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 cconstant
a. Direct cmaterials care can cintegral cpart cof cwithin cthe crelevant crange. cThe caverage
ca cfinished cproduct cand ctheir ccosts ccan cbe cfixed ccost cper cunit cvaries cinversely cwith
cconveniently ctraced cto cit. cchanges c in cvolume.
b. Indirect cmaterials care cgenerally csmall c. Mixed ccost: cA cmixed ccost ccontains cboth
citems cof cmaterial csuch cas cglue cand cnails. cThey cvariable cand cfixed ccost celements.
cmay cbe can cintegral cpart cof ca cfinished cproduct
cbut ctheir ccosts ccan cbe ctraced cto cthe cproduct 1-5
conly cat cgreat ccost cor cinconvenience. a. Unit cfixed ccosts cdecrease cas cthe cactivity
c. Direct clabor cconsists cof clabor ccosts clevel cincreases.
cthat ccan cbe ceasily ctraced cto cparticular b. Unit cvariable ccosts cremain cconstant cas
cproducts. cthe cactivity clevel cincreases.
Direct clabor cis calso ccalled c―touch clabor.‖ c. Total cfixed ccosts cremain cconstant cas
d. Indirect clabor cconsists cof cthe clabor cthe cactivity clevel cincreases.
ccosts cof cjanitors, csupervisors, cmaterials d. Total cvariable ccosts cincrease cas cthe
chandlers, cand cother cfactory cworkers cthat cactivity clevel cincreases.
ccannot cbe cconveniently ctraced cto cparticular
cproducts. cThese clabor ccosts care cincurred cto 1-6
csupport cproduction, cbut cthe cworkers cinvolved a. Cost cbehavior: cCost cbehavior crefers cto cthe
cdo cnot cdirectly cwork con cthe cproduct. cway cin cwhich ccosts cchange cin cresponse
e. Manufacturing coverhead cincludes call cto cchanges cin ca cmeasure cof cactivity csuch
cmanufacturing ccosts cexcept cdirect cmaterials cas csales cvolume, cproduction cvolume, cor
cand cdirect clabor. cConsequently, cmanufacturing corders cprocessed.
coverhead cincludes cindirect cmaterials cand b. Relevant crange: cThe crelevant crange cis
cindirect clabor cas cwell cas cother cmanufacturing cthe crange cof cactivity cwithin cwhich
ccosts. cassumptions cabout cvariable cand cfixed
ccost cbehavior care cvalid.
1-3 A cproduct ccost cis cany ccost cinvolved cin
cpurchasing cor cmanufacturing cgoods. cIn cthe 1-7 An cactivity cbase cis ca cmeasure cof
ccase cof cmanufactured cgoods, cthese ccosts cwhatever ccauses cthe cincurrence cof ca
cconsist cof cdirect cmaterials, cdirect clabor, cand cvariable ccost. cExamples cof cactivity cbases
cmanufacturing coverhead. cA cperiod ccost cis ca cinclude cunits cproduced, cunits csold, cletters
ccost cthat cis ctaken cdirectly cto cthe cincome ctyped, cbeds cin ca chospital, cmeals cserved cin ca
cstatement cas can cexpense cin cthe cperiod cin ccafe, cservice ccalls cmade, cetc.
cwhich cit cis cincurred.
, 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 cconstant
a. Direct cmaterials care can cintegral cpart cof cwithin cthe crelevant crange. cThe caverage
ca cfinished cproduct cand ctheir ccosts ccan cbe cfixed ccost cper cunit cvaries cinversely cwith
cconveniently ctraced cto cit. cchanges c in cvolume.
b. Indirect cmaterials care cgenerally csmall c. Mixed ccost: cA cmixed ccost ccontains cboth
citems cof cmaterial csuch cas cglue cand cnails. cThey cvariable cand cfixed ccost celements.
cmay cbe can cintegral cpart cof ca cfinished cproduct
cbut ctheir ccosts ccan cbe ctraced cto cthe cproduct 1-5
conly cat cgreat ccost cor cinconvenience. a. Unit cfixed ccosts cdecrease cas cthe cactivity
c. Direct clabor cconsists cof clabor ccosts clevel cincreases.
cthat ccan cbe ceasily ctraced cto cparticular b. Unit cvariable ccosts cremain cconstant cas
cproducts. cthe cactivity clevel cincreases.
Direct clabor cis calso ccalled c―touch clabor.‖ c. Total cfixed ccosts cremain cconstant cas
d. Indirect clabor cconsists cof cthe clabor cthe cactivity clevel cincreases.
ccosts cof cjanitors, csupervisors, cmaterials d. Total cvariable ccosts cincrease cas cthe
chandlers, cand cother cfactory cworkers cthat cactivity clevel cincreases.
ccannot cbe cconveniently ctraced cto cparticular
cproducts. cThese clabor ccosts care cincurred cto 1-6
csupport cproduction, cbut cthe cworkers cinvolved a. Cost cbehavior: cCost cbehavior crefers cto cthe
cdo cnot cdirectly cwork con cthe cproduct. cway cin cwhich ccosts cchange cin cresponse
e. Manufacturing coverhead cincludes call cto cchanges cin ca cmeasure cof cactivity csuch
cmanufacturing ccosts cexcept cdirect cmaterials cas csales cvolume, cproduction cvolume, cor
cand cdirect clabor. cConsequently, cmanufacturing corders cprocessed.
coverhead cincludes cindirect cmaterials cand b. Relevant crange: cThe crelevant crange cis
cindirect clabor cas cwell cas cother cmanufacturing cthe crange cof cactivity cwithin cwhich
ccosts. cassumptions cabout cvariable cand cfixed
ccost cbehavior care cvalid.
1-3 A cproduct ccost cis cany ccost cinvolved cin
cpurchasing cor cmanufacturing cgoods. cIn cthe 1-7 An cactivity cbase cis ca cmeasure cof
ccase cof cmanufactured cgoods, cthese ccosts cwhatever ccauses cthe cincurrence cof ca
cconsist cof cdirect cmaterials, cdirect clabor, cand cvariable ccost. cExamples cof cactivity cbases
cmanufacturing coverhead. cA cperiod ccost cis ca cinclude cunits cproduced, cunits csold, cletters
ccost cthat cis ctaken cdirectly cto cthe cincome ctyped, cbeds cin ca chospital, cmeals cserved cin ca
cstatement cas can cexpense cin cthe cperiod cin ccafe, cservice ccalls cmade, cetc.
cwhich cit cis cincurred.
, 1-8 The clinear cassumption cis creasonably
cvalid cproviding cthat cthe ccost cformula cis cused
conly cwithin cthe crelevant crange.
