Solution manual for managerial accounting 18th edition by ray garrison eric noreen and peter brewer

Solution Manual for Managerial Accounting,
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18th Editionn




By Ray Garrison, Eric Noreen and Peter Brewer
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Verified Chapter's 1 - 16 | Complete
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,Table of Contents n n




Chapter One: Managerial Accounting and Cost Concepts
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Chapter Two: Job-Order Costing: Calculating Unit Product Costs
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Chapter Three: Job-Order Costing: Cost Flows and External Reporting
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Chapter Four: Process Costing
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Chapter Five: Cost-Volume-Profit Relationships
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Chapter Six: Variable Costing and Segment Reporting: Tools for Management
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Chapter Seven: Activity-Based Costing: A Tool to Aid Decision Making
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Chapter Eight: Master Budgeting
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Chapter Nine: Flexible Budgets and Performance Analysis
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Chapter Ten: Standard Costs and Variances
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Chapter Eleven: Responsibility Accounting Systems
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Chapter Twelve: Strategic Performance Measurement
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Chapter Thirteen: Differential Analysis: The Key to Decision Making
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Chapter Fourteen: Capital Budgeting Decisions
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Chapter Fifteen: Statement of Cash Flows
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Chapter Sixteen: Financial Statement Analysis
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,Chapter 1 n




Managerial Accounting and Cost Concepts n n n n




Questions


1-1 The three major types of product costs in n n n n n n n 1-4
a manufacturing company are direct materials,
n n n n n n a. Variable cost: The variable cost per unit is n n n n n n n




direct labor, and manufacturing overhead.
n n n n n constant, but total variable cost changes in
n n n n n n n




direct proportion to changes in volume.
n n n n n n




1-2 b. Fixed cost: The total fixed cost is constant
n n n n n n n




a. Direct materials are an integral part of a n n n n n n n within the relevant range. The averagefixed
n n n n n n n




finished product and their costs can be
n n n n n n n cost per unit varies inversely with changes in
n n n n n n n n




conveniently traced to it.
n n n n volume.
n




b. Indirect materials are generally small items n n n n n c. Mixed cost: A mixed cost contains both
n n n n n n




of material such as glue and nails. They may be an
n n n n n n n n n n n variable and fixed cost elements.
n n n n n




integral part of a finished product but their costs
n n n n n n n n n




can be traced to the product only at great cost or
n n n n n n n n n n n 1-5
inconvenience.
n a. Unit fixed costs decrease as the activity level
n n n n n n n




c. Direct labor consists of labor costs that n n n n n n increases.
n




can be easily traced to particular products.
n n n n n n n b. Unit variable costs remain constant as the
n n n n n n




Direct labor is also called ―touch labor.‖
n n n n n n activity level increases.
n n n




d. Indirect labor consists of the labor costs of n n n n n n n c. Total fixed costs remain constant as the
n n n n n n




janitors, supervisors, materials handlers, and
n n n n n activity level increases.
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other factory workers that cannot be
n n n n n n d. Total variable costs increase as the activity
n n n n n n




conveniently traced to particular products.
n n n n n level increases.
n n




These labor costs are incurred to support
n n n n n n n




production, but the workers involved do not
n n n n n n n 1-6
directly work on the product.
n n n n n a. Cost behavior: Cost behavior refers to the
n n n n n n




e. Manufacturing overhead includes all n n n way in which costs change in response to
n n n n n n n n




manufacturing costs except direct materials and
n n n n n n changes in a measure of activity such as
n n n n n n n n




direct labor. Consequently, manufacturing
n n n n sales volume, production volume, or orders
n n n n n n




overhead includes indirect materials and indirect
n n n n n n processed.
n




labor as well as other manufacturing costs.
n n n n n n n b. Relevant range: The relevant range is the n n n n n n




range of activity within which assumptions
n n n n n n




1-3 A product cost is any cost involved in n n n n n n n about variable and fixed cost behavior are
n n n n n n n




purchasing or manufacturing goods. In the case of
n n n n n n n n valid.
n




manufactured goods, these costs consist of direct
n n n n n n n




materials, direct labor, and manufacturing
n n n n n 1-7 An activity base is a measure of n n n n n n




overhead. A period cost is a cost that is taken
n n n n n n n n n n whatever causes the incurrence of a variable
n n n n n n n




directly to the income statement as an expense in
n n n n n n n n n cost. Examples of activity bases include units
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the period in which it is incurred.
n n n n n n n produced, units sold, letters typed, beds in a
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hospital, meals served in a cafe, service calls
n n n n n n n n




made, etc.
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1-8 The linear assumption is reasonably valid
n n n n n

, providing that the cost formula is used only within
n n n n n n n n n




the relevant range.
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