequency, time, and estimated cost to prepare, issued monthly Manny Cordoza Cost of p roduct — Detailed cost by product line, comparing actual with estimated costs , i ssued as each batch of production is completed Patrick Dumoulin Cost of p roduct d esign — Accumulated total costs of each new product, issued at end of each project

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    Managerial Accounting: Tools for Business Decision - Making, Fifth Canadian Edition Weygandt, Kimmel, Kieso, Aly 1 - 8 SOLUTIONS TO CASES (Continued) CASE 1. 11 (1) It is ethical to use different performance measures to evaluate employees, if and only if, the performance that is being measured is performance that is under the direct control or responsibility of the individual being evaluated. This is not as much an ethics problem as it is a management problem — management is responsible for putting systems in place that are fair to all employees. (2) First, a company can establish a c ode of c onduct that provides guidelines to employees who are unsure of what should be done in questionable situations. Second, a company can practise transparent reporting — allow all employees to see the financial statements, and encourage them to question what they do not understand, or what they think might not be right.

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    Managerial Accounting: Tools for Business Decision - Making, Fifth Canadian Edition Weygandt, Kimmel, Kieso, Aly 1 - 9 SOLUTION TO “ALL ABOUT YOU” ACTIVITY CASE 1. 12 Student responses will vary, especially since this is Chapter 1 and they will not have been introduced to more sophisticated accounting and business concepts. We have provided some examples that may represent common responses. (a) Students can look in the companies’ annual reports’ financial statements to see amounts of net income. (b) Students can look up online the relative cost of living, average housing and rent prices, public transit rates , and other costs for each city. (c) Students can look in the companies’ annual reports to see how many years they have been in business, whether profitability has been rising or falling, and management’s discussion of its expectations for the future. They can also look up online to see what the companies’ share prices have been over time. (d) Students can look in the companies’ annual reports, websites, and news releases to see the size of their workforce and whether there have been any recent increases or decreases in staffing levels.

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    Managerial Accounting: Tools for Business Decision - Making, Fifth Canadian Edition Weygandt, Kimmel, Kieso, Aly 1 - 10 SOLUTION TO DECISION - MAKING AT CURRENT DESIGNS DM1. 1 The answers to parts (a) and (b) may vary from student to student. (a) Mike Cichanowski, CEO, needs to know the overall financial picture of the company. He also needs to have a general picture of sales by territory and product line, and of cost per unit by product line. Diane Buswell, Controller, needs all accounting - related information. Deb Welch, Purchasing Manager, needs to know the costs of the components for each product. Bill Johnson, Sales Manager, needs to know sales by territory and product line. Dave Thill, Kayak Plant Manager, needs to know all the costs of producing each type of kayak. Rick Thrune, Production Manager for Composite Kayaks, needs to know the costs related to the composite kayak production.

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    Managerial Accounting: Tools for Business Decision - Making, Fifth Canadian Edition Weygandt, Kimmel, Kieso, Aly 1 - 11 DM1. 1 (Continued) (b) Manager Name of report Information report would contain How frequently should it be issued? Mike Cichanowski Analysis of proposed new product line Projected revenues and expenses for a possible new product line As needed and requested Diane Buswell Company - wide budget analysis Revenues, expenses, and net income compared to the budgeted amounts for each Monthly Deb Welch Purchasing History List of items purchased and most recent cost for each item Monthly or available on - line Bill Johnson Sales Summary Sales by product line and by customer Monthly or weekly Dave Thill Cost of Production Report Direct materials, direct labour , and manufacturing overhead costs assigned to each product line Monthly or weekly Rick Thrune Cost of Production Report for Composite Kayaks Detailed direct material s, direct labour, and manufacturing overhead costs for the composite kayaks Weekly

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    Managerial Accounting: Tools for Business Decision - Making, Fifth Canadian Edition Weygandt, Kimmel, Kieso, Aly 1 - 12

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    2 - 1 CHAPTER 2 ASSIGNMENT CLASSIFICATION TABLE Study Objectives Self - Study Questions Brief Exercises Do It! Review Exercises Problems 1. Define the three classes of manufacturing costs and differentiate between product and period costs. 5, 6, 7, 8 1, 2, 3, 9, 11 14 18, 19, 20, 21, 22, 29, 35 40A, 41A, 45A, 48A, 49B, 50B, 53B, 2. Explain variable, fixed, and mixed costs and the relevant range. 1, 2 4, 5 15 23, 24 , 26, 28 47A, 55B 3. Apply the high - low method to determine the components of mixed costs. 3, 4 4, 6, 7, 8 16 25, 27 4. Demonstrate how to calculate cost of goods manufactured and prepare financial statements for a manufacturer. 9, 10 10, 12, 13 17 30, 31, 32, 33, 34, 35, 36, 37, 38, 39 42A, 43A, 44A, 45A, 46A, 48A, 51B, 52B, 53B, 54B, 56B, 57B, 58B

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    2 - 2 ASSIGNMENT CHARACTERISTICS TABLE Problem Number Description Difficulty Level Time Allotted (min.) 40A Classify manufacturing costs into different categories and calculate the unit cost. Simple 20 – 30 41A Classify manufacturing costs into different categories and calculate the unit cost. Simple 20 – 30 42A Indicate the missing amount of different cost items, and prepare a condensed cost of goods manufactured schedule , an income statement, and a partial balance sheet. Moderate 30 – 40 43A Prepare a cost of goods manufactured schedule, a partial income statement, and a partial balance sheet. Moderate 30 – 40 44A Prepare a cost of goods manufactured schedule and a correct income statement . Moderate 30 – 40 45A Calculate cost of goods manufactured , and cost of goods sold. Moderate 20 – 30 46A Calculate raw materials purchased, cost of goods manufactured, and cost of goods sold. Moderate 20 – 30 47A Determine missing amounts in the cost of goods manufactured and sold schedule and compare fixed and variable costs. Challenging 30 – 40 48A Determine missing amounts and calculate selected costs for schedules of cost of goods manufactured and sold. Challenging 30 – 40 49B Classify manufacturing costs into different categories and calculate the unit cost. Simple 20 – 30 50B Classify manufacturing costs into different categories and calculate the unit cost. Simple 20 – 30 51B Indicate the missing amount of different cost items, and prepare a condensed cost of goods manufactured schedule , an income statement, and a partial balance sheet. Moderate 30 – 40 52B Prepare a cost of goods manufactured schedule, a partial income statement, and a partial balance sheet. Moderate 30 – 40

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    2 - 3 ASSIGNMENT CHARACTERISTICS TABLE (Continued) Problem Number Description Difficulty Level Time Allotted (min.) 53B Calculate prime cost, conversion cost and cost of goods manufactured. Moderate 20 – 30 54B Prepare income statement schedules for cost of goods sold and cost of goods manufactured. Moderate 30 – 40 55B Determine missing amounts in the cost of goods manufactured and sold schedule and compare fixed and variable costs. Challenging 20 – 30 56B Prepare a cost of goods manufactured schedule and a correct income statement . Moderate 30 – 40 57B Calculate selected costs for the income statement, and schedules of cost of goods manufactured and sold. Moderate 20 – 30 58B Determine missing amounts, prepare cost of goods manufactured and calculate inventory values. Challenging 40 – 50

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