Solution Manual for Managerial Accounting, 18th Edition by Ray Garrison, Eric Noreen, and Peter Brewer | Verified Step-by-Step Answers | Revised Edition

Solution Manual for Managerial Accounting,
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18th Edition 8f




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 8f 8f




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 8f




ManagerialAccountingand Cost Concepts f
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Questions


1-1 Thethreemajortypes ofproductcosts in a 8f 8f 8f 8f f
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manufacturing company are direct materials,
8f 8f 8f 8f 8f a. Variable cost: The variable cost per unit is 8f 8f 8f 8f 8f 8f 8f




direct labor, and manufacturing overhead.
8f 8f 8f 8f 8f constant,buttotalvariable costchangesin
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direct proportion to changes in volume.
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1-2 b. Fixed cost: The total fixed cost is constant8f 8f 8f 8f 8f 8f 8f




a. Direct materialsare anintegralpart ofa 8f 8f 8f 8f 8f 8f 8f withintherelevantrange.Theaveragefixed
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finished product and their costs can be
8f 8f 8f 8f 8f 8f 8f cost per unit varies inversely with changes in
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conveniently traced to it.
8f 8f 8f 8f volume.8f




b. Indirect materials are generally small items 8f 8f 8f 8f 8f c. Mixedcost:Amixed costcontainsboth f
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of material such as glue and nails. They maybe an
8f 8f 8f 8f 8f 8f 8f 8f 8f 8f 8f variable and fixed cost elements.
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integralpart of a finishedproduct but their costs can
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be traced to the product only at great cost or
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inconvenience.
8f a. Unit fixedcostsdecrease as theactivitylevel
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c. Directlaborconsists oflaborcoststhat can 8f 8f 8f 8f 8f 8f 8f increases.
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be easily traced to particular products.
8f 8f 8f 8f 8f 8f b. Unitvariablecostsremainconstantas the
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Direct labor is also called ―touch labor.‖
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activity level increases.
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d. Indirect labor consists of the labor costs of 8f 8f 8f 8f 8f 8f 8f c. Totalfixedcostsremainconstantas the 8f 8f 8f 8f 8f 8f




janitors,supervisors,materialshandlers,and
f
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other factory workers that cannot be conveniently
8f 8f 8f 8f 8f 8f 8f d. Totalvariablecosts increaseastheactivity
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traced to particular products. These labor costs
8f 8f 8f 8f 8f 8f 8f level increases.
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are incurred to support production, but the
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workers involved do not directly work on the
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product.
8f a. Cost behavior: Cost behavior refers to the
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e. Manufacturing overhead includes all 8f 8f 8f way in which costs change in response to
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manufacturing costs except direct materials and
8f 8f 8f 8f 8f 8f changes in a measure of activity such as sales
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direct labor. Consequently, manufacturing
8f 8f 8f 8f volume,productionvolume,ororders
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overheadincludesindirectmaterialsandindirect
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labor as well as other manufacturing costs.
8f 8f 8f 8f 8f 8f 8f b. Relevant range: The relevant range is the 8f 8f 8f 8f 8f 8f




rangeofactivitywithinwhichassumptions
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1-3 A product cost is any cost involved in 8f 8f 8f 8f 8f 8f 8f about variable and fixed cost behavior are
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purchasing or manufacturing goods. In the case of
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manufactured goods, these costs consist of direct
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materials,directlabor,andmanufacturing
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8 1-7 An activity base is a measure of 8f 8f 8f 8f 8f 8f




overhead. A period cost is a cost that is taken
8f 8f 8f 8f 8f 8f 8f 8f 8f 8f whatevercauses the incurrence of a variable
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directly to the income statement as an expense in
8f 8f 8f 8f 8f 8f 8f 8f 8f cost.Examplesofactivitybases includeunits
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the period in which it is incurred.
8f 8f 8f 8f 8f 8f 8f produced, units sold, letters typed, beds in a
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hospital, meals served in a cafe, service calls
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made, etc.
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1-8 The linear assumption is reasonably valid 8f 8f 8f 8f 8f

, providingthatthecostformulais usedonly within
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the relevant range.
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