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