Solutions Manual
to accompany
Managerial
Accounting
Twelfth Edition
Ray H. Garrison
Professor Emeritus, Brigham Young University
Eric W. Noreen
Professor Emeritus, University of Washington
Peter C. Brewer
Miami University
,Contents
Suggested Course Outlines ............................................................................ iv
Problem and Case Material Scaled as to Difficulty ............................................ v
Suggested Problem and Case Assignments...................................................... vi
Chapter 1 Managerial Accounting and the Business Environment ................ 1
Chapter 2 Cost Terms, Concepts, and Classifications.................................. 19
Chapter 3 Systems Design: Job-Order Costing........................................... 71
Chapter 4 Systems Design: Process Costing .............................................. 141
Chapter 5 Cost Behavior: Analysis and Use ............................................... 195
Chapter 6 Cost-Volume-Profit Relationships............................................... 255
Chapter 7 Variable Costing: A Tool for Management .................................. 335
Chapter 8 Activity-Based Costing: A Tool to Aid Decision Making................. 379
Chapter 9 Profit Planning......................................................................... 455
Chapter 10 Standard Costs and the Balanced Scorecard............................... 505
Chapter 11 Flexible Budgets and Overhead Analysis .................................... 591
Chapter 12 Segment Reporting and Decentralization ................................... 647
Chapter 13 Relevant Costs for Decision Making ........................................... 711
Chapter 14 Capital Budgeting Decisions...................................................... 771
Chapter 15 ―How Well Am I Doing?‖ Statement of Cash Flows...................... 827
Chapter 16 ―How Well Am I Doing?‖ Financial Statement Analysis ................ 877
Appendix A Pricing Products and Services ................................................... 925
Appendix B Profitability Analysis ................................................................. 949
,Suggested Course Outlines
Course Outline #1: For lower division undergraduates who have completed one or two terms of
financial accounting.
Course Outline #2: For accounting majors or graduate students seeking a comprehensive course
in managerial accounting.
Course Outline #3: For management development programs and/or upper division survey courses
in managerial accounting.
All outlines assume 45 periods during a term with each period being 50 minutes in length.
COURSE OUTLINE COURSE OUTLINE COURSE OUTLINE
#1 #2 #3
Outline #1A Outline #1B
Chapter Periods Chapter Periods Chapter Periods Chapter Periods
1 1.0 1 1.0 1 1.0 1 2.0
2 3.0 16 3.0 2 3.0 2 2.5
3 3.0 17 2.5 3 3.0 3 3.0
4 3.0 2 2.0 4 3.0 5 2.0
5 3.0 3 3.0 5 2.0 6 3.0
6 3.0 4 2.5 6 3.0 7 2.5
7 2.0 5 2.5 7 2.0 8 3.0
8 3.5 6 2.5 8 3.0 9 3.0
9 3.0 7 2.0 9 3.0 10 3.0
10 3.5 8 3.0 10 3.0 11 3.0
11 3.0 9 3.0 11 3.0 12 4.5
12 3.0 10 3.0 12 5.0 13 5.5
13 4.0 11 2.5 13 5.0 14 5.0
14 4.0 12 3.5 14 4.0 Tests 3.0
Tests 3.0 13 3.0 Tests 3.0 45.0
45.0 14 3.0 45.0
Tests 3.0
45.0
, Problem and Case Material Scaled as to Difficulty
Each exercise, problem, and case in the text has been rated below as Basic, Medium, or Difficult.
Basic: Straightforward application of concepts, with few extraneous or complicating factors.
Medium: More rigorous application of concepts than in basic problems. Extraneous material may be
present and the student may have to use concepts in ways not specifically illustrated in the text. It is not
necessary to go beyond this level to give students challenging and thought-provoking homework.
Difficult: Unusually rigorous application of concepts that often includes extraneous data.
Basic Medium Difficult
Chapter 1 1, 2, 3, 4, 5 6, 7, 8 9
Chapter 2 1, 2, 3, 4, 5, 6, 7, 10, 11, 12, 14, 16, 17 19, 20, 21, 23, 28, 29, 30, 31, 32
24, 25, 26, 27
Appendix 2A 8, 13, 15,
Appendix 2B 9, 18 22
Chapter 3 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 15, 16, 22, 23, 24, 25, 30, 31, 33, 34, 35
17, 18, 19, 20, 21 27, 28, 29
Appendix 3A 14 26 32
Chapter 4 1, 2, 3, 4, 10, 11, 14, 18, 19, 21 24, 25 26, 27, 28, 29, 32
Appendix 4A 5, 6, 7, 12, 13, 15, 20, 22 30
Appendix 4B 8, 9, 16, 17 23 31
Chapter 5 1, 2, 3, 4, 6, 7, 9, 10, 11, 12, 15, 16 17, 18, 24 21, 22, 23, 27
Appendix 5A 5, 8, 13, 14 19, 20 25, 26, 28
Chapter 6 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 22, 23, 24, 25, 31, 32, 33, 34
16, 17, 18, 19, 20, 21 26, 27, 28, 29, 30
Chapter 7 1, 2, 3, 5, 6, 7, 8, 9, 10, 11 4, 12, 13, 14 15, 16, 17, 18, 19
Chapter 8 1, 2, 3, 4, 5, 8, 9, 10, 11, 12, 14, 15, 17, 18, 22, 25, 26 32
19, 21
Appendix 8A 6, 13, 16 23, 27 30
Appendix 8B 7, 20 24, 28, 29 31
Chapter 9 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15 16, 17, 18, 19, 20 21, 22, 23, 24
Chapter 10 1, 2, 3, 4, 5, 6, 8, 9, 10, 11, 12, 13, 14, 16, 21, 22, 23, 24, 25 26, 27, 29, 30,
17, 19, 20 31, 32, 33
Appendix 10A 7, 15, 18 28
Chapter 11 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 22, 23, 24, 25, 29, 30, 31
16, 17, 18, 19, 20, 21 26, 27, 28
Chapter 12 1, 2, 3, 6, 7, 8, 11, 12, 13, 14, 15, 18, 20, 22, 19, 21, 26, 27, 34, 36
23 29, 30, 33
Appendix 12A 4, 9, 16 24, 28, 31 35
Appendix 12B 5, 10, 17, 32 25
Chapter 13 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 18, 19, 20, 21, 24, 25, 26, 28,
16, 17 22, 23, 27 29, 30
Chapter 14 1, 2, 3, 4, 5, 6, 9, 10, 11, 12, 13, 16, 17, 18, 27, 28, 29, 30, 33, 39, 40
19, 21, 22, 23, 25, 26 31, 32, 34, 36, 38
Appendix 14A 7, 14
Appendix 14C 8, 15, 20, 24 35, 37
Chapter 15 1, 2, 4, 6, 7, 9, 10, 12 14 16, 18, 19
Appendix 15A 3, 5, 8, 11, 13 15 17
Chapter 16 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14 15, 16, 17 18, 19, 20
Pricing App. 1, 2, 3 4, 5 6, 7, 8
Profitability App. 1, 2, 3 4, 6, 7 5, 8
to accompany
Managerial
Accounting
Twelfth Edition
Ray H. Garrison
Professor Emeritus, Brigham Young University
Eric W. Noreen
Professor Emeritus, University of Washington
Peter C. Brewer
Miami University
,Contents
Suggested Course Outlines ............................................................................ iv
Problem and Case Material Scaled as to Difficulty ............................................ v
Suggested Problem and Case Assignments...................................................... vi
Chapter 1 Managerial Accounting and the Business Environment ................ 1
Chapter 2 Cost Terms, Concepts, and Classifications.................................. 19
Chapter 3 Systems Design: Job-Order Costing........................................... 71
Chapter 4 Systems Design: Process Costing .............................................. 141
Chapter 5 Cost Behavior: Analysis and Use ............................................... 195
Chapter 6 Cost-Volume-Profit Relationships............................................... 255
Chapter 7 Variable Costing: A Tool for Management .................................. 335
Chapter 8 Activity-Based Costing: A Tool to Aid Decision Making................. 379
Chapter 9 Profit Planning......................................................................... 455
Chapter 10 Standard Costs and the Balanced Scorecard............................... 505
Chapter 11 Flexible Budgets and Overhead Analysis .................................... 591
Chapter 12 Segment Reporting and Decentralization ................................... 647
Chapter 13 Relevant Costs for Decision Making ........................................... 711
Chapter 14 Capital Budgeting Decisions...................................................... 771
Chapter 15 ―How Well Am I Doing?‖ Statement of Cash Flows...................... 827
Chapter 16 ―How Well Am I Doing?‖ Financial Statement Analysis ................ 877
Appendix A Pricing Products and Services ................................................... 925
Appendix B Profitability Analysis ................................................................. 949
,Suggested Course Outlines
Course Outline #1: For lower division undergraduates who have completed one or two terms of
financial accounting.
Course Outline #2: For accounting majors or graduate students seeking a comprehensive course
in managerial accounting.
Course Outline #3: For management development programs and/or upper division survey courses
in managerial accounting.
All outlines assume 45 periods during a term with each period being 50 minutes in length.
COURSE OUTLINE COURSE OUTLINE COURSE OUTLINE
#1 #2 #3
Outline #1A Outline #1B
Chapter Periods Chapter Periods Chapter Periods Chapter Periods
1 1.0 1 1.0 1 1.0 1 2.0
2 3.0 16 3.0 2 3.0 2 2.5
3 3.0 17 2.5 3 3.0 3 3.0
4 3.0 2 2.0 4 3.0 5 2.0
5 3.0 3 3.0 5 2.0 6 3.0
6 3.0 4 2.5 6 3.0 7 2.5
7 2.0 5 2.5 7 2.0 8 3.0
8 3.5 6 2.5 8 3.0 9 3.0
9 3.0 7 2.0 9 3.0 10 3.0
10 3.5 8 3.0 10 3.0 11 3.0
11 3.0 9 3.0 11 3.0 12 4.5
12 3.0 10 3.0 12 5.0 13 5.5
13 4.0 11 2.5 13 5.0 14 5.0
14 4.0 12 3.5 14 4.0 Tests 3.0
Tests 3.0 13 3.0 Tests 3.0 45.0
45.0 14 3.0 45.0
Tests 3.0
45.0
, Problem and Case Material Scaled as to Difficulty
Each exercise, problem, and case in the text has been rated below as Basic, Medium, or Difficult.
Basic: Straightforward application of concepts, with few extraneous or complicating factors.
Medium: More rigorous application of concepts than in basic problems. Extraneous material may be
present and the student may have to use concepts in ways not specifically illustrated in the text. It is not
necessary to go beyond this level to give students challenging and thought-provoking homework.
Difficult: Unusually rigorous application of concepts that often includes extraneous data.
Basic Medium Difficult
Chapter 1 1, 2, 3, 4, 5 6, 7, 8 9
Chapter 2 1, 2, 3, 4, 5, 6, 7, 10, 11, 12, 14, 16, 17 19, 20, 21, 23, 28, 29, 30, 31, 32
24, 25, 26, 27
Appendix 2A 8, 13, 15,
Appendix 2B 9, 18 22
Chapter 3 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 15, 16, 22, 23, 24, 25, 30, 31, 33, 34, 35
17, 18, 19, 20, 21 27, 28, 29
Appendix 3A 14 26 32
Chapter 4 1, 2, 3, 4, 10, 11, 14, 18, 19, 21 24, 25 26, 27, 28, 29, 32
Appendix 4A 5, 6, 7, 12, 13, 15, 20, 22 30
Appendix 4B 8, 9, 16, 17 23 31
Chapter 5 1, 2, 3, 4, 6, 7, 9, 10, 11, 12, 15, 16 17, 18, 24 21, 22, 23, 27
Appendix 5A 5, 8, 13, 14 19, 20 25, 26, 28
Chapter 6 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 22, 23, 24, 25, 31, 32, 33, 34
16, 17, 18, 19, 20, 21 26, 27, 28, 29, 30
Chapter 7 1, 2, 3, 5, 6, 7, 8, 9, 10, 11 4, 12, 13, 14 15, 16, 17, 18, 19
Chapter 8 1, 2, 3, 4, 5, 8, 9, 10, 11, 12, 14, 15, 17, 18, 22, 25, 26 32
19, 21
Appendix 8A 6, 13, 16 23, 27 30
Appendix 8B 7, 20 24, 28, 29 31
Chapter 9 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15 16, 17, 18, 19, 20 21, 22, 23, 24
Chapter 10 1, 2, 3, 4, 5, 6, 8, 9, 10, 11, 12, 13, 14, 16, 21, 22, 23, 24, 25 26, 27, 29, 30,
17, 19, 20 31, 32, 33
Appendix 10A 7, 15, 18 28
Chapter 11 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 22, 23, 24, 25, 29, 30, 31
16, 17, 18, 19, 20, 21 26, 27, 28
Chapter 12 1, 2, 3, 6, 7, 8, 11, 12, 13, 14, 15, 18, 20, 22, 19, 21, 26, 27, 34, 36
23 29, 30, 33
Appendix 12A 4, 9, 16 24, 28, 31 35
Appendix 12B 5, 10, 17, 32 25
Chapter 13 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 18, 19, 20, 21, 24, 25, 26, 28,
16, 17 22, 23, 27 29, 30
Chapter 14 1, 2, 3, 4, 5, 6, 9, 10, 11, 12, 13, 16, 17, 18, 27, 28, 29, 30, 33, 39, 40
19, 21, 22, 23, 25, 26 31, 32, 34, 36, 38
Appendix 14A 7, 14
Appendix 14C 8, 15, 20, 24 35, 37
Chapter 15 1, 2, 4, 6, 7, 9, 10, 12 14 16, 18, 19
Appendix 15A 3, 5, 8, 11, 13 15 17
Chapter 16 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14 15, 16, 17 18, 19, 20
Pricing App. 1, 2, 3 4, 5 6, 7, 8
Profitability App. 1, 2, 3 4, 6, 7 5, 8
