Managerial Accounting Tools for Business Decision Making
ss ss ss ss ss ss
SOLUTIONMANUAL ss
ManagerialAccountingToolsforBusinessDecisionMaking
s s s s s s ss
9th
ssss s s
EditionbyJerryJ.Weygandt,PaulD.Kimmel
s s s s s s s ss
Chapters1-14,Complete
s s s s
,TABLE OF CONTENTS ss ss
Chapter 1: Managerial Accounting Chap ss ss ss s s
ter 2: Job Order Costing
ss ss ss ss
Chapter 2A: Job Order Costing: Non- ss ss ss ss ss
Debit and Credit Approach Chapter 3: Process Costing
ss ss ss s s ss ss ss
Chapter 3A: Process Costing: Non- ss ss ss ss
Debit and Credit Approach Chapter 4: Activity-Based Costing
ss ss ss s s ss ss ss
Chapter 5: Cost-Volume-Profit ss ss
Chapter 6: Cost-Volume- ss ss
Profit Analysis: Additional Issues Chapter 7: Incremental Analysi
ss ss ss ss ss ss ss
s
Chapter 8: Pricing ss ss
Chapter 9: Budgetary Planning ss ss ss
Chapter 10: Budgetary Control and Responsibility Accounting C
ss ss ss ss ss ss s s
hapter 11: Standard Costs and Balanced Scorecard Chapter 1
ss ss ss ss ss ss s s ss
2: Planning for Capital Investments
ss ss ss ss
Chapter 13: Statement of Cash Flows Chass ss ss ss ss s s
pter 14: Financial Analysis
ss ss ss
, Managerial Accounting Tools for Business Decision Making ss ss ss ss ss ss
CHAPTER1 s
ManagerialAccounting s
Learning Objectives ss
1. Identify the features of managerial accounting and the functions of management.
s ss ss ss ss ss ss ss ss ss
2. Describe the classes of manufacturing costs and the differences between product and period cos
ss ss ss ss ss ss ss ss ss ss ss ss s s
ts.
3. Demonstrate how to compute cost of goods manufactured and prepare financial statements for a ma
ss ss ss ss ss ss ss ss ss ss ss ss ss s s
nufacturer.
4. Discuss trends in managerial accounting.
ss ss ss ss
ANSWERS TOQUESTIONS ss s
1. (a) Not true. Managerial accounting is a field of accounting that provides economic and financial i
ss ss ss ss ss ss ss ss ss ss ss ss ss ss s s
nformation for managers and other internal users. ss ss ss ss ss ss
(b) Joe is incorrect. Managerial accounting applies to all types of businesses—
s s s s s s s s s s s s s s s s s s s s
service, merchandising, and manufacturing. s s ss ss
LO1 BT: C Difficulty: Easy TOT: 3 min. AACSB: None AICPA FC: Measurement, Analysis and Interpretation IMA: Cost Management
s s ss s s ss s s ss ss ssss ss s s ss ss ss ss ss ss ss ss
2. (a) Financial accounting is concerned primarily with external users such as stockholders, creditors,
ss ss ss ss ss ss ss ss ss ss ss ss s
and regulators. In contrast, managerial accounting is concerned primarily with internal users
s ss ss s s ss ss ss s s ss s s s s ss
such as officers and managers.
s s ss ss ss ss
(b) Financial statements are the end product of financial accounting. These statements are prepare
ss ss ss ss ss ss ss ss ss ss ss s s
d quarterly and annually. In managerial accounting, internal reports may be prepared as fre
ss ss ss ss ss ss ss ss ss s s s s ss ss
quently as needed. ss ss
(c) The purpose of financial accounting is to provide general-
s s s s s s ss s s s s s s ss
purpose information for external users. The purpose of managerial accounting is to provi
s s s s s s s s s s s s s s s s s s s s s s s s
de special-purpose information for specific internal decisions.
s s s s s s s s ss ss
LO1 BT: C Difficulty: Easy TOT: 5 min. AACSB: None AICPA FC: Measurement, Analysis and Interpretation IMA: Cost Management
s s ss s s ss s s ss ss ssss ss s s ss ss ss ss ss ss ss ss
3. Differences in the content of the reports are as follows: ss ss ss ss ss ss ss ss ss
ss Financial Managerial ss
• Pertains to business as a whole and ishighly ss ss ss ss ss ss ss s • Pertains to subunits of the business and ss ss ss ss ss ss s s
aggregated. s may be very detailed. ss ss ss
• Limited to accrual accounting and cost data. ss ss ss ss ss ss • Extends beyond accrual
• Generallyacceptedaccountingprinciples. s s s accounting system to any relevant data. ss ss ss ss ss
Copyright © 2021 John Wiley & Sons, Inc. Weygandt, Managerial Accounting, 9e, Solutions Manual
ss ss ss ss ss ss ss ssssssss ss ss ss ss ss (For Instructor Use Only)
ss ss ss 1-1
, • Standard is relevance to decisions. ss ss ss ss
In financial accounting, financial statements are verified annually through an independent audit
s s s s s s s s s s s s s s s s s s s s s s
s by certified public accountants. There are no independent audits of internal reports prepared by
s ss ss ss ss ss ss ss ss ss ss ss ss ss
managerialaccountants.
s s s
LO1 BT: C Difficulty: Easy TOT: 5 min. AACSB: None AICPA FC: Measurement, Analysis and Interpretation IMA: Cost Management
s s ss s s ss s s ss ss ssss ss s s ss ss ss ss ss ss ss ss
4. Linda should know that the management of an organization performs three broad functions:
ss ss s ss ss ss ss ss ss ss ss ss
(1) Planning requires management to look ahead and to establish objectives. ss ss ss ss ss ss ss ss ss
(2) Directing involves coordinating the diverse activities and human resources of a company to p ss ss ss ss ss ss ss ss ss ss ss ss s s
roduce a smooth-running operation. ss ss ss
(3) Controlling is the process of keeping the company’s activities on track. ss ss ss ss ss ss ss ss ss ss
LO1 BT: C Difficulty: Easy TOT: 3 min. AACSB: None AICPA FC: Measurement, Analysis and Interpretation IMA: Cost Management
s s ss s s ss s s ss ss ssss ss s s ss ss ss ss ss ss ss ss
5. Not true. Decision-making is not a separate management function. Rather, decision-
ss ss ss ss ss ss ss ss ss ss
making involves the exercise of good judgment in performing the three management functions
ss s s s s s s s s s s s s s s s s s s s s s s s s
explained in the answer to question four above. s s s s s s ss ss ss ss
LO1 BT: C Difficulty: Easy TOT: 2 min. AACSB: None AICPA FC: Measurement, Analysis and Interpretation IMA: Cost Management
s s ss s s ss s s ss ss ssss ss s s ss ss ss ss ss ss ss ss
6. Employees with line positions are directly involved in the company’s primary revenue generating
ss ss ss ss ss ss ss ss ss s s ss ss s
soperating activities. Examples would include factory managers and supervisors, and the s s s s s s s s s s s s s s s s s s s s s s
vice president of operations. In contrast, employees with staff positions are not directly invol
s s s s s s s s s s s s s s s s s s s s s s s s s s
ved in revenue- s s s s
generating operating activities, but rather serve in a support capacity to line employees. Examples
ss ss ss ss ss ss ss ss ss ss ss ss s s s
include employees in finance, legal, and human resources.
s ss ss ss ss ss ss ss
LO1 BT: C Difficulty: Easy TOT: 3 min. AACSB: None AICPA FC: Measurement, Analysis and Interpretation IMA: Cost Management
s s ss s s ss s s ss ss ss ss s s ss ss ss ss ss sss s ss ss
Questions Chapter 1 (Continued) ss ss ss
7. The difference in balance sheets pertains to the presentation of inventories in the current asset
s s s s s s s s s s s s s s s s s s s s s s s s s s s s
s section. In a merchandising company, only inventory is shown. In a manufacturing company, three
s ss ss ss ss ss ss ss ss ss ss ss ss ss s
sinventory accounts are shown: finished goods, work in process, and raw materials.
ss ss ss ss ss ss ss ss ss ss ss
LO3 BT: C Difficulty: Easy TOT: 2 min. AACSB: None AICPA FC: Measurement, Analysis and Interpretation IMA: Cost management
s s ss s s ss s s ss ss ssss ss s s ss ss ss ss ss ss ss ss
8. Manufacturing costs are classified as either direct materials, direct labor, or manufacturing overhea ss ss ss ss ss ss ss ss ss ss ss s s
d.
LO2 BT: C Difficulty: Easy TOT: 1 min. AACSB: None AICPA FC: Measurement, Analysis and Interpretation IMA: Cost management
s s ss s s ss s s ss ss ssss ss s s ss ss ss ss ss ss ss ss
9. No, Melis not correct. The distinction betweendirect and indirect materials isbased ontwo criteria:
ss s s ss ss ss s s s ss ss ss s ss s ss
(1) physical association and (2) the convenience of making the physical association. Materialsss ss s s ss ss ss s s ss ss ss ss s
swhich cannot beeasilyassociated with thefinishedproduct areconsidered indirect materials.
s ss s s ss ss s s ss s ss ss
LO2 BT: C Difficulty: Easy TOT: 2 min. AACSB: None AICPA FC: Measurement, Analysis and Interpretation IMA: Cost management
s s ss s s ss s s ss ss ssss ss s s ss ss ss ss ss ss ss ss
10. Product costs, or inventoriable costs, are costs that are a necessary and integral part of producing th
ss ss ss ss ss ss ss ss ss ss ss ss ss s s ss s s
e finished product, they are classified as manufacturing costs. Period costs are costs that are
s s s s s s s s s s s s s s s s s s s s s s s s s s s s s
sidentified with a specific time period rather than with a salable product. These costs relate to
s s s s s s ss s s s s s s s s s s ss s s ss s s s s s s s
s nonmanufacturing activities and therefore are not inventoriable costs, they are expensed as incur s s ss ss ss ss ss ss ss s s ss s s s s
red.
LO2 BT: K Difficulty: Easy TOT: 2 min. AACSB: None AICPA FC: Measurement, Analysis and Interpretation IMA: Cost management
ss ss s s ss s s ss ss s s ss s s ss ss ss ss ss sss s ss ss
11. A merchandising company that uses the periodic inventory system reports beginning inventory, cost o
ss ss ss ss ss ss ss ss ss ss ss ss s s
f goods purchased, and ending inventory in the cost of goods section of the income statement. A ma
ss ss ss ss ss ss ss ss ss ss ss ss ss ss ss ss s s
nufacturing company reports beginning finished goods inventory, cost of goods manufactured, an
ss ss ss ss ss ss ss ss ss s s s s
d ending finished goods inventory in its determination of cost of goods sold.
ss ss ss ss ss ss ss ss ss ss ss ss
LO3 BT: C Difficulty: Easy TOT: 5 min. AACSB: None AICPA FC: Measurement, Analysis and Interpretation IMA: Cost management
s s ss s s ss s s ss ss ssss ss s s ss ss ss ss ss ss ss ss
12. (a)X = total cost of work in process.
s ss ss ss ss ss ss ss
(b) X = cost of goods manufactured. ss ss ss ss ss
LO3 BT: C Difficulty: Easy TOT: 2 min. AACSB: None AICPA FC: Measurement, Analysis and Interpretation IMA: Cost management
s s ss s s ss s s ss ss ssss ss s s ss ss ss ss ss ss ss ss
13. Raw materials inventory, beginning ......................................................................
ss ss ss ss $12,000
ss ss ss ss ss ss
SOLUTIONMANUAL ss
ManagerialAccountingToolsforBusinessDecisionMaking
s s s s s s ss
9th
ssss s s
EditionbyJerryJ.Weygandt,PaulD.Kimmel
s s s s s s s ss
Chapters1-14,Complete
s s s s
,TABLE OF CONTENTS ss ss
Chapter 1: Managerial Accounting Chap ss ss ss s s
ter 2: Job Order Costing
ss ss ss ss
Chapter 2A: Job Order Costing: Non- ss ss ss ss ss
Debit and Credit Approach Chapter 3: Process Costing
ss ss ss s s ss ss ss
Chapter 3A: Process Costing: Non- ss ss ss ss
Debit and Credit Approach Chapter 4: Activity-Based Costing
ss ss ss s s ss ss ss
Chapter 5: Cost-Volume-Profit ss ss
Chapter 6: Cost-Volume- ss ss
Profit Analysis: Additional Issues Chapter 7: Incremental Analysi
ss ss ss ss ss ss ss
s
Chapter 8: Pricing ss ss
Chapter 9: Budgetary Planning ss ss ss
Chapter 10: Budgetary Control and Responsibility Accounting C
ss ss ss ss ss ss s s
hapter 11: Standard Costs and Balanced Scorecard Chapter 1
ss ss ss ss ss ss s s ss
2: Planning for Capital Investments
ss ss ss ss
Chapter 13: Statement of Cash Flows Chass ss ss ss ss s s
pter 14: Financial Analysis
ss ss ss
, Managerial Accounting Tools for Business Decision Making ss ss ss ss ss ss
CHAPTER1 s
ManagerialAccounting s
Learning Objectives ss
1. Identify the features of managerial accounting and the functions of management.
s ss ss ss ss ss ss ss ss ss
2. Describe the classes of manufacturing costs and the differences between product and period cos
ss ss ss ss ss ss ss ss ss ss ss ss s s
ts.
3. Demonstrate how to compute cost of goods manufactured and prepare financial statements for a ma
ss ss ss ss ss ss ss ss ss ss ss ss ss s s
nufacturer.
4. Discuss trends in managerial accounting.
ss ss ss ss
ANSWERS TOQUESTIONS ss s
1. (a) Not true. Managerial accounting is a field of accounting that provides economic and financial i
ss ss ss ss ss ss ss ss ss ss ss ss ss ss s s
nformation for managers and other internal users. ss ss ss ss ss ss
(b) Joe is incorrect. Managerial accounting applies to all types of businesses—
s s s s s s s s s s s s s s s s s s s s
service, merchandising, and manufacturing. s s ss ss
LO1 BT: C Difficulty: Easy TOT: 3 min. AACSB: None AICPA FC: Measurement, Analysis and Interpretation IMA: Cost Management
s s ss s s ss s s ss ss ssss ss s s ss ss ss ss ss ss ss ss
2. (a) Financial accounting is concerned primarily with external users such as stockholders, creditors,
ss ss ss ss ss ss ss ss ss ss ss ss s
and regulators. In contrast, managerial accounting is concerned primarily with internal users
s ss ss s s ss ss ss s s ss s s s s ss
such as officers and managers.
s s ss ss ss ss
(b) Financial statements are the end product of financial accounting. These statements are prepare
ss ss ss ss ss ss ss ss ss ss ss s s
d quarterly and annually. In managerial accounting, internal reports may be prepared as fre
ss ss ss ss ss ss ss ss ss s s s s ss ss
quently as needed. ss ss
(c) The purpose of financial accounting is to provide general-
s s s s s s ss s s s s s s ss
purpose information for external users. The purpose of managerial accounting is to provi
s s s s s s s s s s s s s s s s s s s s s s s s
de special-purpose information for specific internal decisions.
s s s s s s s s ss ss
LO1 BT: C Difficulty: Easy TOT: 5 min. AACSB: None AICPA FC: Measurement, Analysis and Interpretation IMA: Cost Management
s s ss s s ss s s ss ss ssss ss s s ss ss ss ss ss ss ss ss
3. Differences in the content of the reports are as follows: ss ss ss ss ss ss ss ss ss
ss Financial Managerial ss
• Pertains to business as a whole and ishighly ss ss ss ss ss ss ss s • Pertains to subunits of the business and ss ss ss ss ss ss s s
aggregated. s may be very detailed. ss ss ss
• Limited to accrual accounting and cost data. ss ss ss ss ss ss • Extends beyond accrual
• Generallyacceptedaccountingprinciples. s s s accounting system to any relevant data. ss ss ss ss ss
Copyright © 2021 John Wiley & Sons, Inc. Weygandt, Managerial Accounting, 9e, Solutions Manual
ss ss ss ss ss ss ss ssssssss ss ss ss ss ss (For Instructor Use Only)
ss ss ss 1-1
, • Standard is relevance to decisions. ss ss ss ss
In financial accounting, financial statements are verified annually through an independent audit
s s s s s s s s s s s s s s s s s s s s s s
s by certified public accountants. There are no independent audits of internal reports prepared by
s ss ss ss ss ss ss ss ss ss ss ss ss ss
managerialaccountants.
s s s
LO1 BT: C Difficulty: Easy TOT: 5 min. AACSB: None AICPA FC: Measurement, Analysis and Interpretation IMA: Cost Management
s s ss s s ss s s ss ss ssss ss s s ss ss ss ss ss ss ss ss
4. Linda should know that the management of an organization performs three broad functions:
ss ss s ss ss ss ss ss ss ss ss ss
(1) Planning requires management to look ahead and to establish objectives. ss ss ss ss ss ss ss ss ss
(2) Directing involves coordinating the diverse activities and human resources of a company to p ss ss ss ss ss ss ss ss ss ss ss ss s s
roduce a smooth-running operation. ss ss ss
(3) Controlling is the process of keeping the company’s activities on track. ss ss ss ss ss ss ss ss ss ss
LO1 BT: C Difficulty: Easy TOT: 3 min. AACSB: None AICPA FC: Measurement, Analysis and Interpretation IMA: Cost Management
s s ss s s ss s s ss ss ssss ss s s ss ss ss ss ss ss ss ss
5. Not true. Decision-making is not a separate management function. Rather, decision-
ss ss ss ss ss ss ss ss ss ss
making involves the exercise of good judgment in performing the three management functions
ss s s s s s s s s s s s s s s s s s s s s s s s s
explained in the answer to question four above. s s s s s s ss ss ss ss
LO1 BT: C Difficulty: Easy TOT: 2 min. AACSB: None AICPA FC: Measurement, Analysis and Interpretation IMA: Cost Management
s s ss s s ss s s ss ss ssss ss s s ss ss ss ss ss ss ss ss
6. Employees with line positions are directly involved in the company’s primary revenue generating
ss ss ss ss ss ss ss ss ss s s ss ss s
soperating activities. Examples would include factory managers and supervisors, and the s s s s s s s s s s s s s s s s s s s s s s
vice president of operations. In contrast, employees with staff positions are not directly invol
s s s s s s s s s s s s s s s s s s s s s s s s s s
ved in revenue- s s s s
generating operating activities, but rather serve in a support capacity to line employees. Examples
ss ss ss ss ss ss ss ss ss ss ss ss s s s
include employees in finance, legal, and human resources.
s ss ss ss ss ss ss ss
LO1 BT: C Difficulty: Easy TOT: 3 min. AACSB: None AICPA FC: Measurement, Analysis and Interpretation IMA: Cost Management
s s ss s s ss s s ss ss ss ss s s ss ss ss ss ss sss s ss ss
Questions Chapter 1 (Continued) ss ss ss
7. The difference in balance sheets pertains to the presentation of inventories in the current asset
s s s s s s s s s s s s s s s s s s s s s s s s s s s s
s section. In a merchandising company, only inventory is shown. In a manufacturing company, three
s ss ss ss ss ss ss ss ss ss ss ss ss ss s
sinventory accounts are shown: finished goods, work in process, and raw materials.
ss ss ss ss ss ss ss ss ss ss ss
LO3 BT: C Difficulty: Easy TOT: 2 min. AACSB: None AICPA FC: Measurement, Analysis and Interpretation IMA: Cost management
s s ss s s ss s s ss ss ssss ss s s ss ss ss ss ss ss ss ss
8. Manufacturing costs are classified as either direct materials, direct labor, or manufacturing overhea ss ss ss ss ss ss ss ss ss ss ss s s
d.
LO2 BT: C Difficulty: Easy TOT: 1 min. AACSB: None AICPA FC: Measurement, Analysis and Interpretation IMA: Cost management
s s ss s s ss s s ss ss ssss ss s s ss ss ss ss ss ss ss ss
9. No, Melis not correct. The distinction betweendirect and indirect materials isbased ontwo criteria:
ss s s ss ss ss s s s ss ss ss s ss s ss
(1) physical association and (2) the convenience of making the physical association. Materialsss ss s s ss ss ss s s ss ss ss ss s
swhich cannot beeasilyassociated with thefinishedproduct areconsidered indirect materials.
s ss s s ss ss s s ss s ss ss
LO2 BT: C Difficulty: Easy TOT: 2 min. AACSB: None AICPA FC: Measurement, Analysis and Interpretation IMA: Cost management
s s ss s s ss s s ss ss ssss ss s s ss ss ss ss ss ss ss ss
10. Product costs, or inventoriable costs, are costs that are a necessary and integral part of producing th
ss ss ss ss ss ss ss ss ss ss ss ss ss s s ss s s
e finished product, they are classified as manufacturing costs. Period costs are costs that are
s s s s s s s s s s s s s s s s s s s s s s s s s s s s s
sidentified with a specific time period rather than with a salable product. These costs relate to
s s s s s s ss s s s s s s s s s s ss s s ss s s s s s s s
s nonmanufacturing activities and therefore are not inventoriable costs, they are expensed as incur s s ss ss ss ss ss ss ss s s ss s s s s
red.
LO2 BT: K Difficulty: Easy TOT: 2 min. AACSB: None AICPA FC: Measurement, Analysis and Interpretation IMA: Cost management
ss ss s s ss s s ss ss s s ss s s ss ss ss ss ss sss s ss ss
11. A merchandising company that uses the periodic inventory system reports beginning inventory, cost o
ss ss ss ss ss ss ss ss ss ss ss ss s s
f goods purchased, and ending inventory in the cost of goods section of the income statement. A ma
ss ss ss ss ss ss ss ss ss ss ss ss ss ss ss ss s s
nufacturing company reports beginning finished goods inventory, cost of goods manufactured, an
ss ss ss ss ss ss ss ss ss s s s s
d ending finished goods inventory in its determination of cost of goods sold.
ss ss ss ss ss ss ss ss ss ss ss ss
LO3 BT: C Difficulty: Easy TOT: 5 min. AACSB: None AICPA FC: Measurement, Analysis and Interpretation IMA: Cost management
s s ss s s ss s s ss ss ssss ss s s ss ss ss ss ss ss ss ss
12. (a)X = total cost of work in process.
s ss ss ss ss ss ss ss
(b) X = cost of goods manufactured. ss ss ss ss ss
LO3 BT: C Difficulty: Easy TOT: 2 min. AACSB: None AICPA FC: Measurement, Analysis and Interpretation IMA: Cost management
s s ss s s ss s s ss ss ssss ss s s ss ss ss ss ss ss ss ss
13. Raw materials inventory, beginning ......................................................................
ss ss ss ss $12,000
