Solution Manual for Managerial Accounting,
18th Edition
By Ray Garrison, Eric Noreen and Peter Brewer
Verified Chapter's 1 - 16 | Complete
,Table of Contents
Chapter One: Managerial Accounting and Cost Concepts
Chapter Two: Job-Order Costing: Calculating Unit Product Costs
Chapter Three: Job-Order Costing: Cost Flows and External Reporting
Chapter Four: Process Costing
Chapter Five: Cost-Volume-Profit Relationships
Chapter Six: Variable Costing and Segment Reporting: Tools for Management
Chapter Seven: Activity-Based Costing: A Tool to Aid Decision Making
Chapter Eight: Master Budgeting
Chapter Nine: Flexible Budgets and Performance Analysis
Chapter Ten: Standard Costs and Variances
Chapter Eleven: Responsibility Accounting Systems
Chapter Twelve: Strategic Performance Measurement
Chapter Thirteen: Differential Analysis: The Key to Decision Making
Chapter Fourteen: Capital Budgeting Decisions
Chapter Fifteen: Statement of Cash Flows
Chapter Sixteen: Financial Statement Analysis
,Chapter 1 G
Managerial Accounting and Cost Concepts
G G G G
Questions
to Gthe Gincome Gstatement Gas Gan Gexpense Gin
G
1-1 The Gthree Gmajor Gtypes Gof Gproduct
Gcosts Gin Ga Gmanufacturing Gcompany Gare
the Gperiod Gin Gwhich Git Gis Gincurred.
G
Gdirect Gmaterials, Gdirect Glabor, Gand
Gmanufacturing Goverhead.
1-2
a. Direct Gmaterials Gare Gan Gintegral Gpart
Gof Ga Gfinished Gproduct Gand Gtheir Gcosts Gcan
Gbe Gconveniently Gtraced Gto Git.
b. Indirect Gmaterials Gare Ggenerally Gsmall
Gitems Gof Gmaterial Gsuch Gas Gglue Gand Gnails.
GThey Gmay Gbe Gan Gintegral Gpart Gof Ga Gfinished
Gproduct Gbut Gtheir Gcosts Gcan Gbe Gtraced Gto
Gthe Gproduct Gonly Gat Ggreat Gcost Gor
Ginconvenience.
c. Direct Glabor Gconsists Gof Glabor Gcosts
Gthat Gcan Gbe Geasily Gtraced Gto Gparticular
Gproducts.
Direct Glabor Gis Galso Gcalled G―touch Glabor.‖
d. Indirect Glabor Gconsists Gof Gthe Glabor
Gcosts Gof Gjanitors, Gsupervisors, Gmaterials
Ghandlers, Gand Gother Gfactory Gworkers Gthat
Gcannot Gbe Gconveniently Gtraced Gto Gparticular
Gproducts. GThese Glabor Gcosts Gare Gincurred
Gto Gsupport Gproduction, Gbut Gthe Gworkers
Ginvolved Gdo Gnot Gdirectly Gwork Gon Gthe
Gproduct.
e. Manufacturing Goverhead Gincludes Gall
Gmanufacturing Gcosts Gexcept Gdirect Gmaterials
Gand Gdirect Glabor. GConsequently,
Gmanufacturing Goverhead Gincludes Gindirect
Gmaterials Gand Gindirect Glabor Gas Gwell Gas
Gother Gmanufacturing Gcosts.
1-3 A Gproduct Gcost Gis Gany Gcost Ginvolved
Gin Gpurchasing Gor Gmanufacturing Ggoods. GIn
Gthe Gcase Gof Gmanufactured Ggoods, Gthese
Gcosts Gconsist Gof Gdirect Gmaterials, Gdirect
Glabor, Gand Gmanufacturing Goverhead. GA
Gperiod Gcost Gis Ga Gcost Gthat Gis Gtaken Gdirectly
, 1-4
a. Variable Gcost: GThe Gvariable Gcost Gper
Gunit Gis Gconstant, Gbut Gtotal Gvariable
Gcost Gchanges Gin Gdirect Gproportion Gto
Gchanges Gin Gvolume.
b. Fixed Gcost: GThe Gtotal Gfixed Gcost Gis
Gconstant Gwithin Gthe Grelevant Grange. GThe
Gaverage Gfixed Gcost Gper Gunit Gvaries
Ginversely Gwith Gchanges G in Gvolume.
c. Mixed Gcost: GA Gmixed Gcost Gcontains
Gboth Gvariable Gand Gfixed Gcost
Gelements.
1-5
a. Unit Gfixed Gcosts Gdecrease Gas Gthe Gactivity
Glevel Gincreases.
b. Unit Gvariable Gcosts Gremain Gconstant Gas
Gthe Gactivity Glevel Gincreases.
c. Total Gfixed Gcosts Gremain Gconstant Gas
Gthe Gactivity Glevel Gincreases.
d. Total Gvariable Gcosts Gincrease Gas Gthe
Gactivity Glevel Gincreases.
1-6
a. Cost Gbehavior: GCost Gbehavior Grefers Gto
Gthe Gway Gin Gwhich Gcosts Gchange Gin
Gresponse Gto Gchanges Gin Ga Gmeasure Gof
Gactivity Gsuch Gas Gsales Gvolume,
Gproduction Gvolume, Gor Gorders
Gprocessed.
b. Relevant Grange: GThe Grelevant Grange
Gis Gthe Grange Gof Gactivity Gwithin Gwhich
Gassumptions Gabout Gvariable Gand Gfixed
Gcost Gbehavior Gare Gvalid.
1-7 An Gactivity Gbase Gis Ga Gmeasure
Gof Gwhatever Gcauses Gthe Gincurrence Gof Ga
Gvariable Gcost. GExamples Gof Gactivity
Gbases Ginclude Gunits Gproduced, Gunits
Gsold, Gletters Gtyped, Gbeds Gin Ga Ghospital,
Gmeals Gserved Gin Ga Gcafe, Gservice Gcalls
Gmade, Getc.
1-8 The Glinear Gassumption Gis Greasonably
Gvalid Gproviding Gthat Gthe Gcost Gformula Gis
Gused Gonly Gwithin Gthe Grelevant Grange.
18th Edition
By Ray Garrison, Eric Noreen and Peter Brewer
Verified Chapter's 1 - 16 | Complete
,Table of Contents
Chapter One: Managerial Accounting and Cost Concepts
Chapter Two: Job-Order Costing: Calculating Unit Product Costs
Chapter Three: Job-Order Costing: Cost Flows and External Reporting
Chapter Four: Process Costing
Chapter Five: Cost-Volume-Profit Relationships
Chapter Six: Variable Costing and Segment Reporting: Tools for Management
Chapter Seven: Activity-Based Costing: A Tool to Aid Decision Making
Chapter Eight: Master Budgeting
Chapter Nine: Flexible Budgets and Performance Analysis
Chapter Ten: Standard Costs and Variances
Chapter Eleven: Responsibility Accounting Systems
Chapter Twelve: Strategic Performance Measurement
Chapter Thirteen: Differential Analysis: The Key to Decision Making
Chapter Fourteen: Capital Budgeting Decisions
Chapter Fifteen: Statement of Cash Flows
Chapter Sixteen: Financial Statement Analysis
,Chapter 1 G
Managerial Accounting and Cost Concepts
G G G G
Questions
to Gthe Gincome Gstatement Gas Gan Gexpense Gin
G
1-1 The Gthree Gmajor Gtypes Gof Gproduct
Gcosts Gin Ga Gmanufacturing Gcompany Gare
the Gperiod Gin Gwhich Git Gis Gincurred.
G
Gdirect Gmaterials, Gdirect Glabor, Gand
Gmanufacturing Goverhead.
1-2
a. Direct Gmaterials Gare Gan Gintegral Gpart
Gof Ga Gfinished Gproduct Gand Gtheir Gcosts Gcan
Gbe Gconveniently Gtraced Gto Git.
b. Indirect Gmaterials Gare Ggenerally Gsmall
Gitems Gof Gmaterial Gsuch Gas Gglue Gand Gnails.
GThey Gmay Gbe Gan Gintegral Gpart Gof Ga Gfinished
Gproduct Gbut Gtheir Gcosts Gcan Gbe Gtraced Gto
Gthe Gproduct Gonly Gat Ggreat Gcost Gor
Ginconvenience.
c. Direct Glabor Gconsists Gof Glabor Gcosts
Gthat Gcan Gbe Geasily Gtraced Gto Gparticular
Gproducts.
Direct Glabor Gis Galso Gcalled G―touch Glabor.‖
d. Indirect Glabor Gconsists Gof Gthe Glabor
Gcosts Gof Gjanitors, Gsupervisors, Gmaterials
Ghandlers, Gand Gother Gfactory Gworkers Gthat
Gcannot Gbe Gconveniently Gtraced Gto Gparticular
Gproducts. GThese Glabor Gcosts Gare Gincurred
Gto Gsupport Gproduction, Gbut Gthe Gworkers
Ginvolved Gdo Gnot Gdirectly Gwork Gon Gthe
Gproduct.
e. Manufacturing Goverhead Gincludes Gall
Gmanufacturing Gcosts Gexcept Gdirect Gmaterials
Gand Gdirect Glabor. GConsequently,
Gmanufacturing Goverhead Gincludes Gindirect
Gmaterials Gand Gindirect Glabor Gas Gwell Gas
Gother Gmanufacturing Gcosts.
1-3 A Gproduct Gcost Gis Gany Gcost Ginvolved
Gin Gpurchasing Gor Gmanufacturing Ggoods. GIn
Gthe Gcase Gof Gmanufactured Ggoods, Gthese
Gcosts Gconsist Gof Gdirect Gmaterials, Gdirect
Glabor, Gand Gmanufacturing Goverhead. GA
Gperiod Gcost Gis Ga Gcost Gthat Gis Gtaken Gdirectly
, 1-4
a. Variable Gcost: GThe Gvariable Gcost Gper
Gunit Gis Gconstant, Gbut Gtotal Gvariable
Gcost Gchanges Gin Gdirect Gproportion Gto
Gchanges Gin Gvolume.
b. Fixed Gcost: GThe Gtotal Gfixed Gcost Gis
Gconstant Gwithin Gthe Grelevant Grange. GThe
Gaverage Gfixed Gcost Gper Gunit Gvaries
Ginversely Gwith Gchanges G in Gvolume.
c. Mixed Gcost: GA Gmixed Gcost Gcontains
Gboth Gvariable Gand Gfixed Gcost
Gelements.
1-5
a. Unit Gfixed Gcosts Gdecrease Gas Gthe Gactivity
Glevel Gincreases.
b. Unit Gvariable Gcosts Gremain Gconstant Gas
Gthe Gactivity Glevel Gincreases.
c. Total Gfixed Gcosts Gremain Gconstant Gas
Gthe Gactivity Glevel Gincreases.
d. Total Gvariable Gcosts Gincrease Gas Gthe
Gactivity Glevel Gincreases.
1-6
a. Cost Gbehavior: GCost Gbehavior Grefers Gto
Gthe Gway Gin Gwhich Gcosts Gchange Gin
Gresponse Gto Gchanges Gin Ga Gmeasure Gof
Gactivity Gsuch Gas Gsales Gvolume,
Gproduction Gvolume, Gor Gorders
Gprocessed.
b. Relevant Grange: GThe Grelevant Grange
Gis Gthe Grange Gof Gactivity Gwithin Gwhich
Gassumptions Gabout Gvariable Gand Gfixed
Gcost Gbehavior Gare Gvalid.
1-7 An Gactivity Gbase Gis Ga Gmeasure
Gof Gwhatever Gcauses Gthe Gincurrence Gof Ga
Gvariable Gcost. GExamples Gof Gactivity
Gbases Ginclude Gunits Gproduced, Gunits
Gsold, Gletters Gtyped, Gbeds Gin Ga Ghospital,
Gmeals Gserved Gin Ga Gcafe, Gservice Gcalls
Gmade, Getc.
1-8 The Glinear Gassumption Gis Greasonably
Gvalid Gproviding Gthat Gthe Gcost Gformula Gis
Gused Gonly Gwithin Gthe Grelevant Grange.
