Solutions Manual for Managerial Accounting 18th Edition by Ray Garrison, Eric Noreen, and Peter Brewer

Solution Manual for Managerial Accounting,
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18th Edition r r




By Ray Garrison, Eric Noreen and Peter BrewerVe
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rified Chapter's 1 - 16 | Complete
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,Table of Contents
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ChapterrOne:rManagerialr Accountingr andr Costr ConceptsrChapter

r Two:r Job-Orderr Costing:r Calculatingr Unitr Productr Costs

Chapterr Three:r Job-

Orderr Costing:r Costr Flowsr andr Externalr ReportingrChapterr Four:r Processr

Costing

Chapterr Five:r Cost-Volume-Profitr Relationships

Chapterr Six:r Variabler Costingr andr Segmentr Reporting:r Toolsr forr ManagementrC

hapterrSeven:rActivity-

BasedrCosting:rArToolr tor Aidr Decisionr MakingrChapterr Eight:r Masterr Budgetin

g

ChapterrNine:rFlexiblerBudgetsrandrPerformancerAnalysisrChapter

r Ten:r Standardr Costsr andr Variances

ChapterrEleven:rResponsibilityrAccountingrSystemsrCh

apterr Twelve:r Strategicr Performancer Measurement

Chapterr Thirteen:r Differentialr Analysis:r Ther Keyr tor Decisionr MakingrChap

terr Fourteen:r Capitalr Budgetingr Decisions

ChapterrFifteen:rStatementrofDCashrFlowsrChapte

rr Sixteen:r Financialr Statementr Analysis

,Chapter1 r




ManagerialAccountingandCostConcepts
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Questions


1-1 Therthreermajorrtypesrofrproductrcostrsri 1-4
nrarmanufacturingrcompanyrarerdirectrmatrerials a. Variabler cost:r Ther variabler costDperr unitr irsr
,rdirectrlabor,randrmanufacturingroverherad. constant,r butr totalr variabler costr changersr inr
directr proportionr tor changesr inr volurme.
1-2 b. Fixedrcost:rThertotalrfixedrcostrisrconstantrwit
a. DirectrmaterialsrareranrintegralrpartrofDrarf hinrtherrelevantrrange.rTheraveragerfixredrco
inishedrproductDandrtheirrcostsrcanrberconrvenie strperrunitDvariesrinverselyrwithrchanrgesr inr
ntlyr tracedr tor it. volume.
b. Indirectr materialsr arer generallyr smallr iterm c. Mixedrcost:rArmixedrcostrcontainsrbotrhr
sr ofr materialr suchr asr gluer andr nails.r Theyr mrayr b variabler andr fixedr costr elements.
er anr integralr partr ofDar finishedr productr butrtheirr c
ostsr canr ber tracedr tor ther productr onlyratr greatr c 1-5
ostr orr inconvenience. a. Unitr fixedr costsr decreaser asr ther activityr levrel
c. Directrlaborrconsistsrofrlaborrcostsrthratr r increases.

canrbereasilyrtracedrtorparticularrproductrs. b. Unitr variabler costsrremainr constantDasr thre
Directrlaborrisralsorcalledr―touchrlabor.‖ r activityr levelr increases.

d. Indirectr laborr consistsr ofr ther laborr costrsr c. Totalr fixedr costsr remainr constantr asr threr
ofDjanitors,rsupervisors,rmaterialsrhandlers,rarndr activityr levelr increases.
otherr factoryr workersr thatr cannotDber convrenie d. Totalr variabler costsr increaser asr ther activitryr
ntlyr tracedr tor particularr products.r Theser lraborr c levelr increases.
ostsr arer incurredr tor supportr production,rbutr ther
workersr involvedr dor notr directlyr worrkDonr ther pr 1-6
oduct. a. Costrbehavior:rCostDbehaviorrrefersrtortherw
e. Manufacturingr overheadr includesr allr marn ayr inr whichr costsr changer inr responser tror ch
ufacturingr costsr exceptr directr materialsr andr drire angesr inr ar measurer ofr activityr suchr arsrsalesr
ctDlabor.r Consequently,r manufacturingr overhread volume,rproductionrvolume,rorrordrersr proce
r includesr indirectr materialsr andr indirectr labrorr asr ssed.
wellr asr otherr manufacturingr costs. b. Relevantr range:r Ther relevantr ranger isr threr
rangerofractivityrwithinrwhichrassumptironsr
1-3 aboutrvariablerandrfixedrcostrbehavirorr arer
Ar productr costr isr anyr costDinvolvedr inrpu valid.
rchasingr orr manufacturingr goods.r Inr ther casrer ofr
manufacturedr goods,r theser costsr consistrofr dire 1-7
ctr materials,r directr labor,r andr manufacturringr ove Anr activityr baser isr ar measurer ofDwrha
rhead.r Ar periodr costr isr ar costr thatr isr trakenr direct teverr causesr ther incurrencer ofr ar variablercost.
lyr tor ther incomer statementr asr anr erxpenser inr the r Examplesr ofr activityr basesr includer unirtsr prod

r periodr inr whichr itr isr incurred. uced,r unitsr sold,r lettersr typed,r bedsrinr ar hospi
tal,r mealsr servedr inr ar cafe,r servicrer callsr mad
e,r etc.

, 1-8 Therlinearrassumptionrisrreasonablyrvrali
drprovidingrthatrthercostrformularisrusedronrlyr wit
hinr ther relevantr range.