[Type the document title]
SOLUTION MANUAL FOR FUNDAMENTAL
MANAGERIAL ACCOUNTING CONCEPTS 10TH EDITION
BY THOMAS EDMONDS, CHRISTOPHER EDMONDS
AND MARK EDMONDS ALL CHAPTERS 1-14 LATEST
UPDATE 2025/2026 A+
1
, [Type the document title]
ANSWERS TO QUESTIONS - CHAPTER 1
1. Financial Accounting Deals With Regulated, Historical, Financial Information That
Pertains To The Whole Company And Is Designed Primarily To Meet The
Information Needs Of Outsiders. Managerial Accounting Is Concerned With
Unregulated Financial, Economic, And Nonfinancial Data, Which Pertains More To
The Sub-Units Of The Organization, That Is Current And Future Oriented, And That
Is Designed Primarily To Meet The Information Needs Of Insiders.
2. The Value-Added Principle Means That Management Accountants Are Free To
Engage In Any Information Gathering And Reporting Activity So Long As The
Activity Adds Value In Excess Of Its Cost. Estimates Of Future Product Costs Are
Permissible In Managerial Accounting Reports For Budgeting And Product Costing
But Would Not Be Allowed By Financial Regulations In Financial Accounting.
3. The Two Dimensions Of The TQM Program Are: (1) Management Should Follow A
Continuous, Systematic Problem-Solving Philosophy That Encourages
Achievement Of Zero Defects In Production And Engages All Employees To
Eliminate Waste And Errors And To Simplify The Design And Delivery Of Products
And Services To Customers, And (2) Organizations Need A Strong Commitment To
Customer Satisfaction. TQM Is Being Used In Business To Maintain Profitability In
An Increasingly Competitive Global Market. In This Environment, Profit Margins
Are Tight, And Therefore, Inefficiencies Can More Easily Erode Business Profits.
To Eliminate Waste, Errors, And Dissatisfied Customers, Information Must Be
Timely And Relevant In Order To Prevent Or Discover And Correct Mistakes
Immediately.
2
, [Type the document title]
4. Both Financial And Managerial Accountants Need Cost Information About The
Company’s Products And Services. In Managerial Accounting Cost Information Is
Useful In Product Pricing Decisions And Is An Essential Part Of Cost Control
(Comparing Actual Product Cost To Budgeted Product Cost To Assess Needed
Improvement) And Performance Evaluation (Assess Managers’ Success In
Controlling And Eliminating Unnecessary Cost). In Financial Accounting, Cost
Information About The Product Is Needed To Determine Ending Inventory On The
Balance Sheet And Cost Of Goods Sold On The Income Statement. Product Costing
In Financial Accounting Can Impact The Decisions Of Not Only Managers But Also
Outsiders Such As Investors, Creditors, And Taxing Authorities. Product Costing
Information In Managerial Accounting Can Affect The Product’s Selling Price As
Well As Management’s Decisions As To Whether Cost Correction Changes Are
Needed.
5. Costs Are Assets Used In The Process Of Earning Revenue But Not All Costs Of
The Earning Process Are Used In The Same Period In Which They Are Incurred.
Therefore, A Cost That Is Used In The Process Of Earning Revenue Is Recorded As
An Expense (E.G. Administrative Salaries And Product Cost For Products Sold)
And A Cost That Has Future Benefit In The Earning Process Is Recorded As An
Asset In The Period That It Is Incurred.
6. The Cash Paid To Production Workers Has Not Been Used To Produce Revenue
But To Produce Inventory. The Revenue Is Earned When The Inventory Is Sold At
Which Time The Cost Of Salaries Associated With Those Products Sold Should Be
Expensed As Cost Of Goods Sold.
3
, [Type the document title]
7. Product Costs Associated With Goods That Have Not Been Sold Are Recorded In
The Account Called Inventory. Inventory Cost Is Shown On The Balance Sheet As
An Asset. The Amount Of Total Assets And Net Income Will Be Higher If A Product
Cost Is Classified As An Asset Than If It Is Expensed. Product Cost Associated With
Goods That Have Been Sold Should Be Recorded In The Account Called Cost Of
Goods Sold. Cost Of Goods Sold Is An Expense Shown On The Income Statement.
The Amount Of Total Assets And Net Income Will Be Lower If A Product Cost Is
Classified As An Expense As Opposed To Being Classified As An Asset.
8. An Indirect Product Cost Cannot Be Easily Or Economically Traced To A Specific
Product. Product Costs That Would Be Considered Indirect Include Costs Such As
Production Supplies, Salaries Of Production Supervisors, And Depreciation, Rent,
And Utilities On Factory Facilities.
9. Product Costs Are All Costs Incurred To Obtain A Product Or Provide A Service.
These Costs Are Treated As Assets, Recorded In Inventory, And Expensed When
The Associated Products Are Sold. Period Costs Are All Costs Not Associated With
A Product. They Are Associated With The General, Selling, And Administrative
Functions Of The Business And Most Are Expensed In The Period In Which The
Associated Economic Sacrifice Is Made. A Product Cost Would Be The Cost Of
Direct Materials Used In The Production Of A Product. A Period Cost Would Be
Rent On Administrative Facilities.
4
SOLUTION MANUAL FOR FUNDAMENTAL
MANAGERIAL ACCOUNTING CONCEPTS 10TH EDITION
BY THOMAS EDMONDS, CHRISTOPHER EDMONDS
AND MARK EDMONDS ALL CHAPTERS 1-14 LATEST
UPDATE 2025/2026 A+
1
, [Type the document title]
ANSWERS TO QUESTIONS - CHAPTER 1
1. Financial Accounting Deals With Regulated, Historical, Financial Information That
Pertains To The Whole Company And Is Designed Primarily To Meet The
Information Needs Of Outsiders. Managerial Accounting Is Concerned With
Unregulated Financial, Economic, And Nonfinancial Data, Which Pertains More To
The Sub-Units Of The Organization, That Is Current And Future Oriented, And That
Is Designed Primarily To Meet The Information Needs Of Insiders.
2. The Value-Added Principle Means That Management Accountants Are Free To
Engage In Any Information Gathering And Reporting Activity So Long As The
Activity Adds Value In Excess Of Its Cost. Estimates Of Future Product Costs Are
Permissible In Managerial Accounting Reports For Budgeting And Product Costing
But Would Not Be Allowed By Financial Regulations In Financial Accounting.
3. The Two Dimensions Of The TQM Program Are: (1) Management Should Follow A
Continuous, Systematic Problem-Solving Philosophy That Encourages
Achievement Of Zero Defects In Production And Engages All Employees To
Eliminate Waste And Errors And To Simplify The Design And Delivery Of Products
And Services To Customers, And (2) Organizations Need A Strong Commitment To
Customer Satisfaction. TQM Is Being Used In Business To Maintain Profitability In
An Increasingly Competitive Global Market. In This Environment, Profit Margins
Are Tight, And Therefore, Inefficiencies Can More Easily Erode Business Profits.
To Eliminate Waste, Errors, And Dissatisfied Customers, Information Must Be
Timely And Relevant In Order To Prevent Or Discover And Correct Mistakes
Immediately.
2
, [Type the document title]
4. Both Financial And Managerial Accountants Need Cost Information About The
Company’s Products And Services. In Managerial Accounting Cost Information Is
Useful In Product Pricing Decisions And Is An Essential Part Of Cost Control
(Comparing Actual Product Cost To Budgeted Product Cost To Assess Needed
Improvement) And Performance Evaluation (Assess Managers’ Success In
Controlling And Eliminating Unnecessary Cost). In Financial Accounting, Cost
Information About The Product Is Needed To Determine Ending Inventory On The
Balance Sheet And Cost Of Goods Sold On The Income Statement. Product Costing
In Financial Accounting Can Impact The Decisions Of Not Only Managers But Also
Outsiders Such As Investors, Creditors, And Taxing Authorities. Product Costing
Information In Managerial Accounting Can Affect The Product’s Selling Price As
Well As Management’s Decisions As To Whether Cost Correction Changes Are
Needed.
5. Costs Are Assets Used In The Process Of Earning Revenue But Not All Costs Of
The Earning Process Are Used In The Same Period In Which They Are Incurred.
Therefore, A Cost That Is Used In The Process Of Earning Revenue Is Recorded As
An Expense (E.G. Administrative Salaries And Product Cost For Products Sold)
And A Cost That Has Future Benefit In The Earning Process Is Recorded As An
Asset In The Period That It Is Incurred.
6. The Cash Paid To Production Workers Has Not Been Used To Produce Revenue
But To Produce Inventory. The Revenue Is Earned When The Inventory Is Sold At
Which Time The Cost Of Salaries Associated With Those Products Sold Should Be
Expensed As Cost Of Goods Sold.
3
, [Type the document title]
7. Product Costs Associated With Goods That Have Not Been Sold Are Recorded In
The Account Called Inventory. Inventory Cost Is Shown On The Balance Sheet As
An Asset. The Amount Of Total Assets And Net Income Will Be Higher If A Product
Cost Is Classified As An Asset Than If It Is Expensed. Product Cost Associated With
Goods That Have Been Sold Should Be Recorded In The Account Called Cost Of
Goods Sold. Cost Of Goods Sold Is An Expense Shown On The Income Statement.
The Amount Of Total Assets And Net Income Will Be Lower If A Product Cost Is
Classified As An Expense As Opposed To Being Classified As An Asset.
8. An Indirect Product Cost Cannot Be Easily Or Economically Traced To A Specific
Product. Product Costs That Would Be Considered Indirect Include Costs Such As
Production Supplies, Salaries Of Production Supervisors, And Depreciation, Rent,
And Utilities On Factory Facilities.
9. Product Costs Are All Costs Incurred To Obtain A Product Or Provide A Service.
These Costs Are Treated As Assets, Recorded In Inventory, And Expensed When
The Associated Products Are Sold. Period Costs Are All Costs Not Associated With
A Product. They Are Associated With The General, Selling, And Administrative
Functions Of The Business And Most Are Expensed In The Period In Which The
Associated Economic Sacrifice Is Made. A Product Cost Would Be The Cost Of
Direct Materials Used In The Production Of A Product. A Period Cost Would Be
Rent On Administrative Facilities.
4
