Solution Manual for Management
Accounting for Decision Makers:
11th Edition By Peter Atrill, Eddie
, M cLaney All Chapters 1 - 12
TABLE OF CONTENTS
1. Introduction to management accounting
2. Relevant costs and benefits for decision making
3. Cost–volume–profit analysis
4. Full costing
5. Costing and cost management in a competitive environment
6. Budgeting
7. Accounting for control
8. Making capital investment decisions
9. Managing risk
10.Strategic management accounting: performance evaluation and pricing in
a competitive environment
11.Measuring divisional performance
12.Managing working capital
, SECT ION A
Authors’ note to tutors
Using the book
The book is designed to provide readers with a sound introduction to management accounting. It
assumes no previous knowledge of the subject and recognises that students using it may come from
a wide variety of backgrounds. The book, therefore, tries to avoid technical jargon and does not
assume a high level of numerical ability from students. It has been class tested by students on various
courses and we have modified and refined the material to take account of their comments. We have
also taken account of the comments made by lecturers who used the first nine editions of the book
and of specially commissioned reviews.
The book aims to encourage an active approach to learning by providing activities and self-assessment
questions at appropriate points. This approach is designed to stimulate thought concerning particular
issues and to give the readers the opportunity to test their understanding of the principles covered.
The book is supplemented by a password-controlled lecturers’ website and a student website available
to all readers.
The structure of the book allows the tutor to deliver the subject in a number of ways. It can be used
as recommended reading for a traditional course based on lectures and tutorials. There are critical
review questions and exercises at the end of each chapter that can be used as the basis for tutorials. It
could also provide the basis for a distance learning approach for part-time or off-campus students. For
these students, the interactive nature of the book may be extremely useful where access to a tutor is
restricted. The book can also be used as the basis for an open learning approach for full-time campus-
based students. We have successfully used it in this way at the University of Plymouth Business
School. Accounting ‘surgeries’ have also been provided to give students the opportunity for one-to-
one help with any problems they face.
The book is appropriate for modules that are designed to be covered in 100 to 150 hours of study. For
full-time students, this will often be covered in one academic year.
PowerPoint slides
The diagrams in the book, along with other diagrams and materials, are available as PowerPoint slides
to help in delivering lectures and tutorials and these can be downloaded from the lecturers’ website.
Practice/assessment material
The activities, whose solutions immediately follow them, and self-assessment questions, whose
solutions are at the end of the book, form an integral part of it. In addition, there are various other
, practice/assessment materials. At the end of each chapter there are four critical review questions.
These are short, narrative questions involving recall, explanation and brief discussion. The solutions
to these are given at the end of the book. At the end of all chapters, except Chapter 1 (where there are
two), there are eight exercises. These are questions, many involving calculations, which are similar
in nature to examination-style questions. The solutions to five of these are given at the end of the
book and are, therefore, accessible to students. Solutions to the other three are in the following pages
of this manual and are not accessible to students.
On the lecturers’ website, in addition to this Instructor’s Manual with solutions to selected end-of-
chapter exercises there are:
Two progress tests with solutions. These tests comprise multiple-choice questions, missing-
word questions and questions that are similar to the end-of-chapter exercises. One test
corresponds to Chapters 1 to 5, and the other to Chapters 6 to 12.
Supplementary questions (10 of them) with solutions.
Tutorial/seminar questions with solutions.
None of this material, except the case study comments, is accessible to students.
On the student website, there are five types of material:
Revision exercises, similar in style to the end-of-chapter exercises, with solutions.
Multiple-choice questions, typically 10 for each chapter. These are intended to be tackled online,
where they will be automatically graded.
Missing-word questions, typically 10 for each chapter. These too can be attempted and graded
online.
The multiple-choice questions and missing-word questions are intended to provide students with a
quick assessment of their mastery of the material of each chapter.
The solutions to all of this material, except to the multiple-choice and missing-word questions, are
fully annotated in order to give the necessary feedback to students.
We intend to expand the number and scope of the practice/assessment materials on a continuing basis.
We hope that you and your students will find the book both accessible and interesting. We should
much appreciate any suggestions you may have on how the book and supplementary material may be
improved.
Peter Atrill
Eddie McLaney
Accounting for Decision Makers:
11th Edition By Peter Atrill, Eddie
, M cLaney All Chapters 1 - 12
TABLE OF CONTENTS
1. Introduction to management accounting
2. Relevant costs and benefits for decision making
3. Cost–volume–profit analysis
4. Full costing
5. Costing and cost management in a competitive environment
6. Budgeting
7. Accounting for control
8. Making capital investment decisions
9. Managing risk
10.Strategic management accounting: performance evaluation and pricing in
a competitive environment
11.Measuring divisional performance
12.Managing working capital
, SECT ION A
Authors’ note to tutors
Using the book
The book is designed to provide readers with a sound introduction to management accounting. It
assumes no previous knowledge of the subject and recognises that students using it may come from
a wide variety of backgrounds. The book, therefore, tries to avoid technical jargon and does not
assume a high level of numerical ability from students. It has been class tested by students on various
courses and we have modified and refined the material to take account of their comments. We have
also taken account of the comments made by lecturers who used the first nine editions of the book
and of specially commissioned reviews.
The book aims to encourage an active approach to learning by providing activities and self-assessment
questions at appropriate points. This approach is designed to stimulate thought concerning particular
issues and to give the readers the opportunity to test their understanding of the principles covered.
The book is supplemented by a password-controlled lecturers’ website and a student website available
to all readers.
The structure of the book allows the tutor to deliver the subject in a number of ways. It can be used
as recommended reading for a traditional course based on lectures and tutorials. There are critical
review questions and exercises at the end of each chapter that can be used as the basis for tutorials. It
could also provide the basis for a distance learning approach for part-time or off-campus students. For
these students, the interactive nature of the book may be extremely useful where access to a tutor is
restricted. The book can also be used as the basis for an open learning approach for full-time campus-
based students. We have successfully used it in this way at the University of Plymouth Business
School. Accounting ‘surgeries’ have also been provided to give students the opportunity for one-to-
one help with any problems they face.
The book is appropriate for modules that are designed to be covered in 100 to 150 hours of study. For
full-time students, this will often be covered in one academic year.
PowerPoint slides
The diagrams in the book, along with other diagrams and materials, are available as PowerPoint slides
to help in delivering lectures and tutorials and these can be downloaded from the lecturers’ website.
Practice/assessment material
The activities, whose solutions immediately follow them, and self-assessment questions, whose
solutions are at the end of the book, form an integral part of it. In addition, there are various other
, practice/assessment materials. At the end of each chapter there are four critical review questions.
These are short, narrative questions involving recall, explanation and brief discussion. The solutions
to these are given at the end of the book. At the end of all chapters, except Chapter 1 (where there are
two), there are eight exercises. These are questions, many involving calculations, which are similar
in nature to examination-style questions. The solutions to five of these are given at the end of the
book and are, therefore, accessible to students. Solutions to the other three are in the following pages
of this manual and are not accessible to students.
On the lecturers’ website, in addition to this Instructor’s Manual with solutions to selected end-of-
chapter exercises there are:
Two progress tests with solutions. These tests comprise multiple-choice questions, missing-
word questions and questions that are similar to the end-of-chapter exercises. One test
corresponds to Chapters 1 to 5, and the other to Chapters 6 to 12.
Supplementary questions (10 of them) with solutions.
Tutorial/seminar questions with solutions.
None of this material, except the case study comments, is accessible to students.
On the student website, there are five types of material:
Revision exercises, similar in style to the end-of-chapter exercises, with solutions.
Multiple-choice questions, typically 10 for each chapter. These are intended to be tackled online,
where they will be automatically graded.
Missing-word questions, typically 10 for each chapter. These too can be attempted and graded
online.
The multiple-choice questions and missing-word questions are intended to provide students with a
quick assessment of their mastery of the material of each chapter.
The solutions to all of this material, except to the multiple-choice and missing-word questions, are
fully annotated in order to give the necessary feedback to students.
We intend to expand the number and scope of the practice/assessment materials on a continuing basis.
We hope that you and your students will find the book both accessible and interesting. We should
much appreciate any suggestions you may have on how the book and supplementary material may be
improved.
Peter Atrill
Eddie McLaney
