Chapter 13 Managerial Accounting Solutions

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Volume 1: The Transportation Services Cost Sharing Toolkit leads the user through the process of setting up the necessary cost accounting system, identifying the data requirements and the measurement parameters, and describing procedures for applying the model. This volume concludes with instructions for using the actual Cost Sharing Model.

Volume 2: The Research Report summarizes all of the study components that contributed to formation of the Toolkit. It includes an extended evaluation of current experience and describes the regulatory environment that frames transportation service delivery requirements.

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We wrote this book to satisfy the needs of students taking an introductory course in financial and managerial accounting by providing a high quality, contemporary, and engaging textbook at an affordable price. Financial & Managerial Accounting for Undergraduates is written for students who want to understand how financial statements are prepared and how the information in published financial reports is used. It will also introduce students to management accounting concepts and decision making tools that will help them become effective managers in an increasingly competitive global market. The publication of this text has benefited from extensive feedback and suggestions from focus groups, market surveys, manuscript reviews, and interviews with faculty from across the country.

Financial & Managerial Accounting for Undergraduates is intended for use in the financial and managerial accounting courses at the undergraduate level; courses that balance the development of financial statements and management accounting tools with their interpretation and use in decision making. This book teaches students how to read, analyze, and interpret financial and managerial accounting data to make informed business decisions.

We believe students become more engaged in the course when they see how the content pertains to their future careers. Once engaged in the course, students perform much better and enjoy the class more. Furthermore, we believe accounting is a discipline best learned by doing. Unlike some other disciplines, accounting needs to be practiced. Consequently, we took great care to incorporate a number of pedagogical devices and real examples that illustrate the relevance of financial and managerial accounting to professional careers.

Students frequently ask this or similar questions. The extent to which they feel accounting is relevant to their daily lives will often determine how much effort they put into the course. The following features are used throughout the book to convey the relevance of accounting to their lives and society.

The managerial accounting chapters of the text also incorporate a wide range of examples using real companies such as Microsoft, Amazon and Google. The Service Industry in Focus section in the assignments of each managerial accounting chapter requires the students to use the financial and operational data of a fictitious consulting company, Environmental Business Consultants, LLC, to address real business issues. Most managerial accounting chapters also include real-world examples from Fezzari, a custom bike manufacturer.

These boxed inserts help bridge the gap between the classroom and what students encounter in the real world. Accounting In Practice illustrations document situations a reader is likely to encounter and present the choices that companies face in reporting financial results and making decisions.

Enron, WorldCom, Waste Management, Bernie Madoff, and other high-profile incidents of fraud highlight the consequences of unethical decisions made by real people facing difficult challenges in businesses today. Although most students will not face such significant decisions, they will certainly be confronted with day-to-day decisions that have ethical implications and could lead to more serious challenges. For example, students may be tempted to inflate chargeable hours when performance evaluations and bonuses are based on achieving a target level of chargeability. We discuss ethics where appropriate in the textbook, including an assignment in most chapters that raises an ethical issue. Assignments involving ethics are identified by the icon in the margin.

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Many undergraduate managerial accounting textbooks focus primarily on calculations and formulas and how to apply these accounting skills in a manufacturing environment. However, business professionals must be able to apply their technical accounting knowledge and expertise in a broader context in making good business decisions. Moreover, because the U.S. market is increasingly service oriented, professionals must develop experience in applying these skills to decision making in a service environment. Having spent several years supplementing existing textbook problems with more real-world and service industry examples, we saw a need for a new approach. Hence, we focus on helping students to (1) develop strong analytical skills and (2) apply them in realistic decision-making contexts. Finally, we have written the book with a heavy emphasis on managerial decisions in service and merchandising enterprises.

We believe students become more engaged in the course when they see how the course content pertains to their future careers. Once engaged in the course, students perform much better and enjoy the class more. Furthermore, we believe accounting is a discipline best learned by doing. Unlike some other disciplines, accounting needs to be practiced. Consequently, we have taken great care to incorporate a number of pedagogical devices and real company examples that illustrate the relevance of managerial accounting to professional careers.

Business professionals know that the economy has changed dramatically over the last two decades and that the demands placed on professionals now require an understanding of broad business disciplines, including finance, marketing, organizational behavior, supply chain management, operations management, and strategy. By exposing students to real-world companies and the challenges that they face, they can begin to understand the need to integrate accounting information with other business information in making good decisions.

One of the authors is a former founder, owner, and chief financial officer of a very successful regional consulting firm, HFH Consultants, LLC. The author was intimately involved in the strategy, marketing, human resource management, finance, and accounting of this service firm from its founding with three partners and a secretary to its growth to include four offices, approximately two dozen professionals and staff, and over $3.5 million in annual revenue. His extensive experience managing this firm for 14 years is reflected throughout the textbook in the form of a continuous problem based on a fictitious service firm. This practical experience is also reflected in other real-world examples and problems based on real companies.

Students are more likely to engage in the learning process and retain the concepts taught if the examples used are real companies with which they are familiar. Throughout the textbook, we incorporate a wide range of examples using real companies such as Microsoft, Amazon, Google, and Waste Management. In addition, the Service Industry in Focus section in the assignments of each chapter requires the students to use the financial and operational data of a fictitious consulting company, Environmental Business Consultants, LLC, to address real business issues.

these boxed inserts help students bridge the gap between the classroom and what students encounter in the real world. Accounting in Practice illustrations document situations a student will likely encounter and present choices that companies face in making decisions.

tThe service sector is the fastest growing segment of the U.S. economy. The Service Industry in Focus inserts help students understand how managerial accounting is applied to improve the competitiveness of service companies.

Often, companies are faced with a choice among alternative courses of action where the correct choice is not apparent. The decision time inserts help students look beyond the accounting numbers to see the importance of other business information in making the best decision.

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