Solution Manual for Managerial Accounting,
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18th Edition by Garrison, Noreen and Brewer
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Verified Chapter's 1 - 16 | Complete
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,
,Table of Contents
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ChapterbfOne:bfManagerialbfAccountingbfandbfCostbfConcepts
ChapterbfTwo:bfJob-OrderbfCosting:bfCalculatingbfUnitbfProductbfCosts
ChapterbfThree:bfJob-OrderbfCosting:bfCostbfFlowsbfandbfExternalbfReporting
ChapterbfFour:bfProcessbfCosting
ChapterbfFive:bfCost-Volume-ProfitbfRelationships
ChapterbfSix:bfVariablebfCostingbfandbfSegmentbfReporting:bfToolsbfforbfManagement
ChapterbfSeven:bfActivity-BasedbfCosting:bfAbfToolbftobfAidbfDecisionbfMaking
ChapterbfEight:bfMasterbfBudgeting
ChapterbfNine:bfFlexiblebfBudgetsbfandbfPerformancebfAnalysis
ChapterbfTen:bfStandardbfCostsbfandbfVariances
ChapterbfEleven:bfResponsibilitybfAccountingbfSystems
ChapterbfTwelve:bfStrategicbfPerformancebfMeasurement
ChapterbfThirteen:bfDifferentialbfAnalysis:bfThebfKeybftobfDecisionbfMaking
ChapterbfFourteen:bfCapitalbfBudgetingbfDecisions
ChapterbfFifteen:bfStatementbfofbfCashbfFlows
ChapterbfSixteen:bfFinancialbfStatementbfAnalysis
, Chapter 1 bf
Managerial Accounting and Cost Concepts
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Questions
1-1 Thebfthreebfmajorbftypesbfofbfproductbfcostsbfinb 1-4
fabfmanufacturingbfcompanybfarebfdirectbfmaterials,bfd a. Variablebfcost:bfThebfvariablebfcostbfperbfunitbfisbfc
irectbflabor,bfandbfmanufacturingbfoverhead. onstant,bfbutbftotalbfvariablebfcostbfchangesbfinbfdir
ectbfproportionbftobfchangesbfinbfvolume.
1-2 b. Fixedbfcost:bfThebftotalbffixedbfcostbfisbfconstantbfwith
a. Directbfmaterialsbfarebfanbfintegralbfpartbfofbfabf inbfthebfrelevantbfrange.bfThebfaveragebffixedbfcostbfp
finishedbfproductbfandbftheirbfcostsbfcanbfbebfconvenien erbfunitbfvariesbfinverselybfwithbfchangesb f inbfvolum
tlybftracedbftobfit. e.
b. Indirectbfmaterialsbfarebfgenerallybfsmallbfitemsbf c. Mixedbfcost:bfAbfmixedbfcostbfcontainsbfbothbfv
ofbfmaterialbfsuchbfasbfgluebfandbfnails.bfTheybfmaybfbebfa ariablebfandbffixedbfcostbfelements.
nbfintegralbfpartbfofbfabffinishedbfproductbfbutbftheirbfcostsb
fcanbfbebftracedbftobfthebfproductbfonlybfatbfgreatbfcostbfo 1-5
rbfinconvenience. a. Unitbffixedbfcostsbfdecreasebfasbfthebfactivitybflevelbfin
c. Directbflaborbfconsistsbfofbflaborbfcostsbfthatbfc creases.
anbfbebfeasilybftracedbftobfparticularbfproducts. b. Unitbfvariablebfcostsbfremainbfconstantbfasbfthebfac
Directbflaborbfisbfalsobfcalledbf―touchbflabor.‖ tivitybflevelbfincreases.
d. Indirectbflaborbfconsistsbfofbfthebflaborbfcostsbfof c. Totalbffixedbfcostsbfremainbfconstantbfasbfthebfac
bfjanitors,bfsupervisors,bfmaterialsbfhandlers,bfandbfotherb tivitybflevelbfincreases.
ffactorybfworkersbfthatbfcannotbfbebfconvenientlybftrace
d. Totalbfvariablebfcostsbfincreasebfasbfthebfactivitybfle
dbftobfparticularbfproducts.bfThesebflaborbfcostsbfarebfinc velbfincreases.
urredbftobfsupportbfproduction,bfbutbfthebfworkersbfinvol
vedbfdobfnotbfdirectlybfworkbfonbfthebfproduct. 1-6
e. Manufacturingbfoverheadbfincludesbfallbfmanuf
a. Costbfbehavior:bfCostbfbehaviorbfrefersbftobfthebfw
acturingbfcostsbfexceptbfdirectbfmaterialsbfandbfdirectbfla
aybfinbfwhichbfcostsbfchangebfinbfresponsebftobfchan
bor.bfConsequently,bfmanufacturingbfoverheadbfincludes
gesbfinbfabfmeasurebfofbfactivitybfsuchbfasbfsalesbfvol
bfindirectbfmaterialsbfandbfindirectbflaborbfasbfwellbfasbfot
ume,bfproductionbfvolume,bforbfordersbfprocessed.
herbfmanufacturingbfcosts.
b. Relevantbfrange:bfThebfrelevantbfrangebfisbfthebfr
1-3 angebfofbfactivitybfwithinbfwhichbfassumptionsbfabo
utbfvariablebfandbffixedbfcostbfbehaviorbfarebfvali
Abfproductbfcostbfisbfanybfcostbfinvolvedbfinbfpur
d.
chasingbforbfmanufacturingbfgoods.bfInbfthebfcasebfofbfma
nufacturedbfgoods,bfthesebfcostsbfconsistbfofbfdirectbfmat
erials,bfdirectbflabor,bfandbfmanufacturingbfoverhead.bfA 1-7 Anbfactivitybfbasebfisbfabfmeasurebfofbfwhat
bfperiodbfcostbfisbfabfcostbfthatbfisbftakenbfdirectlybftobfthebf
everbfcausesbfthebfincurrencebfofbfabfvariablebfcost.bfE
incomebfstatementbfasbfanbfexpensebfinbfthebfperiodbfinbf xamplesbfofbfactivitybfbasesbfincludebfunitsbfproduced
whichbfitbfisbfincurred. ,bfunitsbfsold,bflettersbftyped,bfbedsbfinbfabfhospital,bfm
ealsbfservedbfinbfabfcafe,bfservicebfcallsbfmade,bfetc.
1-8 Thebflinearbfassumptionbfisbfreasonablybfvalidbf
providingbfthatbfthebfcostbfformulabfisbfusedbfonlybfwithinbft
hebfrelevantbfrange.
bf bf bf bf
18th Edition by Garrison, Noreen and Brewer
bf bf bf bf bf bf
Verified Chapter's 1 - 16 | Complete
bf bf bf bf bf bf
,
,Table of Contents
bf bf
ChapterbfOne:bfManagerialbfAccountingbfandbfCostbfConcepts
ChapterbfTwo:bfJob-OrderbfCosting:bfCalculatingbfUnitbfProductbfCosts
ChapterbfThree:bfJob-OrderbfCosting:bfCostbfFlowsbfandbfExternalbfReporting
ChapterbfFour:bfProcessbfCosting
ChapterbfFive:bfCost-Volume-ProfitbfRelationships
ChapterbfSix:bfVariablebfCostingbfandbfSegmentbfReporting:bfToolsbfforbfManagement
ChapterbfSeven:bfActivity-BasedbfCosting:bfAbfToolbftobfAidbfDecisionbfMaking
ChapterbfEight:bfMasterbfBudgeting
ChapterbfNine:bfFlexiblebfBudgetsbfandbfPerformancebfAnalysis
ChapterbfTen:bfStandardbfCostsbfandbfVariances
ChapterbfEleven:bfResponsibilitybfAccountingbfSystems
ChapterbfTwelve:bfStrategicbfPerformancebfMeasurement
ChapterbfThirteen:bfDifferentialbfAnalysis:bfThebfKeybftobfDecisionbfMaking
ChapterbfFourteen:bfCapitalbfBudgetingbfDecisions
ChapterbfFifteen:bfStatementbfofbfCashbfFlows
ChapterbfSixteen:bfFinancialbfStatementbfAnalysis
, Chapter 1 bf
Managerial Accounting and Cost Concepts
bf bf bf bf
Questions
1-1 Thebfthreebfmajorbftypesbfofbfproductbfcostsbfinb 1-4
fabfmanufacturingbfcompanybfarebfdirectbfmaterials,bfd a. Variablebfcost:bfThebfvariablebfcostbfperbfunitbfisbfc
irectbflabor,bfandbfmanufacturingbfoverhead. onstant,bfbutbftotalbfvariablebfcostbfchangesbfinbfdir
ectbfproportionbftobfchangesbfinbfvolume.
1-2 b. Fixedbfcost:bfThebftotalbffixedbfcostbfisbfconstantbfwith
a. Directbfmaterialsbfarebfanbfintegralbfpartbfofbfabf inbfthebfrelevantbfrange.bfThebfaveragebffixedbfcostbfp
finishedbfproductbfandbftheirbfcostsbfcanbfbebfconvenien erbfunitbfvariesbfinverselybfwithbfchangesb f inbfvolum
tlybftracedbftobfit. e.
b. Indirectbfmaterialsbfarebfgenerallybfsmallbfitemsbf c. Mixedbfcost:bfAbfmixedbfcostbfcontainsbfbothbfv
ofbfmaterialbfsuchbfasbfgluebfandbfnails.bfTheybfmaybfbebfa ariablebfandbffixedbfcostbfelements.
nbfintegralbfpartbfofbfabffinishedbfproductbfbutbftheirbfcostsb
fcanbfbebftracedbftobfthebfproductbfonlybfatbfgreatbfcostbfo 1-5
rbfinconvenience. a. Unitbffixedbfcostsbfdecreasebfasbfthebfactivitybflevelbfin
c. Directbflaborbfconsistsbfofbflaborbfcostsbfthatbfc creases.
anbfbebfeasilybftracedbftobfparticularbfproducts. b. Unitbfvariablebfcostsbfremainbfconstantbfasbfthebfac
Directbflaborbfisbfalsobfcalledbf―touchbflabor.‖ tivitybflevelbfincreases.
d. Indirectbflaborbfconsistsbfofbfthebflaborbfcostsbfof c. Totalbffixedbfcostsbfremainbfconstantbfasbfthebfac
bfjanitors,bfsupervisors,bfmaterialsbfhandlers,bfandbfotherb tivitybflevelbfincreases.
ffactorybfworkersbfthatbfcannotbfbebfconvenientlybftrace
d. Totalbfvariablebfcostsbfincreasebfasbfthebfactivitybfle
dbftobfparticularbfproducts.bfThesebflaborbfcostsbfarebfinc velbfincreases.
urredbftobfsupportbfproduction,bfbutbfthebfworkersbfinvol
vedbfdobfnotbfdirectlybfworkbfonbfthebfproduct. 1-6
e. Manufacturingbfoverheadbfincludesbfallbfmanuf
a. Costbfbehavior:bfCostbfbehaviorbfrefersbftobfthebfw
acturingbfcostsbfexceptbfdirectbfmaterialsbfandbfdirectbfla
aybfinbfwhichbfcostsbfchangebfinbfresponsebftobfchan
bor.bfConsequently,bfmanufacturingbfoverheadbfincludes
gesbfinbfabfmeasurebfofbfactivitybfsuchbfasbfsalesbfvol
bfindirectbfmaterialsbfandbfindirectbflaborbfasbfwellbfasbfot
ume,bfproductionbfvolume,bforbfordersbfprocessed.
herbfmanufacturingbfcosts.
b. Relevantbfrange:bfThebfrelevantbfrangebfisbfthebfr
1-3 angebfofbfactivitybfwithinbfwhichbfassumptionsbfabo
utbfvariablebfandbffixedbfcostbfbehaviorbfarebfvali
Abfproductbfcostbfisbfanybfcostbfinvolvedbfinbfpur
d.
chasingbforbfmanufacturingbfgoods.bfInbfthebfcasebfofbfma
nufacturedbfgoods,bfthesebfcostsbfconsistbfofbfdirectbfmat
erials,bfdirectbflabor,bfandbfmanufacturingbfoverhead.bfA 1-7 Anbfactivitybfbasebfisbfabfmeasurebfofbfwhat
bfperiodbfcostbfisbfabfcostbfthatbfisbftakenbfdirectlybftobfthebf
everbfcausesbfthebfincurrencebfofbfabfvariablebfcost.bfE
incomebfstatementbfasbfanbfexpensebfinbfthebfperiodbfinbf xamplesbfofbfactivitybfbasesbfincludebfunitsbfproduced
whichbfitbfisbfincurred. ,bfunitsbfsold,bflettersbftyped,bfbedsbfinbfabfhospital,bfm
ealsbfservedbfinbfabfcafe,bfservicebfcallsbfmade,bfetc.
1-8 Thebflinearbfassumptionbfisbfreasonablybfvalidbf
providingbfthatbfthebfcostbfformulabfisbfusedbfonlybfwithinbft
hebfrelevantbfrange.
