Solution Manual for Managerial Accounting,
n n n n
18th Editionn
By Ray Garrison, Eric Noreen and Peter Brewer
n n n n n n n
Verified Chapter's 1 - 16 | Complete
n n n n n n
,Table of Contents
n n
ChapternOne:nManagerialnAccountingnandnCostnConcepts
ChapternTwo:nJob-OrdernCosting:nCalculatingnUnitnProductnCosts
ChapternThree:nJob-OrdernCosting:nCostnFlowsnandnExternalnReporting
ChapternFour:nProcessnCosting
ChapternFive:nCost-Volume-ProfitnRelationships
ChapternSix:nVariablenCostingnandnSegmentnReporting:nToolsnfornManagement
ChapternSeven:nActivity-BasednCosting:nAnToolntonAidnDecisionnMaking
ChapternEight:nMasternBudgeting
ChapternNine:nFlexiblenBudgetsnandnPerformancenAnalysis
ChapternTen:nStandardnCostsnandnVariances
ChapternEleven:nResponsibilitynAccountingnSystems
ChapternTwelve:nStrategicnPerformancenMeasurement
ChapternThirteen:nDifferentialnAnalysis:nThenKeyntonDecisionnMaking
ChapternFourteen:nCapitalnBudgetingnDecisions
ChapternFifteen:nStatementnofnCashnFlows
ChapternSixteen:nFinancialnStatementnAnalysis
,Chapter 1 n
Managerial Accounting and Cost Concepts
n n n n
Questions
1-1 nThenthreenmajorntypes nofnproduct ncosts 1-4
ninnanmanufacturing ncompanynarendirectnmateri a. Variablencost:nThenvariablencostnpernunitnisn
als,ndirectnlabor,nandnmanufacturingnoverhead. constant,nbutntotalnvariablencostnchangesninn
directnproportionntonchangesninnvolume.
1-2 b. Fixedncost:nThentotalnfixedncostnisnconstantnwi
a. Directnmaterialsnarenannintegralnpartnofnan thinnthenrelevantnrange.nThenaveragenfixednco
finishednproductnandntheirncostsncannbenconveni stnpernunitnvariesninverselynwithnchangesn innv
entlyntracedntonit. olume.
b. Indirectnmaterialsnarengenerallynsmallnitem c. Mixedncost:nAnmixedncostncontainsnbothn
snofnmaterialnsuchnasngluenandnnails.nTheynmaynb variablenandnfixedncostnelements.
enannintegralnpartnofnanfinishednproductnbutntheirnc
ostsncannbentracedntonthenproductnonlynatngreatnc 1-5
ostnorninconvenience. a. Unitnfixedncostsndecreasenasnthenactivitynleveln
c. Directnlabornconsistsnofnlaborncostsnthatn increases.
cannbeneasilyntracedntonparticularnproducts. b. Unitnvariablencostsnremainnconstantnasnthen
Directnlabornisnalsoncalledn―touchnlabor.‖ activitynlevelnincreases.
d. Indirectnlabornconsistsnofnthenlaborncostsn c. Totalnfixedncostsnremainnconstantnasnthen
ofnjanitors,nsupervisors,nmaterialsnhandlers,nandn activitynlevelnincreases.
othernfactorynworkersnthatncannotnbenconvenien d. Totalnvariablencostsnincreasenasnthenactivityn
tlyntracedntonparticularnproducts.nThesenlabornco levelnincreases.
stsnarenincurredntonsupportnproduction,nbutnthen
workersninvolvedndonnotndirectlynworknonnthenpr 1-6
oduct. a. Costnbehavior:nCostnbehaviornrefersntonthen
e. Manufacturingnoverheadnincludesnallnman wayninnwhichncostsnchangeninnresponsentonc
ufacturingncostsnexceptndirectnmaterialsnandndire hangesninnanmeasurenofnactivitynsuchnasnsal
ctnlabor.nConsequently,nmanufacturingnoverhead esnvolume,nproductionnvolume,nornordersnpr
nincludesnindirectnmaterialsnandnindirectnlabornasn ocessed.
wellnasnothernmanufacturingncosts. b. Relevantnrange:nThenrelevantnrangenisnthen
rangenofnactivitynwithinnwhichnassumptionsn
1-3 aboutnvariablenandnfixedncostnbehaviornaren
Anproductncostnisnanyncostninvolvedninnpu valid.
rchasingnornmanufacturingngoods.nInnthencasenofn
manufacturedngoods,nthesencostsnconsistnofndire 1-7 Annactivitynbasenisnanmeasurenofnwha
ctnmaterials,ndirectnlabor,nandnmanufacturingnove teverncausesnthenincurrencenofnanvariablencost
rhead.nAnperiodncostnisnancostnthatnisntakenndirectl .nExamplesnofnactivitynbasesnincludenunitsnpro
yntonthenincomenstatementnasnannexpenseninnthen duced,nunitsnsold,nlettersntyped,nbedsninnanhos
periodninnwhichnitnisnincurred. pital,nmealsnservedninnancafe,nservicencallsnma
de,netc.
1-8 Thenlinearnassumptionnisnreasonablynvali
, dnprovidingnthatnthencostnformulanisnusednonlynwi
thinnthenrelevantnrange.
n n n n
18th Editionn
By Ray Garrison, Eric Noreen and Peter Brewer
n n n n n n n
Verified Chapter's 1 - 16 | Complete
n n n n n n
,Table of Contents
n n
ChapternOne:nManagerialnAccountingnandnCostnConcepts
ChapternTwo:nJob-OrdernCosting:nCalculatingnUnitnProductnCosts
ChapternThree:nJob-OrdernCosting:nCostnFlowsnandnExternalnReporting
ChapternFour:nProcessnCosting
ChapternFive:nCost-Volume-ProfitnRelationships
ChapternSix:nVariablenCostingnandnSegmentnReporting:nToolsnfornManagement
ChapternSeven:nActivity-BasednCosting:nAnToolntonAidnDecisionnMaking
ChapternEight:nMasternBudgeting
ChapternNine:nFlexiblenBudgetsnandnPerformancenAnalysis
ChapternTen:nStandardnCostsnandnVariances
ChapternEleven:nResponsibilitynAccountingnSystems
ChapternTwelve:nStrategicnPerformancenMeasurement
ChapternThirteen:nDifferentialnAnalysis:nThenKeyntonDecisionnMaking
ChapternFourteen:nCapitalnBudgetingnDecisions
ChapternFifteen:nStatementnofnCashnFlows
ChapternSixteen:nFinancialnStatementnAnalysis
,Chapter 1 n
Managerial Accounting and Cost Concepts
n n n n
Questions
1-1 nThenthreenmajorntypes nofnproduct ncosts 1-4
ninnanmanufacturing ncompanynarendirectnmateri a. Variablencost:nThenvariablencostnpernunitnisn
als,ndirectnlabor,nandnmanufacturingnoverhead. constant,nbutntotalnvariablencostnchangesninn
directnproportionntonchangesninnvolume.
1-2 b. Fixedncost:nThentotalnfixedncostnisnconstantnwi
a. Directnmaterialsnarenannintegralnpartnofnan thinnthenrelevantnrange.nThenaveragenfixednco
finishednproductnandntheirncostsncannbenconveni stnpernunitnvariesninverselynwithnchangesn innv
entlyntracedntonit. olume.
b. Indirectnmaterialsnarengenerallynsmallnitem c. Mixedncost:nAnmixedncostncontainsnbothn
snofnmaterialnsuchnasngluenandnnails.nTheynmaynb variablenandnfixedncostnelements.
enannintegralnpartnofnanfinishednproductnbutntheirnc
ostsncannbentracedntonthenproductnonlynatngreatnc 1-5
ostnorninconvenience. a. Unitnfixedncostsndecreasenasnthenactivitynleveln
c. Directnlabornconsistsnofnlaborncostsnthatn increases.
cannbeneasilyntracedntonparticularnproducts. b. Unitnvariablencostsnremainnconstantnasnthen
Directnlabornisnalsoncalledn―touchnlabor.‖ activitynlevelnincreases.
d. Indirectnlabornconsistsnofnthenlaborncostsn c. Totalnfixedncostsnremainnconstantnasnthen
ofnjanitors,nsupervisors,nmaterialsnhandlers,nandn activitynlevelnincreases.
othernfactorynworkersnthatncannotnbenconvenien d. Totalnvariablencostsnincreasenasnthenactivityn
tlyntracedntonparticularnproducts.nThesenlabornco levelnincreases.
stsnarenincurredntonsupportnproduction,nbutnthen
workersninvolvedndonnotndirectlynworknonnthenpr 1-6
oduct. a. Costnbehavior:nCostnbehaviornrefersntonthen
e. Manufacturingnoverheadnincludesnallnman wayninnwhichncostsnchangeninnresponsentonc
ufacturingncostsnexceptndirectnmaterialsnandndire hangesninnanmeasurenofnactivitynsuchnasnsal
ctnlabor.nConsequently,nmanufacturingnoverhead esnvolume,nproductionnvolume,nornordersnpr
nincludesnindirectnmaterialsnandnindirectnlabornasn ocessed.
wellnasnothernmanufacturingncosts. b. Relevantnrange:nThenrelevantnrangenisnthen
rangenofnactivitynwithinnwhichnassumptionsn
1-3 aboutnvariablenandnfixedncostnbehaviornaren
Anproductncostnisnanyncostninvolvedninnpu valid.
rchasingnornmanufacturingngoods.nInnthencasenofn
manufacturedngoods,nthesencostsnconsistnofndire 1-7 Annactivitynbasenisnanmeasurenofnwha
ctnmaterials,ndirectnlabor,nandnmanufacturingnove teverncausesnthenincurrencenofnanvariablencost
rhead.nAnperiodncostnisnancostnthatnisntakenndirectl .nExamplesnofnactivitynbasesnincludenunitsnpro
yntonthenincomenstatementnasnannexpenseninnthen duced,nunitsnsold,nlettersntyped,nbedsninnanhos
periodninnwhichnitnisnincurred. pital,nmealsnservedninnancafe,nservicencallsnma
de,netc.
1-8 Thenlinearnassumptionnisnreasonablynvali
, dnprovidingnthatnthencostnformulanisnusednonlynwi
thinnthenrelevantnrange.
