Solution Manual for Managerial Accounting, 18th Edition By Ray Garrison, Eric Noreen and Peter Brewer Verified Chapter's 1 - 16 | Complete|ISBN 9781266248610| newest

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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Chapter One: Managerial Accounting and Cost Concepts
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Chapter Two: Job-Order Costing: Calculating Unit Product Costs
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Chapter Three: Job-Order Costing: Cost Flows and External Reporting
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Chapter Four: Process Costing
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Chapter Five: Cost-Volume-Profit Relationships
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Chapter Six: Variable Costing and Segment Reporting: Tools for Management
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Chapter Seven: Activity-Based Costing: A Tool to Aid Decision Making
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Chapter Eight: Master Budgeting
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Chapter Nine: Flexible Budgets and Performance Analysis
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Chapter Ten: Standard Costs and Variances
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Chapter Eleven: Responsibility Accounting Systems
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Chapter Twelve: Strategic Performance Measurement
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Chapter Thirteen: Differential Analysis: The Key to Decision Making
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Chapter Fourteen: Capital Budgeting Decisions
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Chapter Fifteen: Statement of Cash Flows
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Chapter Sixteen: Financial Statement Analysis
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,Chapter 1 mm




Managerial Accounting and Cost Concepts mm mm mm mm




Questions

1-1 The three major types of product costs in
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a manufacturing company are direct materials,
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direct labor, and manufacturing overhead.
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direct proportion to changes in volume.
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1-2 b. Fixed cost: The total fixed cost is constant
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a. Direct materials are an integral part of a
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finished product and their costs can be
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conveniently traced to it.
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b. Indirect materials are generally small items mm mm mm mm mm c. Mixed cost: A mixed cost contains both
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of material such as glue and nails. They may be
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an integral part of a finished product but their
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costs can be traced to the product only at great
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cost or inconvenience.
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a. Unit fixed costs decrease as the activity level
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c. Direct labor consists of labor costs that
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can be easily traced to particular products.
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b. Unit variable costs remain constant as the
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Direct labor is also called ―touch labor.‖
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activity level increases.
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d. Indirect labor consists of the labor costs mm mm mm mm mm mm
c. Total fixed costs remain constant as the
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of janitors, supervisors, materials handlers, and
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activity level increases.
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other factory workers that cannot be
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d. Total variable costs increase as the activity
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conveniently traced to particular products. These
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level increases.
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labor costs are incurred to support production,
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but the workers involved do not directly work
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1-6
on the product.
a. Cost behavior: Cost behavior refers to the
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e. Manufacturing overhead includes all
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way in which costs change in response to
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manufacturing costs except direct materials and
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changes in a measure of activity such as
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direct labor. Consequently, manufacturing
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sales volume, production volume, or orders
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overhead includes indirect materials and indirect
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processed.
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labor as well as other manufacturing costs.
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b. Relevant range: The relevant range is the
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1-3 A product cost is any cost involved in range of activity within which assumptions
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about variable and fixed cost behavior
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purchasing or manufacturing goods. In the case of
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are valid.
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manufactured goods, these costs consist of direct
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materials, direct labor, and manufacturing
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overhead. A period cost is a cost that is taken
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1-7 An activity base is a measure of
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directly to the income statement as an expense
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whatever causes the incurrence of a variable
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in the period in which it is incurred.
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cost. Examples of activity bases include units
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produced, units sold, letters typed, beds in a
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hospital, meals served in a cafe, service calls
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made, etc.
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1-8 The linear assumption is reasonably valid
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providing that the cost formula is used only within
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the relevant range.
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, 1-9 A discretionary fixed cost has a fairly
mm mm mm mm mm mm 1-11 The traditional approach organizes costs by
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short planning horizon—usually a year. Such
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costs arise from annual decisions by
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management to spend on certain fixed cost
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items, such as advertising, research, and
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management development. A committed fixed
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cost has a long planning horizon—generally
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many years. Such costs relate to a company’s
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investment in facilities, equipment, and basic
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organization. Once such costs have been
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incurred, they are ―locked in‖ for many years.
mm mm mm mm mm mm mm mm 1-12 The contribution margin is total salesmm mm mm mm mm


revenue less total variable expenses.
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1-10 Yes. As the anticipated level of activity
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changes, the level of fixed costs needed to
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1-13 A differential cost is a cost that differs
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support operations may also change. Most fixed
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between alternatives in a decision. A sunk cost
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costs are adjusted upward and downward in
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is a cost that has already been incurred and
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large steps, rather than being absolutely fixed at
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cannot be altered by any decision taken now or
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one level for all ranges of activity.
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in the future. An opportunity cost is the potential
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benefit that is given up when one alternative is
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selected over another.
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1-14 No, differential costs can be either mm mm mm mm mm


variable or fixed. For example, the alternatives
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might consist of purchasing one machine rather
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than another to make a product. The difference
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between the fixed costs of purchasing the two
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machines is a differential cost.
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Managerial Accounting 18th Edition, Solutions Manual,
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