SOLUTION MANUAL FOR MANAGERIAL
ACCOUNTING, 18TH EDITION BY RAY
GARRISON, ERIC NOREEN AND PETER
BREWER VERIFIED ALL CHAPTER'S 1 - 16 |
COMPLETE GRADED A+ LATEST UPDATE.
Managerial Accounting 18th Edition, Solutions Manual,
, Chapter Sixteen: Financial Statement
Table of Contents AnalysisChapter 1
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
Managerial Accounting 18th Edition, Solutions Manual,
, Managerial 1-4
a. Variable cost: The variable cost per unit is
Accounting and Cost constant, but total variable cost changes in
direct proportion to changes in volume.
Concepts b. Fixed cost: The total fixed cost is constant
within the relevant range. The average fixed
cost per unit varies inversely with changes
in volume.
c. Mixed cost: A mixed cost contains both
Questions variable and fixed cost elements.
1-5
a. Unit fixed costs decrease as the activity level
increases.
b. Unit variable costs remain constant as the
activity level increases.
1-1 The three major types of product costs
c. Total fixed costs remain constant as the
in a manufacturing company are direct
activity level increases.
materials, direct labor, and manufacturing
d. Total variable costs increase as the activity
overhead.
level increases.
1-2
1-6
a. Direct materials are an integral part of a
a. Cost behavior: Cost behavior refers to the
finished product and their costs can be
way in which costs change in response to
conveniently traced to it.
changes in a measure of activity such as
b. Indirect materials are generally small
sales volume, production volume, or orders
items of material such as glue and nails. They
processed.
may be an integral part of a finished product but
b. Relevant range: The relevant range is the
their costs can be traced to the product only at
range of activity within which assumptions
great cost or inconvenience.
about variable and fixed cost behavior are
c. Direct labor consists of labor costs that
valid.
can be easily traced to particular products.
Direct labor is also called ―touch labor.‖
1-7 An activity base is a measure of
d. Indirect labor consists of the labor costs
whatever causes the incurrence of a variable
of janitors, supervisors, materials handlers, and
cost. Examples of activity bases include units
other factory workers that cannot be
produced, units sold, letters typed, beds in a
conveniently traced to particular products.
hospital, meals served in a cafe, service calls
These labor costs are incurred to support
made, etc.
production, but the workers involved do not
directly work on the product.
1-8 The linear assumption is reasonably
e. Manufacturing overhead includes all
valid providing that the cost formula is used only
manufacturing costs except direct materials and
within the relevant range.
direct labor. Consequently, manufacturing
overhead includes indirect materials and indirect
labor as well as other manufacturing costs.
1-3 A product cost is any cost involved in
purchasing or manufacturing goods. In the case
of manufactured goods, these costs consist of 1-9 A discretionary fixed cost has a fairly
direct materials, direct labor, and manufacturing short planning horizon—usually a year. Such
overhead. A period cost is a cost that is taken costs arise from annual decisions by
directly to the income statement as an expense management to spend on certain fixed cost
in the period in which it is incurred. items, such as advertising, research, and
management development. A committed fixed
Managerial Accounting 18th Edition, Solutions Manual,
, cost has a long planning horizon—generally 1-11 The traditional approach organizes costs
many years. Such costs relate to a company’s by function, such as production, selling, and
investment in facilities, equipment, and basic administration. Within a functional area, fixed
organization. Once such costs have been and variable costs are intermingled. The
incurred, they are ―locked in‖ for many years. contribution approach income statement
organizes costs by behavior, first deducting
1-10 Yes. As the anticipated level of activity variable expenses to obtain contribution margin,
changes, the level of fixed costs needed to and then deducting fixed expenses to obtain net
support operations may also change. Most fixed operating income.
costs are adjusted upward and downward in
large steps, rather than being absolutely fixed at 1-12 The contribution margin is total sales
one level for all ranges of activity. revenue less total variable expenses.
1-13 A differential cost is a cost that differs
between alternatives in a decision. A sunk cost
is a cost that has already been incurred and
cannot be altered by any decision taken now or
in the future. An opportunity cost is the potential
benefit that is given up when one alternative is
selected over another.
1-14 No, differential costs can be either
variable or fixed. For example, the alternatives
might consist of purchasing one machine rather
than another to make a product. The difference
between the fixed costs of purchasing the two
machines is a differential cost.
Managerial Accounting 18th Edition, Solutions Manual,
ACCOUNTING, 18TH EDITION BY RAY
GARRISON, ERIC NOREEN AND PETER
BREWER VERIFIED ALL CHAPTER'S 1 - 16 |
COMPLETE GRADED A+ LATEST UPDATE.
Managerial Accounting 18th Edition, Solutions Manual,
, Chapter Sixteen: Financial Statement
Table of Contents AnalysisChapter 1
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
Managerial Accounting 18th Edition, Solutions Manual,
, Managerial 1-4
a. Variable cost: The variable cost per unit is
Accounting and Cost constant, but total variable cost changes in
direct proportion to changes in volume.
Concepts b. Fixed cost: The total fixed cost is constant
within the relevant range. The average fixed
cost per unit varies inversely with changes
in volume.
c. Mixed cost: A mixed cost contains both
Questions variable and fixed cost elements.
1-5
a. Unit fixed costs decrease as the activity level
increases.
b. Unit variable costs remain constant as the
activity level increases.
1-1 The three major types of product costs
c. Total fixed costs remain constant as the
in a manufacturing company are direct
activity level increases.
materials, direct labor, and manufacturing
d. Total variable costs increase as the activity
overhead.
level increases.
1-2
1-6
a. Direct materials are an integral part of a
a. Cost behavior: Cost behavior refers to the
finished product and their costs can be
way in which costs change in response to
conveniently traced to it.
changes in a measure of activity such as
b. Indirect materials are generally small
sales volume, production volume, or orders
items of material such as glue and nails. They
processed.
may be an integral part of a finished product but
b. Relevant range: The relevant range is the
their costs can be traced to the product only at
range of activity within which assumptions
great cost or inconvenience.
about variable and fixed cost behavior are
c. Direct labor consists of labor costs that
valid.
can be easily traced to particular products.
Direct labor is also called ―touch labor.‖
1-7 An activity base is a measure of
d. Indirect labor consists of the labor costs
whatever causes the incurrence of a variable
of janitors, supervisors, materials handlers, and
cost. Examples of activity bases include units
other factory workers that cannot be
produced, units sold, letters typed, beds in a
conveniently traced to particular products.
hospital, meals served in a cafe, service calls
These labor costs are incurred to support
made, etc.
production, but the workers involved do not
directly work on the product.
1-8 The linear assumption is reasonably
e. Manufacturing overhead includes all
valid providing that the cost formula is used only
manufacturing costs except direct materials and
within the relevant range.
direct labor. Consequently, manufacturing
overhead includes indirect materials and indirect
labor as well as other manufacturing costs.
1-3 A product cost is any cost involved in
purchasing or manufacturing goods. In the case
of manufactured goods, these costs consist of 1-9 A discretionary fixed cost has a fairly
direct materials, direct labor, and manufacturing short planning horizon—usually a year. Such
overhead. A period cost is a cost that is taken costs arise from annual decisions by
directly to the income statement as an expense management to spend on certain fixed cost
in the period in which it is incurred. items, such as advertising, research, and
management development. A committed fixed
Managerial Accounting 18th Edition, Solutions Manual,
, cost has a long planning horizon—generally 1-11 The traditional approach organizes costs
many years. Such costs relate to a company’s by function, such as production, selling, and
investment in facilities, equipment, and basic administration. Within a functional area, fixed
organization. Once such costs have been and variable costs are intermingled. The
incurred, they are ―locked in‖ for many years. contribution approach income statement
organizes costs by behavior, first deducting
1-10 Yes. As the anticipated level of activity variable expenses to obtain contribution margin,
changes, the level of fixed costs needed to and then deducting fixed expenses to obtain net
support operations may also change. Most fixed operating income.
costs are adjusted upward and downward in
large steps, rather than being absolutely fixed at 1-12 The contribution margin is total sales
one level for all ranges of activity. revenue less total variable expenses.
1-13 A differential cost is a cost that differs
between alternatives in a decision. A sunk cost
is a cost that has already been incurred and
cannot be altered by any decision taken now or
in the future. An opportunity cost is the potential
benefit that is given up when one alternative is
selected over another.
1-14 No, differential costs can be either
variable or fixed. For example, the alternatives
might consist of purchasing one machine rather
than another to make a product. The difference
between the fixed costs of purchasing the two
machines is a differential cost.
Managerial Accounting 18th Edition, Solutions Manual,
