Managerial Accounting Tools for Business Decision Making
SOLUTION MANUAL
Managerial Accounting Tools for Business Decision Making
9th Edition by Jerry J. Weygandt, Paul D. Kimmel
Chapters 1 - 14, Complete
,TABLE OF CONTENTS
Chapter 1: Managerial Accounting
Chapter 2: Job Order Costing
Chapter 2A: Job Order Costing: Non-Debit and Credit Approach
Chapter 3: Process Costing
Chapter 3A: Process Costing: Non-Debit and Credit Approach
Chapter 4: Activity-Based Costing
Chapter 5: Cost-Volume-Profit
Chapter 6: Cost-Volume-Profit Analysis: Additional Issues
Chapter 7: Incremental Analysis
Chapter 8: Pricing
Chapter 9: Budgetary Planning
Chapter 10: Budgetary Control and Responsibility Accounting
Chapter 11: Standard Costs and Balanced Scorecard
Chapter 12: Planning for Capital Investments
Chapter 13: Statement of Cash Flows
Chapter 14: Financial Analysis
, Managerial Accounting Tools for Business Decision Making
CHAPTER 1
Managerial Accounting
Learning Objectives
1. Identify the features of managerial accounting and the functions of management.
2. Describe the classes of manufacturing costs and the differences between product and period
costs.
3. Demonstrate how to compute cost of goods manufactured and prepare financial statements for a
manufacturer.
4. Discuss trends in managerial accounting.
ANSWERS TO QUESTIONS
1. (a) Not true. Managerial accounting is a field of accounting that provides economic and financial
information for managers and other internal users.
(b) Joe is incorrect. Managerial accounting applies to all types of businesses—service,
merchandising, and manufacturing.
LO1 BT: C Difficulty: Easy TOT: 3 min. AACSB: None AICPA FC: Measurement, Analysis and Interpretation IMA: Cost Management
2. (a) Financial accounting is concerned primarily with external users such as stockholders, creditors,
and regulators. In contrast, managerial accounting is concerned primarily with internal users
such as officers and managers.
(b) Financial statements are the end product of financial accounting. These statements are
prepared quarterly and annually. In managerial accounting, internal reports may be
prepared as frequently as needed.
(c) The purpose of financial accounting is to provide general-purpose information for external
users. The purpose of managerial accounting is to provide special-purpose information for
specific internal decisions.
LO1 BT: C Difficulty: Easy TOT: 5 min. AACSB: None AICPA FC: Measurement, Analysis and Interpretation IMA: Cost Management
3. Differences in the content of the reports are as follows:
Financial Managerial
• Pertains to business as a whole and ishighly • Pertains to subunits of the business and
aggregated. may be very detailed.
• Limited to accrual accounting and cost data. • Extends beyond accrual accounting
• Generally accepted accounting principles. system to any relevant data.
Copyright © 2021 John Wiley & Sons, Inc. Weygandt, Managerial Accounting, 9e, Solutions Manual (For Instructor Use Only) 1-1
, • Standard is relevance to decisions.
In / i financial / i accounting, / i financial / i statements / i are / i verified / i annually / i through / i an
/ i independent / i audit / i by / i certified / i public / i accountants. / i There / i are / i no / i independent / i audits / i of
/ i internal / i reports / i prepared / i by / i managerial/iaccountants.
LO1 / i BT: /iC / i Difficulty: /iEasy / i TOT: /i5 /i min. /i /iAACSB: /iNone / i AICPA / i FC: /iMeasurement, /iAnalysis /i and /iInterpretation / i IMA: /iCost
/iManagement
4. Linda /ishould /iknow /ithat /ithe /imanagement /iof /ian /iorganization /iperforms /ithree /ibroad /ifunctions:
(1) Planning /irequires /imanagement /ito /ilook /iahead /iand /ito /iestablish /iobjectives.
(2) Directing /iinvolves /i coordinating /i the /idiverse /iactivities /iand /ihuman /iresources /iof /i a
company /ito / i produce /ia /ismooth-running /ioperation.
/i
(3) Controlling /iis /ithe /iprocess /iof /ikeeping /ithe /icompany’s /iactivities /ion /itrack.
LO1 / i BT: /iC / i Difficulty: /iEasy / i TOT: /i3 /i min. /i /iAACSB: /iNone / i AICPA / i FC: /iMeasurement, /iAnalysis /i and /iInterpretation / i IMA: /iCost
/iManagement
5. Not /itrue. /iDecision-making /iis /inot /ia /iseparate /imanagement /i function. /i Rather, /idecision-making
/ i involves / i the / i exercise / i of / i good / i judgment / i in / i performing / i the / i three / i management
/ i functions / i explained / i in / i the / i answer /ito /iquestion /ifour /iabove.
LO1 / i BT: /iC / i Difficulty: /iEasy / i TOT: /i2 /i min. /i /iAACSB: /iNone / i AICPA /i FC: /iMeasurement, /iAnalysis /i and /iInterpretation /i IMA: /iCost
/iManagement
6. Employees / i with / i line / i positions / i are / i directly / i involved / i in / i the / i company’s / i primary / i revenue
/ i generating / i operating / i activities. / i Examples / i would / i include / i factory / i managers / i and
/ i supervisors, / i and / i the / i vice / i president / i of / i operations. / i In / i contrast, / i employees / i with
/ i staff / i positions / i are / i not / i directly / i involved / i in / i revenue-generating / i operating / i activities,
/i but / i rather /i serve / i in / i a / i support / i capacity / i to / i line / i employees. / i Examples /iinclude /iemployees /iin
/ifinance, /ilegal, /iand /ihuman /iresources.
LO1 / i BT: /iC / i Difficulty: /iEasy /i TOT: /i3 /imin. /iAACSB: /iNone / i AICPA /iFC: /i Measurement, /iAnalysis /i and /iInterpretation /i /i IMA: /iCost
/iManagement
Questions /iChapter /i1 /i(Continued)
7. The / i difference / i in / i balance / i sheets / i pertains / i to / i the / i presentation / i of / i inventories / i in / i the
/ i current / i asset / i section. / i In / i a / i merchandising / i company, / i only / i inventory / i is / i shown. / i In / i a
/ i manufacturing / i company, / i three / i inventory /iaccounts /iare /ishown: /ifinished /igoods, /iwork /iin /iprocess,
/iand /iraw /imaterials.
LO3 / i BT: /iC / i Difficulty: /iEasy / i TOT: /i2 /imin. /i /iAACSB: /iNone / i AICPA / i FC: /iMeasurement, /iAnalysis /i and /iInterpretation / i IMA: /iCost
/imanagement
8. Manufacturing /i costs /iare /iclassified /i as /i either /idirect /i materials, /idirect / i labor, /ior / i manufacturing
/ i overhead.
LO2 / i BT: /iC / i Difficulty: /iEasy / i TOT: /i1 /imin. /i /iAACSB: /iNone / i AICPA / i FC: /iMeasurement, /iAnalysis /i and /iInterpretation / i IMA: /iCost
/imanagement
9. No, /iMel /iis /inot /icorrect. /iThe /idistinction /ibetween /idirect /iand /iindirect /imaterials /iis/ibased /ion /itwo /icriteria:
(1) physical / i association / i and / i (2) / i the / i convenience / i of / i making / i the / i physical / i association.
/ i Materials / i which /icannot /ibe /ieasily /iassociated /iwith /ithe /ifinished /iproduct /iare /iconsidered /iindirect
/imaterials.
LO2 / i BT: /iC / i Difficulty: /iEasy / i TOT: /i2 /imin. /i /iAACSB: /iNone / i AICPA / i FC: /iMeasurement, /iAnalysis /i and /iInterpretation / i IMA: /iCost
/imanagement
10. Product /icosts, /ior /iinventoriable /icosts, /iare /icosts /ithat /iare /ia /inecessary /iand /iintegral /ipart / i of
/iproducing / i the / i finished / i product, / i they / i are / i classified / i as / i manufacturing / i costs. / i Period
/ i costs / i are / i costs / i that / i are / i identified / i with / i a / i specific / i time / i period / i rather / i than / i with
/ i a / i salable / i product. / i These / i costs / i relate / i to / i nonmanufacturing / i activities /iand /itherefore
/iare /inot /i inventoriable /icosts, /ithey / i are /iexpensed / i as / i incurred.
LO2 /iBT: /iK / i Difficulty: /iEasy / i TOT: /i2 /imin. / i AACSB: /iNone / i AICPA / i FC: /iMeasurement, /iAnalysis / i and /iInterpretation /i /i IMA: /iCost
/imanagement
11. A /imerchandising / i company /ithat /iuses /ithe /iperiodic /iinventory /isystem /ireports /ibeginning /iinventory,
/ i cost / i of / i goods /i purchased, / i and / i ending / i inventory / i in / i the / i cost / i of / i goods /i section / i of / i the
/ i income / i statement. / i A / i manufacturing / i company / i reports / i beginning / i finished / i goods / i inventory,
SOLUTION MANUAL
Managerial Accounting Tools for Business Decision Making
9th Edition by Jerry J. Weygandt, Paul D. Kimmel
Chapters 1 - 14, Complete
,TABLE OF CONTENTS
Chapter 1: Managerial Accounting
Chapter 2: Job Order Costing
Chapter 2A: Job Order Costing: Non-Debit and Credit Approach
Chapter 3: Process Costing
Chapter 3A: Process Costing: Non-Debit and Credit Approach
Chapter 4: Activity-Based Costing
Chapter 5: Cost-Volume-Profit
Chapter 6: Cost-Volume-Profit Analysis: Additional Issues
Chapter 7: Incremental Analysis
Chapter 8: Pricing
Chapter 9: Budgetary Planning
Chapter 10: Budgetary Control and Responsibility Accounting
Chapter 11: Standard Costs and Balanced Scorecard
Chapter 12: Planning for Capital Investments
Chapter 13: Statement of Cash Flows
Chapter 14: Financial Analysis
, Managerial Accounting Tools for Business Decision Making
CHAPTER 1
Managerial Accounting
Learning Objectives
1. Identify the features of managerial accounting and the functions of management.
2. Describe the classes of manufacturing costs and the differences between product and period
costs.
3. Demonstrate how to compute cost of goods manufactured and prepare financial statements for a
manufacturer.
4. Discuss trends in managerial accounting.
ANSWERS TO QUESTIONS
1. (a) Not true. Managerial accounting is a field of accounting that provides economic and financial
information for managers and other internal users.
(b) Joe is incorrect. Managerial accounting applies to all types of businesses—service,
merchandising, and manufacturing.
LO1 BT: C Difficulty: Easy TOT: 3 min. AACSB: None AICPA FC: Measurement, Analysis and Interpretation IMA: Cost Management
2. (a) Financial accounting is concerned primarily with external users such as stockholders, creditors,
and regulators. In contrast, managerial accounting is concerned primarily with internal users
such as officers and managers.
(b) Financial statements are the end product of financial accounting. These statements are
prepared quarterly and annually. In managerial accounting, internal reports may be
prepared as frequently as needed.
(c) The purpose of financial accounting is to provide general-purpose information for external
users. The purpose of managerial accounting is to provide special-purpose information for
specific internal decisions.
LO1 BT: C Difficulty: Easy TOT: 5 min. AACSB: None AICPA FC: Measurement, Analysis and Interpretation IMA: Cost Management
3. Differences in the content of the reports are as follows:
Financial Managerial
• Pertains to business as a whole and ishighly • Pertains to subunits of the business and
aggregated. may be very detailed.
• Limited to accrual accounting and cost data. • Extends beyond accrual accounting
• Generally accepted accounting principles. system to any relevant data.
Copyright © 2021 John Wiley & Sons, Inc. Weygandt, Managerial Accounting, 9e, Solutions Manual (For Instructor Use Only) 1-1
, • Standard is relevance to decisions.
In / i financial / i accounting, / i financial / i statements / i are / i verified / i annually / i through / i an
/ i independent / i audit / i by / i certified / i public / i accountants. / i There / i are / i no / i independent / i audits / i of
/ i internal / i reports / i prepared / i by / i managerial/iaccountants.
LO1 / i BT: /iC / i Difficulty: /iEasy / i TOT: /i5 /i min. /i /iAACSB: /iNone / i AICPA / i FC: /iMeasurement, /iAnalysis /i and /iInterpretation / i IMA: /iCost
/iManagement
4. Linda /ishould /iknow /ithat /ithe /imanagement /iof /ian /iorganization /iperforms /ithree /ibroad /ifunctions:
(1) Planning /irequires /imanagement /ito /ilook /iahead /iand /ito /iestablish /iobjectives.
(2) Directing /iinvolves /i coordinating /i the /idiverse /iactivities /iand /ihuman /iresources /iof /i a
company /ito / i produce /ia /ismooth-running /ioperation.
/i
(3) Controlling /iis /ithe /iprocess /iof /ikeeping /ithe /icompany’s /iactivities /ion /itrack.
LO1 / i BT: /iC / i Difficulty: /iEasy / i TOT: /i3 /i min. /i /iAACSB: /iNone / i AICPA / i FC: /iMeasurement, /iAnalysis /i and /iInterpretation / i IMA: /iCost
/iManagement
5. Not /itrue. /iDecision-making /iis /inot /ia /iseparate /imanagement /i function. /i Rather, /idecision-making
/ i involves / i the / i exercise / i of / i good / i judgment / i in / i performing / i the / i three / i management
/ i functions / i explained / i in / i the / i answer /ito /iquestion /ifour /iabove.
LO1 / i BT: /iC / i Difficulty: /iEasy / i TOT: /i2 /i min. /i /iAACSB: /iNone / i AICPA /i FC: /iMeasurement, /iAnalysis /i and /iInterpretation /i IMA: /iCost
/iManagement
6. Employees / i with / i line / i positions / i are / i directly / i involved / i in / i the / i company’s / i primary / i revenue
/ i generating / i operating / i activities. / i Examples / i would / i include / i factory / i managers / i and
/ i supervisors, / i and / i the / i vice / i president / i of / i operations. / i In / i contrast, / i employees / i with
/ i staff / i positions / i are / i not / i directly / i involved / i in / i revenue-generating / i operating / i activities,
/i but / i rather /i serve / i in / i a / i support / i capacity / i to / i line / i employees. / i Examples /iinclude /iemployees /iin
/ifinance, /ilegal, /iand /ihuman /iresources.
LO1 / i BT: /iC / i Difficulty: /iEasy /i TOT: /i3 /imin. /iAACSB: /iNone / i AICPA /iFC: /i Measurement, /iAnalysis /i and /iInterpretation /i /i IMA: /iCost
/iManagement
Questions /iChapter /i1 /i(Continued)
7. The / i difference / i in / i balance / i sheets / i pertains / i to / i the / i presentation / i of / i inventories / i in / i the
/ i current / i asset / i section. / i In / i a / i merchandising / i company, / i only / i inventory / i is / i shown. / i In / i a
/ i manufacturing / i company, / i three / i inventory /iaccounts /iare /ishown: /ifinished /igoods, /iwork /iin /iprocess,
/iand /iraw /imaterials.
LO3 / i BT: /iC / i Difficulty: /iEasy / i TOT: /i2 /imin. /i /iAACSB: /iNone / i AICPA / i FC: /iMeasurement, /iAnalysis /i and /iInterpretation / i IMA: /iCost
/imanagement
8. Manufacturing /i costs /iare /iclassified /i as /i either /idirect /i materials, /idirect / i labor, /ior / i manufacturing
/ i overhead.
LO2 / i BT: /iC / i Difficulty: /iEasy / i TOT: /i1 /imin. /i /iAACSB: /iNone / i AICPA / i FC: /iMeasurement, /iAnalysis /i and /iInterpretation / i IMA: /iCost
/imanagement
9. No, /iMel /iis /inot /icorrect. /iThe /idistinction /ibetween /idirect /iand /iindirect /imaterials /iis/ibased /ion /itwo /icriteria:
(1) physical / i association / i and / i (2) / i the / i convenience / i of / i making / i the / i physical / i association.
/ i Materials / i which /icannot /ibe /ieasily /iassociated /iwith /ithe /ifinished /iproduct /iare /iconsidered /iindirect
/imaterials.
LO2 / i BT: /iC / i Difficulty: /iEasy / i TOT: /i2 /imin. /i /iAACSB: /iNone / i AICPA / i FC: /iMeasurement, /iAnalysis /i and /iInterpretation / i IMA: /iCost
/imanagement
10. Product /icosts, /ior /iinventoriable /icosts, /iare /icosts /ithat /iare /ia /inecessary /iand /iintegral /ipart / i of
/iproducing / i the / i finished / i product, / i they / i are / i classified / i as / i manufacturing / i costs. / i Period
/ i costs / i are / i costs / i that / i are / i identified / i with / i a / i specific / i time / i period / i rather / i than / i with
/ i a / i salable / i product. / i These / i costs / i relate / i to / i nonmanufacturing / i activities /iand /itherefore
/iare /inot /i inventoriable /icosts, /ithey / i are /iexpensed / i as / i incurred.
LO2 /iBT: /iK / i Difficulty: /iEasy / i TOT: /i2 /imin. / i AACSB: /iNone / i AICPA / i FC: /iMeasurement, /iAnalysis / i and /iInterpretation /i /i IMA: /iCost
/imanagement
11. A /imerchandising / i company /ithat /iuses /ithe /iperiodic /iinventory /isystem /ireports /ibeginning /iinventory,
/ i cost / i of / i goods /i purchased, / i and / i ending / i inventory / i in / i the / i cost / i of / i goods /i section / i of / i the
/ i income / i statement. / i A / i manufacturing / i company / i reports / i beginning / i finished / i goods / i inventory,
