Solution Manual for Managerial Accounting,
fd fd fd fd
18th Edition fd
By Ray Garrison, Eric Noreen and Peter
fd fd fd fd fd fd
Brewer fd
Verified Chapter's 1 - 16 | Complete
fd fd fd fd fd fd
,Table of Contents
fd fd
Chapter fdOne: fdManagerial fdAccounting fdand fdCost fdConcepts
Chapter fdTwo: fdJob-Order fdCosting: fdCalculating fdUnit fdProduct fdCosts
Chapter fdThree: fdJob-Order fdCosting: fdCost fdFlows fdand fdExternal fdReporting
Chapter fdFour: fdProcess fdCosting
Chapter fdFive: fdCost-Volume-Profit fdRelationships
Chapter fdSix: fdVariable fdCosting fdand fdSegment fdReporting: fdTools fdfor fdManagement
Chapter fdSeven: fdActivity-Based fdCosting: fdA fdTool fdto fdAid fdDecision fdMaking
Chapter fdEight: fdMaster fdBudgeting
Chapter fdNine: fdFlexible fdBudgets fdand fdPerformance fdAnalysis
Chapter fdTen: fdStandard fdCosts fdand fdVariances
Chapter fdEleven: fdResponsibility fdAccounting fdSystems
Chapter fdTwelve: fdStrategic fdPerformance fdMeasurement
Chapter fdThirteen: fdDifferential fdAnalysis: fdThe fdKey fdto fdDecision fdMaking
Chapter fdFourteen: fdCapital fdBudgeting fdDecisions
Chapter fdFifteen: fdStatement fdof fdCash fdFlows
Chapter fdSixteen: fdFinancial fdStatement fdAnalysis
,Chapter 1 fd
Managerial Accounting and Cost Concepts
fd fd fd fd
Questions
fddirectly fdto fdthe fdincome fdstatement fdas fdan
1-1 The fdthree fdmajor fdtypes fdof fdproduct
fdcosts fdin fda fdmanufacturing fdcompany fdare
fdexpense fdin fdthe fdperiod fdin fdwhich fdit fdis
fdincurred.
fddirect fdmaterials, fddirect fdlabor, fdand
fdmanufacturing fdoverhead.
1-2
a. Direct fdmaterials fdare fdan fdintegral fdpart
fdof fda fdfinished fdproduct fdand fdtheir fdcosts
fdcan fdbe fdconveniently fdtraced fdto fdit.
b. Indirect fdmaterials fdare fdgenerally fdsmall
fditems fdof fdmaterial fdsuch fdas fdglue fdand fdnails.
fdThey fdmay fdbe fdan fdintegral fdpart fdof fda
fdfinished fdproduct fdbut fdtheir fdcosts fdcan fdbe
fdtraced fdto fdthe fdproduct fdonly fdat fdgreat fdcost
fdor fdinconvenience.
c. Direct fdlabor fdconsists fdof fdlabor fdcosts
fdthat fdcan fdbe fdeasily fdtraced fdto fdparticular
fdproducts.
Direct fdlabor fdis fdalso fdcalled fd―touch fdlabor.‖
d. Indirect fdlabor fdconsists fdof fdthe fdlabor
fdcosts fdof fdjanitors, fdsupervisors, fdmaterials
fdhandlers, fdand fdother fdfactory fdworkers fdthat
fdcannot fdbe fdconveniently fdtraced fdto
fdparticular fdproducts. fdThese fdlabor fdcosts fdare
fdincurred fdto fdsupport fdproduction, fdbut fdthe
fdworkers fdinvolved fddo fdnot fddirectly fdwork fdon
fdthe fdproduct.
e. Manufacturing fdoverhead fdincludes fdall
fdmanufacturing fdcosts fdexcept fddirect fdmaterials
fdand fddirect fdlabor. fdConsequently,
fdmanufacturing fdoverhead fdincludes fdindirect
fdmaterials fdand fdindirect fdlabor fdas fdwell fdas
fdother fdmanufacturing fdcosts.
1-3 A fdproduct fdcost fdis fdany fdcost fdinvolved
fdin fdpurchasing fdor fdmanufacturing fdgoods. fdIn
fdthe fdcase fdof fdmanufactured fdgoods, fdthese
fdcosts fdconsist fdof fddirect fdmaterials, fddirect
fdlabor, fdand fdmanufacturing fdoverhead. fdA
fdperiod fdcost fdis fda fdcost fdthat fdis fdtaken
, 1-4
a. Variable fdcost: fdThe fdvariable fdcost fdper
fdunit fdis fdconstant, fdbut fdtotal fdvariable
fdcost fdchanges fdin fddirect fdproportion fdto
fdchanges fdin fdvolume.
b. Fixed fdcost: fdThe fdtotal fdfixed fdcost fdis
fdconstant fdwithin fdthe fdrelevant fdrange.
fdThe fdaverage fdfixed fdcost fdper fdunit
fdvaries fdinversely fdwith fdchanges f d in
fdvolume.
c. Mixed fdcost: fdA fdmixed fdcost fdcontains
fdboth fdvariable fdand fdfixed fdcost
fdelements.
1-5
a. Unit fdfixed fdcosts fddecrease fdas fdthe
fdactivity fdlevel fdincreases.
b. Unit fdvariable fdcosts fdremain fdconstant
fdas fdthe fdactivity fdlevel fdincreases.
c. Total fdfixed fdcosts fdremain fdconstant
fdas fdthe fdactivity fdlevel fdincreases.
d. Total fdvariable fdcosts fdincrease fdas fdthe
fdactivity fdlevel fdincreases.
1-6
a. Cost fdbehavior: fdCost fdbehavior fdrefers
fdto fdthe fdway fdin fdwhich fdcosts fdchange
fdin fdresponse fdto fdchanges fdin fda
fdmeasure fdof fdactivity fdsuch fdas fdsales
fdvolume, fdproduction fdvolume, fdor fdorders
fdprocessed.
b. Relevant fdrange: fdThe fdrelevant fdrange
fdis fdthe fdrange fdof fdactivity fdwithin fdwhich
fdassumptions fdabout fdvariable fdand
fdfixed fdcost fdbehavior fdare fdvalid.
1-7 An fdactivity fdbase fdis fda fdmeasure
fdof fdwhatever fdcauses fdthe fdincurrence fdof
fda fdvariable fdcost. fdExamples fdof fdactivity
fdbases fdinclude fdunits fdproduced, fdunits
fdsold, fdletters fdtyped, fdbeds fdin fda
fdhospital, fdmeals fdserved fdin fda fdcafe,
fdservice fdcalls fdmade, fdetc.
1-8 The fdlinear fdassumption fdis
fdreasonably fdvalid fdproviding fdthat fdthe fdcost
fdformula fdis fdused fdonly fdwithin fdthe fdrelevant
fdrange.
fd fd fd fd
18th Edition fd
By Ray Garrison, Eric Noreen and Peter
fd fd fd fd fd fd
Brewer fd
Verified Chapter's 1 - 16 | Complete
fd fd fd fd fd fd
,Table of Contents
fd fd
Chapter fdOne: fdManagerial fdAccounting fdand fdCost fdConcepts
Chapter fdTwo: fdJob-Order fdCosting: fdCalculating fdUnit fdProduct fdCosts
Chapter fdThree: fdJob-Order fdCosting: fdCost fdFlows fdand fdExternal fdReporting
Chapter fdFour: fdProcess fdCosting
Chapter fdFive: fdCost-Volume-Profit fdRelationships
Chapter fdSix: fdVariable fdCosting fdand fdSegment fdReporting: fdTools fdfor fdManagement
Chapter fdSeven: fdActivity-Based fdCosting: fdA fdTool fdto fdAid fdDecision fdMaking
Chapter fdEight: fdMaster fdBudgeting
Chapter fdNine: fdFlexible fdBudgets fdand fdPerformance fdAnalysis
Chapter fdTen: fdStandard fdCosts fdand fdVariances
Chapter fdEleven: fdResponsibility fdAccounting fdSystems
Chapter fdTwelve: fdStrategic fdPerformance fdMeasurement
Chapter fdThirteen: fdDifferential fdAnalysis: fdThe fdKey fdto fdDecision fdMaking
Chapter fdFourteen: fdCapital fdBudgeting fdDecisions
Chapter fdFifteen: fdStatement fdof fdCash fdFlows
Chapter fdSixteen: fdFinancial fdStatement fdAnalysis
,Chapter 1 fd
Managerial Accounting and Cost Concepts
fd fd fd fd
Questions
fddirectly fdto fdthe fdincome fdstatement fdas fdan
1-1 The fdthree fdmajor fdtypes fdof fdproduct
fdcosts fdin fda fdmanufacturing fdcompany fdare
fdexpense fdin fdthe fdperiod fdin fdwhich fdit fdis
fdincurred.
fddirect fdmaterials, fddirect fdlabor, fdand
fdmanufacturing fdoverhead.
1-2
a. Direct fdmaterials fdare fdan fdintegral fdpart
fdof fda fdfinished fdproduct fdand fdtheir fdcosts
fdcan fdbe fdconveniently fdtraced fdto fdit.
b. Indirect fdmaterials fdare fdgenerally fdsmall
fditems fdof fdmaterial fdsuch fdas fdglue fdand fdnails.
fdThey fdmay fdbe fdan fdintegral fdpart fdof fda
fdfinished fdproduct fdbut fdtheir fdcosts fdcan fdbe
fdtraced fdto fdthe fdproduct fdonly fdat fdgreat fdcost
fdor fdinconvenience.
c. Direct fdlabor fdconsists fdof fdlabor fdcosts
fdthat fdcan fdbe fdeasily fdtraced fdto fdparticular
fdproducts.
Direct fdlabor fdis fdalso fdcalled fd―touch fdlabor.‖
d. Indirect fdlabor fdconsists fdof fdthe fdlabor
fdcosts fdof fdjanitors, fdsupervisors, fdmaterials
fdhandlers, fdand fdother fdfactory fdworkers fdthat
fdcannot fdbe fdconveniently fdtraced fdto
fdparticular fdproducts. fdThese fdlabor fdcosts fdare
fdincurred fdto fdsupport fdproduction, fdbut fdthe
fdworkers fdinvolved fddo fdnot fddirectly fdwork fdon
fdthe fdproduct.
e. Manufacturing fdoverhead fdincludes fdall
fdmanufacturing fdcosts fdexcept fddirect fdmaterials
fdand fddirect fdlabor. fdConsequently,
fdmanufacturing fdoverhead fdincludes fdindirect
fdmaterials fdand fdindirect fdlabor fdas fdwell fdas
fdother fdmanufacturing fdcosts.
1-3 A fdproduct fdcost fdis fdany fdcost fdinvolved
fdin fdpurchasing fdor fdmanufacturing fdgoods. fdIn
fdthe fdcase fdof fdmanufactured fdgoods, fdthese
fdcosts fdconsist fdof fddirect fdmaterials, fddirect
fdlabor, fdand fdmanufacturing fdoverhead. fdA
fdperiod fdcost fdis fda fdcost fdthat fdis fdtaken
, 1-4
a. Variable fdcost: fdThe fdvariable fdcost fdper
fdunit fdis fdconstant, fdbut fdtotal fdvariable
fdcost fdchanges fdin fddirect fdproportion fdto
fdchanges fdin fdvolume.
b. Fixed fdcost: fdThe fdtotal fdfixed fdcost fdis
fdconstant fdwithin fdthe fdrelevant fdrange.
fdThe fdaverage fdfixed fdcost fdper fdunit
fdvaries fdinversely fdwith fdchanges f d in
fdvolume.
c. Mixed fdcost: fdA fdmixed fdcost fdcontains
fdboth fdvariable fdand fdfixed fdcost
fdelements.
1-5
a. Unit fdfixed fdcosts fddecrease fdas fdthe
fdactivity fdlevel fdincreases.
b. Unit fdvariable fdcosts fdremain fdconstant
fdas fdthe fdactivity fdlevel fdincreases.
c. Total fdfixed fdcosts fdremain fdconstant
fdas fdthe fdactivity fdlevel fdincreases.
d. Total fdvariable fdcosts fdincrease fdas fdthe
fdactivity fdlevel fdincreases.
1-6
a. Cost fdbehavior: fdCost fdbehavior fdrefers
fdto fdthe fdway fdin fdwhich fdcosts fdchange
fdin fdresponse fdto fdchanges fdin fda
fdmeasure fdof fdactivity fdsuch fdas fdsales
fdvolume, fdproduction fdvolume, fdor fdorders
fdprocessed.
b. Relevant fdrange: fdThe fdrelevant fdrange
fdis fdthe fdrange fdof fdactivity fdwithin fdwhich
fdassumptions fdabout fdvariable fdand
fdfixed fdcost fdbehavior fdare fdvalid.
1-7 An fdactivity fdbase fdis fda fdmeasure
fdof fdwhatever fdcauses fdthe fdincurrence fdof
fda fdvariable fdcost. fdExamples fdof fdactivity
fdbases fdinclude fdunits fdproduced, fdunits
fdsold, fdletters fdtyped, fdbeds fdin fda
fdhospital, fdmeals fdserved fdin fda fdcafe,
fdservice fdcalls fdmade, fdetc.
1-8 The fdlinear fdassumption fdis
fdreasonably fdvalid fdproviding fdthat fdthe fdcost
fdformula fdis fdused fdonly fdwithin fdthe fdrelevant
fdrange.
