Solution Manual for Managerial
Accounting,
18th Edition
By Ray Garrison, Eric Noreen and Peter
Brewer Verified Chapter's 1 - 16 |
Complete
,Table of Contents
8y 8y
Chapter8yOne:8yManagerial8yAccounting8yand8yCost8y
Concepts8 y Chapter8yTwo:8yJob-
Order8yCosting:8yCalculating8yUnit8yProduct8yCosts
Chapter8yThree:8yJob-
Order8yCosting:8yCost8yFlows8yand8yExternal8yReporting8 y Chapter8yFo
ur:8yProcess8yCosting
Chapter8yFive:8yCost-Volume-Profit8yRelationships
Chapter8ySix:8yVariable8yCosting8yand8ySegment8yReporting:8yTools8yf
or8yManagement8 y Chapter8ySeven:8yActivity-
Based8yCosting:8yA8yTool8yto8yAid8yDecision8yMaking8 y Chapter8yEight
:8yMaster8yBudgeting
Chapter8yNine:8yFlexible8yBudgets8yand8yPerformanc
e8yAnalysis8 y Chapter8yTen:8yStandard8yCosts8yand8yV
ariances
Chapter8yEleven:8yResponsibility8yAccounting8ySyste
ms8 y Chapter8yTwelve:8yStrategic8yPerformance8yMe
asurement
Chapter8yThirteen:8yDifferential8yAnalysis:8yThe8yKey8yto8yDecisio
n8yMaking8 y Chapter8yFourteen:8yCapital8yBudgeting8yDecisions8yC
hapter8yFifteen:8yStatement8yof8yCash
Flows8yChapter8ySixteen:8yFinancial8yStatem
ent8yAnalysis
, Chapter 1 8y
Managerial Accounting and Cost Concep
8y 8y 8y 8y8y
ts
Questions
d8yin8ywhich8yit8yis8yincurred.
1-1 The8ythree8ymajor8ytypes8yof8yprod
uct8ycosts8 y in8ya8ymanufacturing8ycompa
ny8yare8ydirect8ymaterials,8ydirect8ylabor,
8yand8ymanufacturing8 y overhead.
1-2
a. Direct8ymaterials8yare8yan8yintegr
al8ypart8yof8ya8 y finished8yproduct8yand8y
their8ycosts8ycan8ybe8 y conveniently8ytra
ced8yto8yit.
b. Indirect8ymaterials8yare8ygenerally8ys
mall8 y items8yof8ymaterial8ysuch8yas8yglue8ya
nd8ynails.8yThey8 y may8ybe8yan8yintegral8ypar
t8yof8ya8yfinished8yproduct8ybut8ytheir8ycosts8
ycan8ybe8ytraced8yto8ythe8yproduct8yonly8yat8
y great8ycost8yor8yinconvenience.
c. Direct8ylabor8yconsists8yof8yla
bor8ycosts8ythat8 y can8ybe8yeasily8ytr
aced8yto8yparticular8yproducts.
Direct8ylabor8yis8yalso8ycalled8y―touch8ylabor.
‖
d. Indirect8ylabor8yconsists8yof8ythe8yla
bor8ycosts8 y of8yjanitors,8ysupervisors,8yma
terials8yhandlers,8yand8 y other8yfactory8yw
orkers8ythat8ycannot8ybe8yconveniently8ytr
aced8yto8yparticular8yproducts.8yThese8yla
bor8ycosts8 y are8yincurred8yto8ysupport8 y pr
oduction,8ybut8ythe8yworkers8yinvolved8ydo
8ynot8 y directly8ywork8yon8ythe8yproduct.
e. Manufacturing8 y overhead8 y includes
8yall8 y manufacturing8ycosts8yexcept8ydirect
8ymaterials8yand8 y direct8ylabor.8yConseque
ntly,8ymanufacturing8yoverhead8yincludes8y
indirect8ymaterials8yand8yindirect8 y labor8ya
s8ywell8yas8yother8ymanufacturing8ycosts.
1-3
A8yproduct8ycost8yis8yany8ycost8yinvol
ved8yin8ypurchasing8yor8ymanufacturing8ygo
ods.8yIn8ythe8ycase8 y of8ymanufactured8ygoo
ds,8ythese8ycosts8yconsist8yof8 y direct8ymate
rials,8ydirect8ylabor,8yand8ymanufacturing8 y
overhead.8yA8yperiod8ycost8yis8ya8ycost8ythat
8yis8ytaken8 y directly8yto8 y the8 y income8 y st
atement8 y as8 y an8 y expense8yin8ythe8yperio
, 1-4
a. Variable8ycost:8yThe8yvariable8ycost
8yper8yunit8yis8yconstant,8ybut8ytotal
8yvariable8ycost8ychanges 8yin8ydirect
8yproportion8yto8ychanges 8yin8yvolu
me.
b. Fixed8ycost:8yThe8ytotal8yfixed8ycost8y
is8yconstant8 y within8ythe8yrelevant8y
range.8yThe8yaverage8yfixed8 y cost8y
per8yunit8yvaries8yinversely8ywith8ych
anges8yin8yvolume.
c. Mixed8ycost:8yA8ymixed8ycost8yc
ontains8yboth8 y variable8yand8yfi
xed8ycost8yelements.
1-5
a. Unit8yfixed8ycosts8ydecrease8y
as8ythe8yactivity8ylevel8yincre
ases.
b. Unit8yvariable8ycosts8yremain8yco
nstant8yas8ythe8 y activity8ylevel8yi
ncreases.
c. Total8yfixed8ycosts8yremain8yco
nstant8yas8ythe8 y activity8ylevel
8yincreases.
d. Total8yvariable8ycosts8yincrease8y
as8ythe8yactivity8ylevel8yincreases
.
1-6
a. Cost8ybehavior:8yCost8ybehavior8yre
fers8 y to8ythe8yway8yin8ywhich8ycost
s8ychange8yin8yresponse8yto8ychang
es8yin8ya8ymeasure8yof8yactivity8ysu
ch8yas8 y sales8yvolume,8yproduction
8yvolume,8yor8yorders8yprocessed.
b. Relevant8yrange:8yThe8yrelevant8yr
ange8 y is8ythe8 y range8yof8yactivity8
ywithin8ywhich8yassumptions 8 y abo
ut8yvariable8yand8 y fixed8ycost8ybeh
avior8yare8 y valid.
1-7 An8 y activity8 y base8 y is8 y a8 y
measure8yof8 y whatever8ycauses8ythe8
yincurrence8yof8ya8yvariable8 y cost.8yE
xamples8yof8yactivity8ybases8yinclude
8yunits8 y produced,8yunits 8ysold,8ylett
ers8ytyped,8ybeds8yin8ya8 y hospital,8y
meals8yserved8yin8ya8ycafe,8yservice8y
calls8ymade,8yetc.
1-8 The8y linear8y assumption8 y is8y reasona
bly
Accounting,
18th Edition
By Ray Garrison, Eric Noreen and Peter
Brewer Verified Chapter's 1 - 16 |
Complete
,Table of Contents
8y 8y
Chapter8yOne:8yManagerial8yAccounting8yand8yCost8y
Concepts8 y Chapter8yTwo:8yJob-
Order8yCosting:8yCalculating8yUnit8yProduct8yCosts
Chapter8yThree:8yJob-
Order8yCosting:8yCost8yFlows8yand8yExternal8yReporting8 y Chapter8yFo
ur:8yProcess8yCosting
Chapter8yFive:8yCost-Volume-Profit8yRelationships
Chapter8ySix:8yVariable8yCosting8yand8ySegment8yReporting:8yTools8yf
or8yManagement8 y Chapter8ySeven:8yActivity-
Based8yCosting:8yA8yTool8yto8yAid8yDecision8yMaking8 y Chapter8yEight
:8yMaster8yBudgeting
Chapter8yNine:8yFlexible8yBudgets8yand8yPerformanc
e8yAnalysis8 y Chapter8yTen:8yStandard8yCosts8yand8yV
ariances
Chapter8yEleven:8yResponsibility8yAccounting8ySyste
ms8 y Chapter8yTwelve:8yStrategic8yPerformance8yMe
asurement
Chapter8yThirteen:8yDifferential8yAnalysis:8yThe8yKey8yto8yDecisio
n8yMaking8 y Chapter8yFourteen:8yCapital8yBudgeting8yDecisions8yC
hapter8yFifteen:8yStatement8yof8yCash
Flows8yChapter8ySixteen:8yFinancial8yStatem
ent8yAnalysis
, Chapter 1 8y
Managerial Accounting and Cost Concep
8y 8y 8y 8y8y
ts
Questions
d8yin8ywhich8yit8yis8yincurred.
1-1 The8ythree8ymajor8ytypes8yof8yprod
uct8ycosts8 y in8ya8ymanufacturing8ycompa
ny8yare8ydirect8ymaterials,8ydirect8ylabor,
8yand8ymanufacturing8 y overhead.
1-2
a. Direct8ymaterials8yare8yan8yintegr
al8ypart8yof8ya8 y finished8yproduct8yand8y
their8ycosts8ycan8ybe8 y conveniently8ytra
ced8yto8yit.
b. Indirect8ymaterials8yare8ygenerally8ys
mall8 y items8yof8ymaterial8ysuch8yas8yglue8ya
nd8ynails.8yThey8 y may8ybe8yan8yintegral8ypar
t8yof8ya8yfinished8yproduct8ybut8ytheir8ycosts8
ycan8ybe8ytraced8yto8ythe8yproduct8yonly8yat8
y great8ycost8yor8yinconvenience.
c. Direct8ylabor8yconsists8yof8yla
bor8ycosts8ythat8 y can8ybe8yeasily8ytr
aced8yto8yparticular8yproducts.
Direct8ylabor8yis8yalso8ycalled8y―touch8ylabor.
‖
d. Indirect8ylabor8yconsists8yof8ythe8yla
bor8ycosts8 y of8yjanitors,8ysupervisors,8yma
terials8yhandlers,8yand8 y other8yfactory8yw
orkers8ythat8ycannot8ybe8yconveniently8ytr
aced8yto8yparticular8yproducts.8yThese8yla
bor8ycosts8 y are8yincurred8yto8ysupport8 y pr
oduction,8ybut8ythe8yworkers8yinvolved8ydo
8ynot8 y directly8ywork8yon8ythe8yproduct.
e. Manufacturing8 y overhead8 y includes
8yall8 y manufacturing8ycosts8yexcept8ydirect
8ymaterials8yand8 y direct8ylabor.8yConseque
ntly,8ymanufacturing8yoverhead8yincludes8y
indirect8ymaterials8yand8yindirect8 y labor8ya
s8ywell8yas8yother8ymanufacturing8ycosts.
1-3
A8yproduct8ycost8yis8yany8ycost8yinvol
ved8yin8ypurchasing8yor8ymanufacturing8ygo
ods.8yIn8ythe8ycase8 y of8ymanufactured8ygoo
ds,8ythese8ycosts8yconsist8yof8 y direct8ymate
rials,8ydirect8ylabor,8yand8ymanufacturing8 y
overhead.8yA8yperiod8ycost8yis8ya8ycost8ythat
8yis8ytaken8 y directly8yto8 y the8 y income8 y st
atement8 y as8 y an8 y expense8yin8ythe8yperio
, 1-4
a. Variable8ycost:8yThe8yvariable8ycost
8yper8yunit8yis8yconstant,8ybut8ytotal
8yvariable8ycost8ychanges 8yin8ydirect
8yproportion8yto8ychanges 8yin8yvolu
me.
b. Fixed8ycost:8yThe8ytotal8yfixed8ycost8y
is8yconstant8 y within8ythe8yrelevant8y
range.8yThe8yaverage8yfixed8 y cost8y
per8yunit8yvaries8yinversely8ywith8ych
anges8yin8yvolume.
c. Mixed8ycost:8yA8ymixed8ycost8yc
ontains8yboth8 y variable8yand8yfi
xed8ycost8yelements.
1-5
a. Unit8yfixed8ycosts8ydecrease8y
as8ythe8yactivity8ylevel8yincre
ases.
b. Unit8yvariable8ycosts8yremain8yco
nstant8yas8ythe8 y activity8ylevel8yi
ncreases.
c. Total8yfixed8ycosts8yremain8yco
nstant8yas8ythe8 y activity8ylevel
8yincreases.
d. Total8yvariable8ycosts8yincrease8y
as8ythe8yactivity8ylevel8yincreases
.
1-6
a. Cost8ybehavior:8yCost8ybehavior8yre
fers8 y to8ythe8yway8yin8ywhich8ycost
s8ychange8yin8yresponse8yto8ychang
es8yin8ya8ymeasure8yof8yactivity8ysu
ch8yas8 y sales8yvolume,8yproduction
8yvolume,8yor8yorders8yprocessed.
b. Relevant8yrange:8yThe8yrelevant8yr
ange8 y is8ythe8 y range8yof8yactivity8
ywithin8ywhich8yassumptions 8 y abo
ut8yvariable8yand8 y fixed8ycost8ybeh
avior8yare8 y valid.
1-7 An8 y activity8 y base8 y is8 y a8 y
measure8yof8 y whatever8ycauses8ythe8
yincurrence8yof8ya8yvariable8 y cost.8yE
xamples8yof8yactivity8ybases8yinclude
8yunits8 y produced,8yunits 8ysold,8ylett
ers8ytyped,8ybeds8yin8ya8 y hospital,8y
meals8yserved8yin8ya8ycafe,8yservice8y
calls8ymade,8yetc.
1-8 The8y linear8y assumption8 y is8y reasona
bly
