Chapter 1 Managerial Accounting, the Business Organization, and Professional Ethics

7756 Words Feb 19th, 2013 32 Pages
CHAPTER 1
COVERAGE OF LEARNING OBJECTIVES

| |FUNDA- |CRITICAL THINKING | |CASES, EXCEL, |
| |MENTAL |EXERCISES AND EXERCISES| |COLLAB., & INTERNET |
| |ASSIGN-MENT | | |EXERCISES |
| |MATERIAL | | | |
|LEARNING OBJECTIVE | | |PROBLEMS
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4. Attention directing. Focuses attention on areas that need attention.
5. Attention directing. Helps managers learn about the information contained in a performance report.
6. Scorekeeping. The statement merely reports what has happened.
7. Problem solving. The cost comparison is apparently useful because the manager wishes to decide between two alternatives. Thus, it aids problem solving.
8. Attention directing. Variances point out areas where results differ from expectations. Interpreting them directs attention to possible causes of the differences.
9. Problem solving. Aids a decision about where the parts should be made.
10. Attention directing and problem solving. Budgeting involves making decisions about planned activities -- hence, aiding problem solving. Budgets also direct attention to areas of opportunity or concern --hence, directing attention. Reporting against the budget also has a scorekeeping dimension. 1-A2 (15-20 min.)

1. Budgeted Actual Deviations Amounts Amounts or Variances Room rental $ 140 $ 140 $ 0 Food 700 905 205U Entertainment 600 600 0 Decorations 220 190 30F Total $1,660 $1,835 $175U

2. Because of the management by exception rule, room rental and entertainment require no explanation. The actual expenditure for food exceeded the budget by $205. Of this $205, $150 is explained by

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