Cost Accounting With

Cost Accounting With Integrated Data Analytics, 1e Karen Congo Farmer, Amy Fredin (Solutions Manual All Chapter)

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1-1 © 2022 John Wiley & Sons, Inc. or the author, All rights reserved. Farmer, Cost Accounting, 1e, Job Costing Visualized (For Instructor Use Only) Chapter 1

Cost Accounting Has Purpose

Note: the end of chapter brief exercises, exercises, and problems are coded K (knowledge), C (comprehension), AP (application), AN (analysis), S (synthesize), and E (evaluation) according to the original Blooms Taxonomy published in 1956.

Assignment Classification Table (By Learning Objective)

Learning Objectives Questions Brief Exercises Exercises Problems

• Explore the elements that

support a company’s purpose, as well as your own.

1, 2, 3, 4 1, 2, 3, 4, 5,

6

1, 2, 3 1, 2, 3, 4

• Connect the purpose of cost

accounting with the role of accountants in organizations.

5, 6, 7 7, 8, 9 4, 5, 6 5, 6

• Outline the frameworks,

including ethics, that guide the profession.

8, 9, 10, 11,

12

10, 11, 12 7, 8, 9,

10

7, 8, 9 2 / 4

1-2 © 2022 John Wiley & Sons, Inc. or the author, All rights reserved. Farmer, Cost Accounting, 1e, Job Costing Visualized (For Instructor Use Only) Assignment Characteristics Table Item

Description Level of Difficulty Time (minutes) E1.1 Get to know the mission and vision of each of the Big 4 firms and their underlying values.Moderate 10–15 E1.2 Evaluate the state of competition within an industry given a company’s SWOT analysis.Moderate 10–15 E1.3 Explain how a balanced scorecard reveals a company’s strategy.Moderate 10–15 E1.4 Get to know how cost accounting skill sets are valued as consulting services in the Big 4.Moderate 10–15 E1.5 Use the decision-making framework to make a personal decision.Moderate 10–15 E1.6 Use the decision-making framework to make a business decision.Simple 10–15 E1.7 Get to know the IMA. Simple 5–10 E1.8 Get to know the continuing education requirements for IMA’s flagship certification.Moderate 10–15 E1.9 Get to know IMA’s Statement of Ethical Professional Practice.Moderate 15–20 E1.10 Get to know the AICPA.Simple 5–10 P1.1 What is your own personal purpose? Simple 5–10 P1.2 What are your goals in this course? Simple 5–10 P1.3 What strategies will you use to achieve your course goals?Simple 10–15 P1.4 Conduct your own personal SWOT analysis related to your role as a student.Moderate 10–15 P1.5 Determine which data analytics approaches would be useful in addressing a business question.Moderate 10–15 P1.6 Explain the steps in the value chain. Moderate 5–10 P1.7 Get to know IMA’s Statements on Management Accounting.Moderate 10–15 P1.8 Get to know the CPE requirements for CPAs in your state.Moderate 10–15 P1.9 Get to know how NASBA supports the State Boards of Accountancy.

Moderate 15–20 Case Sort out the issues in an ethical dilemma using IMA’s Statement of Ethical Professional Practice alongside the decision-making framework.Moderate 10–15 3 / 4

1-3 © 2022 John Wiley & Sons, Inc. or the author, All rights reserved. Farmer, Cost Accounting, 1e, Job Costing Visualized (For Instructor Use Only) Answers to Questions

• A vision reflects what you strive to be (or what an organization strives to be) or what you strive to

achieve by some future date. In contrast, a mission (i.e., a purpose) is the reason you exist (or an organization exists). Your mission, or purpose, is what drives you. A strategy reflects the chosen method(s) and technique(s) to get you to the end goal (the vision). You can think of a vision as being your destination, a mission (i.e., purpose) as your vehicle (what drives you!), and a strategy is the road you take to get there. Being aware of these key pieces as well as how they work together can help you stay motivated and adjust course as needed. By keeping your end goal in mind, you will be more motivated and driven as you travel the road there.

LO: 1, Bloom: C, Difficulty: Simple, Time: 3-5, AACSB: Knowledge, Communication, Reflective Thinking, AICPA BC: N/A, AICPA AC: Reporting, AICPA PC:

Communication, IMA: N/A

• A SWOT analysis is a survey of a company’s internal Strengths and Weaknesses along with its

external Opportunities and Threats. Companies use this type of analysis to evaluate their position in the market so they can work to capitalize on their strengths and address their weaknesses in an effort to take advantage of opportunities in the market while also addressing the threats.In the process of conducting a SWOT analysis, managers often recognize Porter’s Five Forces among the company’s strengths, weaknesses, opportunities, and threats. The five forces are customer power, supplier power, threat of substitute products, threat of new entrants, and industry rivalry.

Through a formal SWOT analysis or a formal evaluation of Porter’s Five Forces, a company will have a very thorough understanding of where it is positioned in the market and in the industry, which can help decision-makers determine the best course forward in order to live the company’s mission and reach its vision.

LO: 1, Bloom: C, Difficulty: Simple, Time: 3-5, AACSB: Knowledge, Communication, AICPA BC: Strategic Perspective, AICPA AC: Reporting, AICPA PC: Communication, IMA: Strategy, Planning, & Performance: Enterprise Risk Management

• A balanced scorecard is a performance management tool in which managers can

comprehensively evaluate their organization’s performance. Within the balanced scorecard, four traditional perspectives are often used (described below). Within each perspective, the company recognizes its key objectives, key initiatives for each objective, and specific metrics for each objective, using both financial and non-financial metrics—hence the term “balanced” scorecard.Targets are specified for each objective, and at the end of the month/quarter/year, managers can compare actual results against the company’s stated objectives and targets. A balanced scorecard can be implemented for the entire entity, for sub-units, and/or for individuals.

The four perspectives of a traditional balanced scorecard include:

• Financial perspective—considers the shareholder’s perspective and how metrics like

growth, profit, and risk that impact shareholder value translate into company objectives.

• Customer perspective—considers the customer and includes the metrics that create value

for the customer, while also often measuring customer satisfaction and retention.

• Internal business process perspective—considers processes internal to a company that are

responsible for creating value for the customer and shareholder.

• Learning and growth perspective—considers how an organization supports its people and

infrastructure to drive and maintain new products and service development and growth.

The objectives within each of the four perspectives should be linked such that improvement in more foundational areas of the scorecard, such as learning and growth or internal business process perspectives, will lead to expected improvement in customer and financial areas, as well.

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