Solution Manual for Managerial Accounting,
c c c c
18th Editionc
By Ray Garrison, Eric Noreen and Peter Brewer
c c c c c c c
Verified Chapter's 1 - 16 | Complete
c c c c c c
,Table of Contents
c c
Chapter cOne: cManagerial cAccounting cand cCost cConcepts
Chapter cTwo: cJob-Order cCosting: cCalculating cUnit cProduct cCosts
Chapter cThree: cJob-Order cCosting: cCost cFlows cand cExternal cReporting
Chapter cFour: cProcess cCosting
Chapter cFive: cCost-Volume-Profit cRelationships
Chapter cSix: cVariable cCosting cand cSegment cReporting: cTools cfor cManagement
Chapter cSeven: cActivity-Based cCosting: cA cTool cto cAid cDecision cMaking
Chapter cEight: cMaster cBudgeting
Chapter cNine: cFlexible cBudgets cand cPerformance cAnalysis
Chapter cTen: cStandard cCosts cand cVariances
Chapter cEleven: cResponsibility cAccounting cSystems
Chapter cTwelve: cStrategic cPerformance cMeasurement
Chapter cThirteen: cDifferential cAnalysis: cThe cKey cto cDecision cMaking
Chapter cFourteen: cCapital cBudgeting cDecisions
Chapter cFifteen: cStatement cof cCash cFlows
Chapter cSixteen: cFinancial cStatement cAnalysis
,Chapter 1 c
Managerial Accounting and Cost Concepts
c c c c
Questions
1-1 The cthree cmajor ctypes cof cproduct 1-4
ccosts cin ca cmanufacturing ccompany care cdirect a. Variable ccost: cThe cvariable ccost cper cunit
cmaterials, cdirect clabor, cand cmanufacturing cis cconstant, cbut ctotal cvariable ccost
coverhead. cchanges cin cdirect cproportion cto cchanges
cin cvolume.
1-2 b. Fixed ccost: cThe ctotal cfixed ccost cis
a. Direct cmaterials care can cintegral cpart cof cconstant cwithin cthe crelevant crange. cThe
ca cfinished cproduct cand ctheir ccosts ccan cbe caverage cfixed ccost cper cunit cvaries
cconveniently ctraced cto cit. cinversely cwith cchanges c in cvolume.
b. Indirect cmaterials care cgenerally csmall c. Mixed ccost: cA cmixed ccost ccontains
citems cof cmaterial csuch cas cglue cand cnails. cboth cvariable cand cfixed ccost
cThey cmay cbe can cintegral cpart cof ca cfinished celements.
cproduct cbut ctheir ccosts ccan cbe ctraced cto cthe
cproduct conly cat cgreat ccost cor cinconvenience. 1-5
c. Direct clabor cconsists cof clabor ccosts a. Unit cfixed ccosts cdecrease cas cthe cactivity
cthat ccan cbe ceasily ctraced cto cparticular clevel cincreases.
cproducts. b. Unit cvariable ccosts cremain cconstant cas
Direct clabor cis calso ccalled c―touch clabor.‖ cthe cactivity clevel cincreases.
d. Indirect clabor cconsists cof cthe clabor c. Total cfixed ccosts cremain cconstant cas
ccosts cof cjanitors, csupervisors, cmaterials cthe cactivity clevel cincreases.
chandlers, cand cother cfactory cworkers cthat d. Total cvariable ccosts cincrease cas cthe
ccannot cbe cconveniently ctraced cto cparticular cactivity clevel cincreases.
cproducts. cThese clabor ccosts care cincurred cto
csupport cproduction, cbut cthe cworkers cinvolved 1-6
cdo cnot cdirectly cwork con cthe cproduct. a. Cost cbehavior: cCost cbehavior crefers cto
e. Manufacturing coverhead cincludes call cthe cway cin cwhich ccosts cchange cin
cmanufacturing ccosts cexcept cdirect cmaterials cresponse cto cchanges cin ca cmeasure cof
cand cdirect clabor. cConsequently, cmanufacturing cactivity csuch cas csales cvolume, cproduction
coverhead cincludes cindirect cmaterials cand cvolume, cor corders cprocessed.
cindirect clabor cas cwell cas cother cmanufacturing b. Relevant crange: cThe crelevant crange cis
ccosts. cthe crange cof cactivity cwithin cwhich
cassumptions cabout cvariable cand cfixed
1-3 A cproduct ccost cis cany ccost cinvolved cin ccost cbehavior care cvalid.
cpurchasing cor cmanufacturing cgoods. cIn cthe
ccase cof cmanufactured cgoods, cthese ccosts 1-7 An cactivity cbase cis ca cmeasure cof
cconsist cof cdirect cmaterials, cdirect clabor, cand cwhatever ccauses cthe cincurrence cof ca
cmanufacturing coverhead. cA cperiod ccost cis ca cvariable ccost. cExamples cof cactivity cbases
ccost cthat cis ctaken cdirectly cto cthe cincome cinclude cunits cproduced, cunits csold, cletters
cstatement cas can cexpense cin cthe cperiod cin ctyped, cbeds cin ca chospital, cmeals cserved cin
cwhich cit cis cincurred. ca ccafe, cservice ccalls cmade, cetc.
, 1-8 The clinear cassumption cis creasonably
cvalid cproviding cthat cthe ccost cformula cis cused
conly cwithin cthe crelevant crange.
c c c c
18th Editionc
By Ray Garrison, Eric Noreen and Peter Brewer
c c c c c c c
Verified Chapter's 1 - 16 | Complete
c c c c c c
,Table of Contents
c c
Chapter cOne: cManagerial cAccounting cand cCost cConcepts
Chapter cTwo: cJob-Order cCosting: cCalculating cUnit cProduct cCosts
Chapter cThree: cJob-Order cCosting: cCost cFlows cand cExternal cReporting
Chapter cFour: cProcess cCosting
Chapter cFive: cCost-Volume-Profit cRelationships
Chapter cSix: cVariable cCosting cand cSegment cReporting: cTools cfor cManagement
Chapter cSeven: cActivity-Based cCosting: cA cTool cto cAid cDecision cMaking
Chapter cEight: cMaster cBudgeting
Chapter cNine: cFlexible cBudgets cand cPerformance cAnalysis
Chapter cTen: cStandard cCosts cand cVariances
Chapter cEleven: cResponsibility cAccounting cSystems
Chapter cTwelve: cStrategic cPerformance cMeasurement
Chapter cThirteen: cDifferential cAnalysis: cThe cKey cto cDecision cMaking
Chapter cFourteen: cCapital cBudgeting cDecisions
Chapter cFifteen: cStatement cof cCash cFlows
Chapter cSixteen: cFinancial cStatement cAnalysis
,Chapter 1 c
Managerial Accounting and Cost Concepts
c c c c
Questions
1-1 The cthree cmajor ctypes cof cproduct 1-4
ccosts cin ca cmanufacturing ccompany care cdirect a. Variable ccost: cThe cvariable ccost cper cunit
cmaterials, cdirect clabor, cand cmanufacturing cis cconstant, cbut ctotal cvariable ccost
coverhead. cchanges cin cdirect cproportion cto cchanges
cin cvolume.
1-2 b. Fixed ccost: cThe ctotal cfixed ccost cis
a. Direct cmaterials care can cintegral cpart cof cconstant cwithin cthe crelevant crange. cThe
ca cfinished cproduct cand ctheir ccosts ccan cbe caverage cfixed ccost cper cunit cvaries
cconveniently ctraced cto cit. cinversely cwith cchanges c in cvolume.
b. Indirect cmaterials care cgenerally csmall c. Mixed ccost: cA cmixed ccost ccontains
citems cof cmaterial csuch cas cglue cand cnails. cboth cvariable cand cfixed ccost
cThey cmay cbe can cintegral cpart cof ca cfinished celements.
cproduct cbut ctheir ccosts ccan cbe ctraced cto cthe
cproduct conly cat cgreat ccost cor cinconvenience. 1-5
c. Direct clabor cconsists cof clabor ccosts a. Unit cfixed ccosts cdecrease cas cthe cactivity
cthat ccan cbe ceasily ctraced cto cparticular clevel cincreases.
cproducts. b. Unit cvariable ccosts cremain cconstant cas
Direct clabor cis calso ccalled c―touch clabor.‖ cthe cactivity clevel cincreases.
d. Indirect clabor cconsists cof cthe clabor c. Total cfixed ccosts cremain cconstant cas
ccosts cof cjanitors, csupervisors, cmaterials cthe cactivity clevel cincreases.
chandlers, cand cother cfactory cworkers cthat d. Total cvariable ccosts cincrease cas cthe
ccannot cbe cconveniently ctraced cto cparticular cactivity clevel cincreases.
cproducts. cThese clabor ccosts care cincurred cto
csupport cproduction, cbut cthe cworkers cinvolved 1-6
cdo cnot cdirectly cwork con cthe cproduct. a. Cost cbehavior: cCost cbehavior crefers cto
e. Manufacturing coverhead cincludes call cthe cway cin cwhich ccosts cchange cin
cmanufacturing ccosts cexcept cdirect cmaterials cresponse cto cchanges cin ca cmeasure cof
cand cdirect clabor. cConsequently, cmanufacturing cactivity csuch cas csales cvolume, cproduction
coverhead cincludes cindirect cmaterials cand cvolume, cor corders cprocessed.
cindirect clabor cas cwell cas cother cmanufacturing b. Relevant crange: cThe crelevant crange cis
ccosts. cthe crange cof cactivity cwithin cwhich
cassumptions cabout cvariable cand cfixed
1-3 A cproduct ccost cis cany ccost cinvolved cin ccost cbehavior care cvalid.
cpurchasing cor cmanufacturing cgoods. cIn cthe
ccase cof cmanufactured cgoods, cthese ccosts 1-7 An cactivity cbase cis ca cmeasure cof
cconsist cof cdirect cmaterials, cdirect clabor, cand cwhatever ccauses cthe cincurrence cof ca
cmanufacturing coverhead. cA cperiod ccost cis ca cvariable ccost. cExamples cof cactivity cbases
ccost cthat cis ctaken cdirectly cto cthe cincome cinclude cunits cproduced, cunits csold, cletters
cstatement cas can cexpense cin cthe cperiod cin ctyped, cbeds cin ca chospital, cmeals cserved cin
cwhich cit cis cincurred. ca ccafe, cservice ccalls cmade, cetc.
, 1-8 The clinear cassumption cis creasonably
cvalid cproviding cthat cthe ccost cformula cis cused
conly cwithin cthe crelevant crange.
