Solution Manual for Managerial Accounting,
18th Edition
By Ray Garrison, Eric Noreen and Peter Brewer
Verified Chapter's 1 - 16 | Complete
,TableofContents zl zl
Chapter One: Managerial Accounting and Cost Concepts Cha
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pter Two: Job-Order Costing: Calculating Unit Product Costs
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Chapter Three: Job- zl zl
Order Costing: Cost Flows and External Reporting Chapter Four: Process Cos
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ting
Chapter Five: Cost-Volume-Profit Relationships
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Chapter Six: Variable Costing and Segment Reporting: Tools for Management
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zl Chapter Seven: Activity- z l z l
Based Costing: A Tool to Aid Decision Making Chapter Eight: Master Bu
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dgeting
Chapter Nine: Flexible Budgets and Performance Analysis Chapt
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er Ten: Standard Costs and Variances
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Chapter Eleven: Responsibility Accounting Systems Cha
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pter Twelve: Strategic Performance Measurement
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Chapter Thirteen: Differential Analysis: The Key to Decision Making Chap
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ter Fourteen: Capital Budgeting Decisions
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Chapter Fifteen: Statement ofDCash Flows Cha
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pter Sixteen: Financial Statement Analysis
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,Chapter1 z
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ManagerialAccounting and Cost Concepts zl zl zl zl
Questions
1-1 The three major types of product cost zl zl zl zl zl zl zl 1-4
s in a manufacturing company are direct mat e
zl zl zl zl zl zl zl zl a. Variable cost: The variable costDper unit i zl zl zl zl zl zl z l
rials, direct labor, and manufacturing overhe a
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d. s in direct proportion to changes in volu m
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e.
1-2 b. Fixed cost: The total fixed cost is constant
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a. Direct materials are an integral part ofD zl zl zl zl zl zl z l within the relevant range. The average fix ezl zl zl zl zl zl zl
a finished productDand their costs can be con v
zl zl zl zl zl zl zl zl d cost per unitDvaries inversely with chan ge
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eniently traced to it. zl zl zl s in volume. z l zl
b. Indirect materials are generally small ite zl zl zl zl zl zl c. Mixed cost: A mixed cost contains bot zl zl zl zl zl zl zl
ms of material such as glue and nails. They m ay
zl zl zl zl zl zl zl zl zl zl h variable and fixed cost elements.
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be an integral part ofDa finished product but the
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ir costs can be traced to the product only
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at great cost or inconvenience.
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c. Direct labor consists of labor costs th a zl zl zl zl zl zl zl el increases. zl
t can be easily traced to particular product s.
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Direct labor is also called ―touch labor.‖
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d. Indirect labor consists of the labor cost zl zl zl zl zl zl z c. Total fixed costs remain constant as th zl zl zl zl zl zl zl
l s ofDjanitors, supervisors, materials handlers,
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a nd other factory workers that cannotDbe conv
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eniently traced to particular products. These l a
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bor costs are incurred to support production, bu
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t the workers involved do not directly wor kDon
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the product. zl a. Cost behavior: CostDbehavior refers to the
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e. Manufacturing overhead includes all ma n zl zl zl zl zl way in which costs change in response
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ufacturing costs except direct materials and d ir zl zl zl zl zl zl zl t o changes in a measure of activity such a
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ectDlabor. Consequently, manufacturing overh e zl zl zl zl s sales volume, production volume, or or
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ad includes indirect materials and indirect lab or
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as well as other manufacturing costs.
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range of activity within which assumpti o
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1-3 ns about variable and fixed cost behavi or
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A product cost is any costDinvolved in p zl zl zl zl zl zl zl are valid. zl
urchasing or manufacturing goods. In the cas e zl zl zl zl zl zl zl z
of manufactured goods, these costs consist o
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f direct materials, direct labor, and manufactu ri
zl zl zl zl zl zl zl atever causes the incurrence of a variable co
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ng overhead. A period cost is a cost that is t ake
zl zl zl zl zl zl zl zl zl zl zl st. Examples of activity bases include uni ts p
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n directly to the income statement as an e xpen
zl zl zl zl zl zl zl zl zl roduced, units sold, letters typed, beds in a
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se in the period in which it is incurred.
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s made, etc.
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, 1-8 The linear assumption is reasonably v a
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lid providing that the cost formula is used on ly
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within the relevant range.
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18th Edition
By Ray Garrison, Eric Noreen and Peter Brewer
Verified Chapter's 1 - 16 | Complete
,TableofContents zl zl
Chapter One: Managerial Accounting and Cost Concepts Cha
z l z l z l z l z l z l zl
pter Two: Job-Order Costing: Calculating Unit Product Costs
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Chapter Three: Job- zl zl
Order Costing: Cost Flows and External Reporting Chapter Four: Process Cos
zl zl zl zl zl zl zl zl zl zl
ting
Chapter Five: Cost-Volume-Profit Relationships
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Chapter Six: Variable Costing and Segment Reporting: Tools for Management
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zl Chapter Seven: Activity- z l z l
Based Costing: A Tool to Aid Decision Making Chapter Eight: Master Bu
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dgeting
Chapter Nine: Flexible Budgets and Performance Analysis Chapt
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er Ten: Standard Costs and Variances
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Chapter Eleven: Responsibility Accounting Systems Cha
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pter Twelve: Strategic Performance Measurement
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Chapter Thirteen: Differential Analysis: The Key to Decision Making Chap
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ter Fourteen: Capital Budgeting Decisions
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Chapter Fifteen: Statement ofDCash Flows Cha
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pter Sixteen: Financial Statement Analysis
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,Chapter1 z
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ManagerialAccounting and Cost Concepts zl zl zl zl
Questions
1-1 The three major types of product cost zl zl zl zl zl zl zl 1-4
s in a manufacturing company are direct mat e
zl zl zl zl zl zl zl zl a. Variable cost: The variable costDper unit i zl zl zl zl zl zl z l
rials, direct labor, and manufacturing overhe a
zl zl zl zl zl zl s constant, but total variable cost change
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d. s in direct proportion to changes in volu m
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e.
1-2 b. Fixed cost: The total fixed cost is constant
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a. Direct materials are an integral part ofD zl zl zl zl zl zl z l within the relevant range. The average fix ezl zl zl zl zl zl zl
a finished productDand their costs can be con v
zl zl zl zl zl zl zl zl d cost per unitDvaries inversely with chan ge
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eniently traced to it. zl zl zl s in volume. z l zl
b. Indirect materials are generally small ite zl zl zl zl zl zl c. Mixed cost: A mixed cost contains bot zl zl zl zl zl zl zl
ms of material such as glue and nails. They m ay
zl zl zl zl zl zl zl zl zl zl h variable and fixed cost elements.
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be an integral part ofDa finished product but the
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ir costs can be traced to the product only
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at great cost or inconvenience.
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c. Direct labor consists of labor costs th a zl zl zl zl zl zl zl el increases. zl
t can be easily traced to particular product s.
zl zl zl zl zl zl zl zl b. Unit variable costs remain constantDas th
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Direct labor is also called ―touch labor.‖
zl zl zl zl zl zl e activity level increases.
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d. Indirect labor consists of the labor cost zl zl zl zl zl zl z c. Total fixed costs remain constant as th zl zl zl zl zl zl zl
l s ofDjanitors, supervisors, materials handlers,
zl zl zl zl zl e activity level increases.
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a nd other factory workers that cannotDbe conv
zl zl zl zl zl zl zl zl d. Total variable costs increase as the activit
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eniently traced to particular products. These l a
zl zl zl zl zl zl zl y level increases.
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bor costs are incurred to support production, bu
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t the workers involved do not directly wor kDon
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the product. zl a. Cost behavior: CostDbehavior refers to the
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e. Manufacturing overhead includes all ma n zl zl zl zl zl way in which costs change in response
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ufacturing costs except direct materials and d ir zl zl zl zl zl zl zl t o changes in a measure of activity such a
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ectDlabor. Consequently, manufacturing overh e zl zl zl zl s sales volume, production volume, or or
z l zl zl zl zl zl zl
ad includes indirect materials and indirect lab or
zl zl zl zl zl zl zl zl d ers processed. zl zl
as well as other manufacturing costs.
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range of activity within which assumpti o
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1-3 ns about variable and fixed cost behavi or
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A product cost is any costDinvolved in p zl zl zl zl zl zl zl are valid. zl
urchasing or manufacturing goods. In the cas e zl zl zl zl zl zl zl z
of manufactured goods, these costs consist o
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f direct materials, direct labor, and manufactu ri
zl zl zl zl zl zl zl atever causes the incurrence of a variable co
zl zl zl zl zl zl zl
ng overhead. A period cost is a cost that is t ake
zl zl zl zl zl zl zl zl zl zl zl st. Examples of activity bases include uni ts p
zl zl zl zl zl zl zl zl
n directly to the income statement as an e xpen
zl zl zl zl zl zl zl zl zl roduced, units sold, letters typed, beds in a
zl zl zl zl zl z l zl zl
se in the period in which it is incurred.
zl zl zl zl zl zl zl zl hospital, meals served in a cafe, servic e call
zl zl zl zl zl zl z l zl
s made, etc.
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, 1-8 The linear assumption is reasonably v a
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lid providing that the cost formula is used on ly
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within the relevant range.
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