Solution Manual for Managerial Accounting, 18th Edition by Ray Garrison, Eric Noreen, and Peter Brewer

Solution Manual for Managerial Accounting,
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18th Edition sn




By Ray Garrison, Eric Noreen and Peter Brewer
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Verified Chapter's 1 - 16 | Complete
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,Table of Contents sn sn




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 sn




Managerial Accounting and Cost Concepts sn sn sn sn




Questions


1-1 The three major types of product costs sn sn sn sn sn sn 1-4
in a manufacturing company are direct
sn sn sn sn sn sn a. Variable cost: The variable cost per unit is sn sn sn sn sn sn sn




materials, direct labor, and manufacturing
sn sn sn sn sn constant, but total variable cost changes in
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overhead.
sn direct proportion to changes in volume.
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b. Fixed cost: The total fixed cost is constant
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1-2 within the relevant range. The averagefixed
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a. Direct materials are an integral part of a sn sn sn sn sn sn sn cost per unit varies inversely with changes
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finished product and their costs can be
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conveniently traced to it.
sn sn sn sn c. Mixed cost: A mixed cost contains both sn sn sn sn sn sn




b. Indirect materials are generally small sn sn sn sn variable and fixed cost elements.
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items of material such as glue and nails. They
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may be an integral part of a finished product but
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their costs can be traced to the product only at
sn sn sn sn sn sn sn sn sn sn a. Unit fixed costs decrease as the activity level
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great cost or inconvenience.
sn sn sn sn increases.
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c. Direct labor consists of labor costs that sn sn sn sn sn sn b. Unit variable costs remain constant as the
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can be easily traced to particular products.
sn sn sn sn sn sn sn activity level increases.
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Direct labor is also called ―touch labor.‖
sn sn sn sn sn sn c. Total fixed costs remain constant as the
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d. Indirect labor consists of the labor costs sn sn sn sn sn sn activity level increases.
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of janitors, supervisors, materials handlers, and
sn sn sn sn sn sn d. Total variable costs increase as the activity
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other factory workers that cannot be
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conveniently traced to particular products.
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These labor costs are incurred to support
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production, but the workers involved do not
sn sn sn sn sn sn sn a. Cost behavior: Cost behavior refers to the
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directly work on the product.
sn sn sn sn sn way in which costs change in response to
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e. Manufacturing overhead includes all sn sn sn changes in a measure of activity such as
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manufacturing costs except direct materials and
sn sn sn sn sn sn sales volume, production volume, or orders
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direct labor. Consequently, manufacturing
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overhead includes indirect materials and indirect
sn sn sn sn sn sn b. Relevant range: The relevant range is the sn sn sn sn sn sn




labor as well as other manufacturing costs.
sn sn sn sn sn sn sn range of activity within which assumptions
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about variable and fixed cost behavior are
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1-3 A product cost is any cost involved in sn sn sn sn sn sn sn valid.
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purchasing or manufacturing goods. In the case
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of manufactured goods, these costs consist of
sn sn sn sn sn sn sn 1-7 An activity base is a measure of sn sn sn sn sn sn




direct materials, direct labor, and manufacturing
sn sn sn sn sn sn whatever causes the incurrence of a variable
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overhead. A period cost is a cost that is taken
sn sn sn sn sn sn sn sn sn sn cost. Examples of activity bases include units
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directly to the income statement as an expense
sn sn sn sn sn sn sn sn produced, units sold, letters typed, beds in a
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in the period in which it is incurred.
sn sn sn sn sn sn sn sn 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
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, valid providing that the cost formula is used only
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within the relevant range.
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