Solution Manual for Management
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w r Accounting for Decision Makers:
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11th Edition By Peter Atrill, Eddie
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w r McLaney All Chapters 1 - 12
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,TABLE OF CONTENTS
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1. Introduction to management accounting wr wr wr
2. Relevant costs and benefits for decision making
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3. Cost–volume–profit analysis wr
4. Full costing
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5. Costing and cost management in a competitive environment
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6. Budgeting
7. Accounting for control wr wr
8. Making capital investment decisions
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9. Managing risk wr
10.Strategic management accounting: performance evaluation and
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pricing in a competitive environment
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11.Measuring divisional performance
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12.Managing working capital wr wr
, SECTION A w r
Authors’notetotutors wr wr wr
Using the book wr wr
The book is designed to provide readers with a sound introduction to management accounting. It
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assumes no previous knowledge of the subject and recognises that students using it may come from a
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wide variety of backgrounds. The book, therefore, tries to avoid technical jargon and does not assume a
wr wr wr wr wr wr wr wr wr wr wr wr wr wr wr wr wr
high level of numerical ability from students. It has been class tested by students on various courses and
wr wr wr wr wr wr wr wr wr wr wr wr wr wr wr wr wr wr
we have modified and refined the material to take account of their comments. We have also taken
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account of the comments made by lecturers who used the first nine editions of the book and of specially
wr wr wr wr wr wr wr wr wr wr wr wr wr wr wr wr wr wr wr
commissioned reviews.
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The book aims to encourage an active approach to learning by providing activities and self-assessment
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questions at appropriate points. This approach is designed to stimulate thought concerning particular
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issuesand togive thereaders theopportunity totest their understanding of theprinciples covered.
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The book is supplemented by a password-controlled lecturers’ website and a student website available to
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all readers.
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The structure of the book allows the tutor to deliver the subject in a number of ways. It can be used as
wr wr wr wr wr wr wr wr wr wr wr wr wr wr wr wr wr wr wr wr wr
recommended reading for a traditional course based on lectures and tutorials. There are critical review
wr wr wr wr wr wr wr wr wr wr wr wr wr wr wr
questions and exercises at the end of each chapter that can be used as the basis for tutorials. It could also
wr wr wr wr wr wr wr wr wr wr wr wr wr wr wr wr wr wr w r wr wr
provide the basis for a distance learning approach for part-time or off-campus students. For these
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students, the interactive nature of the book may be extremely useful where access to a tutor is restricted.
wr wr wr wr wr wr wr wr wr wr wr wr wr wr wr wr wr wr
The book can also be used as the basis for an open learning approach for full-time campus-based students.
wr wr wr wr wr wr wr wr wr wr wr wr wr wr wr wr wr wr
We have successfully used it in this way at the University of Plymouth Business School. Accounting
wr wr wr wr wr wr wr wr wr wr wr wr wr wr wr wr
‘surgeries’ have also been provided to give students the opportunity for one-to-one help with any
wr wr wr wr wr wr wr wr wr wr wr wr wr wr wr
problems they face.
wr wr wr
The book is appropriate for modules that are designed to be covered in 100 to 150 hours of study. For full-
wr wr wr wr wr wr wr wr wr wr wr wr wr wr wr wr wr wr wr wr
time students, this will often be covered in one academic year.
wr wr wr wr wr wr wr wr wr wr
PowerPointslides w
r
The diagrams in the book, along with other diagrams and materials, are available as PowerPoint slides to
wr wr wr wr wr wr wr wr wr wr wr wr wr wr wr wr
help in delivering lectures and tutorials and these can be downloaded from the lecturers’ website.
wr wr wr wr wr wr wr wr wr wr wr wr wr wr wr
Practice/assessmentmaterial w
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The activities, whose solutions immediately follow them, and self-assessment questions, whose
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solutions are at the end of the book, form an integral part of it. In addition, there are various other
wr wr w r w r w r w r w r w r w r wr w r w r w r w r w r w r w r w r w r w r
, practice/assessment materials. At the end of each chapter there are four critical review questions. These wr wr wr wr wr wr wr wr wr wr wr wr wr wr
are short, narrative questions involving recall, explanation and brief discussion. The solutions to these
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are given at the end of the book. At the end of all chapters, except Chapter 1 (where there are two), there
wr wr wr wr wr wr wr wr wr wr wr wr wr wr wr wr wr wr wr wr wr wr
are eight exercises. These are questions, many involving calculations, which are similar in nature to
wr wr wr wr wr wr wr wr wr wr wr wr wr wr wr
examination-style questions. The solutions to five of these are given at the end of the book and are,
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therefore, accessible to students. Solutions to the other three are in the following pages of this manual
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and are not accessible to students.
wr wr wr wr wr wr
On the lecturers’ website, in addition to this Instructor’s Manual with solutions to selected end-of-
wr wr wr wr wr wr wr wr wr wr wr wr wr wr
chapter exercises there are:
wr wr wr wr
• Two progress tests with solutions. These tests comprise multiple-choice questions, missing- word
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questions and questions that are similar to the end-of-chapter exercises. One test corresponds to
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Chapters 1 to 5, and the other to Chapters 6 to 12.
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• Supplementary questions (10 of them) with solutions. wr wr wr wr wr wr
• Tutorial/seminarquestionswithsolutions. w
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None of this material, except the case study comments, is accessible to students. On the
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wr student website, there are five types of material:
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• Revision exercises, similar in style to theend-of-chapter exercises, with solutions.
wr wr wr wr wr wr wr wr wr wr
• Multiple-choice questions, typically 10 for each chapter. These are intended to be tackled online, wr wr wr wr wr wr wr wr wr wr wr wr wr
where they will be automatically graded.
wr wr wr wr wr wr
• Missing-word questions, typically 10 for each chapter. These too can be attempted and graded wr wr wr wr wr wr wr wr wr wr wr wr wr
online.
wr
The multiple-choice questions and missing-word questions are intended to provide students with a quick
wr wr wr wr wr wr wr wr wr wr wr wr wr
assessment of their mastery of the material of each chapter.
wr wr wr wr wr wr wr wr wr wr
The solutions to all of this material, except to the multiple-choice and missing-word questions, are fully
wr wr wr wr wr wr wr wr wr wr wr wr wr wr wr
annotated in order to give the necessary feedback to students.
wr wr wr wr wr wr wr wr wr wr
We intend to expand the number and scope of the practice/assessment materials on a continuing basis.
wr wr wr wr wr wr wr wr wr wr wr wr wr wr wr
We hope that you and your students will find the book both accessible and interesting. We should much
wr wr wr wr wr wr wr wr wr wr wr wr wr wr wr wr wr
appreciate any suggestions you may have on how the book and supplementary material may be
wr wr wr wr wr wr wr wr wr wr wr wr wr wr wr
improved.
wr
Peter Atrill wr
EddieMcLaney
wr r
w
w r w r w r
w r Accounting for Decision Makers:
w r w r w r w r
11th Edition By Peter Atrill, Eddie
w r w r w r w r w r
w r McLaney All Chapters 1 - 12
w r w r w r w r w r w r
,TABLE OF CONTENTS
wr wr
1. Introduction to management accounting wr wr wr
2. Relevant costs and benefits for decision making
wr wr wr wr wr wr
3. Cost–volume–profit analysis wr
4. Full costing
wr
5. Costing and cost management in a competitive environment
wr wr wr wr wr wr wr
6. Budgeting
7. Accounting for control wr wr
8. Making capital investment decisions
wr wr wr
9. Managing risk wr
10.Strategic management accounting: performance evaluation and
wr wr wr wr wr
pricing in a competitive environment
wr wr wr wr wr
11.Measuring divisional performance
wr wr
12.Managing working capital wr wr
, SECTION A w r
Authors’notetotutors wr wr wr
Using the book wr wr
The book is designed to provide readers with a sound introduction to management accounting. It
wr wr wr wr wr wr wr wr wr wr wr wr wr wr
assumes no previous knowledge of the subject and recognises that students using it may come from a
wr wr wr wr wr wr wr wr wr wr wr wr wr wr wr wr wr
wide variety of backgrounds. The book, therefore, tries to avoid technical jargon and does not assume a
wr wr wr wr wr wr wr wr wr wr wr wr wr wr wr wr wr
high level of numerical ability from students. It has been class tested by students on various courses and
wr wr wr wr wr wr wr wr wr wr wr wr wr wr wr wr wr wr
we have modified and refined the material to take account of their comments. We have also taken
wr wr wr wr wr wr wr wr wr wr wr wr wr wr wr wr wr
account of the comments made by lecturers who used the first nine editions of the book and of specially
wr wr wr wr wr wr wr wr wr wr wr wr wr wr wr wr wr wr wr
commissioned reviews.
wr wr
The book aims to encourage an active approach to learning by providing activities and self-assessment
wr wr wr wr wr wr wr wr wr wr wr wr wr wr
questions at appropriate points. This approach is designed to stimulate thought concerning particular
wr wr wr wr wr wr wr wr wr wr wr wr wr
issuesand togive thereaders theopportunity totest their understanding of theprinciples covered.
wr wr wr w
r wr wr wr wr wr wr wr wr wr wr wr wr
The book is supplemented by a password-controlled lecturers’ website and a student website available to
wr wr wr wr wr wr wr wr wr wr wr wr wr wr
all readers.
wr wr
The structure of the book allows the tutor to deliver the subject in a number of ways. It can be used as
wr wr wr wr wr wr wr wr wr wr wr wr wr wr wr wr wr wr wr wr wr
recommended reading for a traditional course based on lectures and tutorials. There are critical review
wr wr wr wr wr wr wr wr wr wr wr wr wr wr wr
questions and exercises at the end of each chapter that can be used as the basis for tutorials. It could also
wr wr wr wr wr wr wr wr wr wr wr wr wr wr wr wr wr wr w r wr wr
provide the basis for a distance learning approach for part-time or off-campus students. For these
wr wr wr wr wr wr wr wr wr wr wr wr wr wr wr
students, the interactive nature of the book may be extremely useful where access to a tutor is restricted.
wr wr wr wr wr wr wr wr wr wr wr wr wr wr wr wr wr wr
The book can also be used as the basis for an open learning approach for full-time campus-based students.
wr wr wr wr wr wr wr wr wr wr wr wr wr wr wr wr wr wr
We have successfully used it in this way at the University of Plymouth Business School. Accounting
wr wr wr wr wr wr wr wr wr wr wr wr wr wr wr wr
‘surgeries’ have also been provided to give students the opportunity for one-to-one help with any
wr wr wr wr wr wr wr wr wr wr wr wr wr wr wr
problems they face.
wr wr wr
The book is appropriate for modules that are designed to be covered in 100 to 150 hours of study. For full-
wr wr wr wr wr wr wr wr wr wr wr wr wr wr wr wr wr wr wr wr
time students, this will often be covered in one academic year.
wr wr wr wr wr wr wr wr wr wr
PowerPointslides w
r
The diagrams in the book, along with other diagrams and materials, are available as PowerPoint slides to
wr wr wr wr wr wr wr wr wr wr wr wr wr wr wr wr
help in delivering lectures and tutorials and these can be downloaded from the lecturers’ website.
wr wr wr wr wr wr wr wr wr wr wr wr wr wr wr
Practice/assessmentmaterial w
r
The activities, whose solutions immediately follow them, and self-assessment questions, whose
wr wr wr wr wr wr wr wr wr wr
solutions are at the end of the book, form an integral part of it. In addition, there are various other
wr wr w r w r w r w r w r w r w r wr w r w r w r w r w r w r w r w r w r w r
, practice/assessment materials. At the end of each chapter there are four critical review questions. These wr wr wr wr wr wr wr wr wr wr wr wr wr wr
are short, narrative questions involving recall, explanation and brief discussion. The solutions to these
wr wr wr wr wr wr wr wr wr wr wr wr wr wr
are given at the end of the book. At the end of all chapters, except Chapter 1 (where there are two), there
wr wr wr wr wr wr wr wr wr wr wr wr wr wr wr wr wr wr wr wr wr wr
are eight exercises. These are questions, many involving calculations, which are similar in nature to
wr wr wr wr wr wr wr wr wr wr wr wr wr wr wr
examination-style questions. The solutions to five of these are given at the end of the book and are,
wr wr wr wr wr wr wr wr wr wr wr wr wr w r wr wr wr wr
therefore, accessible to students. Solutions to the other three are in the following pages of this manual
wr wr wr wr wr wr wr wr wr wr wr wr w r wr wr wr wr
and are not accessible to students.
wr wr wr wr wr wr
On the lecturers’ website, in addition to this Instructor’s Manual with solutions to selected end-of-
wr wr wr wr wr wr wr wr wr wr wr wr wr wr
chapter exercises there are:
wr wr wr wr
• Two progress tests with solutions. These tests comprise multiple-choice questions, missing- word
wr wr wr wr wr wr wr wr wr wr wr
questions and questions that are similar to the end-of-chapter exercises. One test corresponds to
wr wr wr wr wr wr wr wr wr wr wr wr wr wr
Chapters 1 to 5, and the other to Chapters 6 to 12.
wr wr wr wr wr wr wr wr wr wr wr wr
• Supplementary questions (10 of them) with solutions. wr wr wr wr wr wr
• Tutorial/seminarquestionswithsolutions. w
r w
r w
r
None of this material, except the case study comments, is accessible to students. On the
wr wr wr wr wr wr wr wr wr wr wr wr wr wr
wr student website, there are five types of material:
wr wr wr wr wr wr wr
• Revision exercises, similar in style to theend-of-chapter exercises, with solutions.
wr wr wr wr wr wr wr wr wr wr
• Multiple-choice questions, typically 10 for each chapter. These are intended to be tackled online, wr wr wr wr wr wr wr wr wr wr wr wr wr
where they will be automatically graded.
wr wr wr wr wr wr
• Missing-word questions, typically 10 for each chapter. These too can be attempted and graded wr wr wr wr wr wr wr wr wr wr wr wr wr
online.
wr
The multiple-choice questions and missing-word questions are intended to provide students with a quick
wr wr wr wr wr wr wr wr wr wr wr wr wr
assessment of their mastery of the material of each chapter.
wr wr wr wr wr wr wr wr wr wr
The solutions to all of this material, except to the multiple-choice and missing-word questions, are fully
wr wr wr wr wr wr wr wr wr wr wr wr wr wr wr
annotated in order to give the necessary feedback to students.
wr wr wr wr wr wr wr wr wr wr
We intend to expand the number and scope of the practice/assessment materials on a continuing basis.
wr wr wr wr wr wr wr wr wr wr wr wr wr wr wr
We hope that you and your students will find the book both accessible and interesting. We should much
wr wr wr wr wr wr wr wr wr wr wr wr wr wr wr wr wr
appreciate any suggestions you may have on how the book and supplementary material may be
wr wr wr wr wr wr wr wr wr wr wr wr wr wr wr
improved.
wr
Peter Atrill wr
EddieMcLaney
wr r
w
