Horngren's Cost Accounting: A Managerial Emphasis, 16th Edition Solution Manual

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TABLE OF CONTENTS

Preface iv

Dedication ........................................................................................................................................v

Supplements Available for 16th Edition vi

Alternative Suggested Chapter Sequences viii

Categorization of Assignment Material xii

Presentation of Solutions xxviii

Major Changes in Text for the 16th Edition xxix

Changes in Assignment Material for the 16th Edition xxxv

Chapter Solutions

1 The Manager and Management Accounting 1-1

2 An Introduction to Cost Terms and Purposes 2-1

3 Cost-Volume-Profit Analysis 3-1

4 Job Costing 4-1

5 Activity-Based Costing and Activity-Based Management 5-1

6 Master Budget and Responsibility Accounting 6-1

7 Flexible Budgets, Direct-Cost Variances, and Management Control 7-1

8 Flexible Budgets, Overhead Cost Variances, and Management Control 8-1

9 Inventory Costing and Capacity Analysis 9-1

10 Determining How Costs Behave 10-1

11 Decision Making and Relevant Information 11-1

12 Strategy, Balanced Scorecard, and Strategic Profitability Analysis 12-1

13 Pricing Decisions and Cost Management 13-1

14 Cost Allocation, Customer-Profitability Analysis, and Sales-Variance Analysis 14-1

15 Allocation of Support-Department Costs, Common Costs, and Revenues 15-1

16 Cost Allocation: Joint Products and Byproducts 16-1

17 Process Costing 17-1

18 Spoilage, Rework, and Scrap 18-1

19 Balanced Scorecard: Quality, Time, and the Theory of Constraints 19-1

20 Inventory Management, Just-in-Time, and Simplified Costing Methods 20-1

21 Capital Budgeting and Cost Analysis 21-1

22 Management Control Systems, Transfer Pricing, and Multinational Considerations 22-1

23 Performance Measurement, Compensation, and Multinational Considerations 23-1
vi
ALTERNATIVE SUGGESTED CHAPTER SEQUENCES

The Preface to Cost Accounting noted that our aim in organizing the material was to present a
modular, flexible organization that permits a course to be custom tailored. This section presents
six possible sequences for a first course in cost accounting. For each of these six sequences, we
also present the sequence of a second course that would result in coverage of many or all of the
topics in Cost Accounting. Outlines IV all include Chapters 1 to 9 in varying orders of
sequence. Outline VI has a strong (almost exclusive) focus on the decision making role of cost
accounting.

We analyzed the sequences of chapters assigned by many users of the 15th edition. Although
many instructors tended to follow the sequence in the text, other instructors tailored sequences to
fit their particular desires. These tailored sequences varied considerably. By far the most popular
departure was to assign the chapter on process costing (Chapter 17) immediately after the
coverage of job costing (Chapter 4) and activity-based costing (Chapter 5). The next most
popular departure was to assign Chapter 10 after Chapter 2 or 3. All the accompanying
alternative assignment schedules have an optional provision to facilitate tailoring a course.
Obviously, instructors should alter any suggested sequence to suit their preferences.

OUTLINE I: This basic course provides a balance of topics between the major purposes of cost
accounting:

1. Calculating the cost of products, services, and other cost objects

2. Obtaining information for planning and control and performance evaluation

3. Analyzing relevant information for making decisions

Finishing the first course with Chapters 11 and 13 means that topics with less procedural
emphasis are highlighted in the last weeks of the course; these two chapters also introduce topics
covered in more detail in a second course. Some instructors may assign Chapter 10 without using
the Appendix on “Regression Analysis,” preferring to delay use of the Appendix until the second
course (especially if many students have not been exposed to regression analysis at the time of
the basic course).

OUTLINE II: This basic course covers the same chapters as Outline I but assigns Chapter 10
(Determining How Costs Behaves) immediately after Chapter 3 (Cost Volume-Profit Analysis).
It also assigns Chapter 12 on Strategy, Balanced Scorecard, and Strategic Profitability Analysis.
This first part of the second course emphasizes cost management and performance evaluation
before covering the six chapters (1420) on cost allocation and other aspects of costing systems.

OUTLINE III: After covering Chapters 1 to 9 and 11 in the basic course, this sequence finishes
with a chapter on strategic issues (Chapter 12) and two chapters on cost allocation topics
(Chapters 14 and 15). Some instructors view it as important that students who take only one cost
accounting course become aware of how pervasive cost allocation issues are in practice.

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