Solution Manual for Managerial Accounting,
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18th Edition mj
By Ray Garrison, Eric Noreen and Peter Brewer
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Verified Chapter's 1 - 16 | Complete
mj mj mj mj mj mj
,Table of Contentsmj mj
Chapter One: Managerial Accounting and Cost Concepts
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Chapter Two: Job-Order Costing: Calculating Unit Product Costs
mj mj mj mj mj mj mj
Chapter Three: Job-Order Costing: Cost Flows and External Reporting
mj mj mj mj mj mj mj mj
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
mj mj mj mj mj mj mj mj mj
Chapter Seven: Activity-Based Costing: A Tool to Aid Decision Making
mj mj mj mj mj mj mj mj mj
Chapter Eight: Master Budgeting
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Chapter Nine: Flexible Budgets and Performance Analysis
mj mj mj mj mj mj
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
mj mj mj mj mj mj mj mj
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 mj
Managerial Accounting and Cost Concepts mj mj mj mj
Questions
1-1 The three major types of product mj mj mj mj mj 1-4
costs in a manufacturing company are direct
mj mj mj mj mj mj mj a. Variable cost: The variable cost per unit mj mj mj mj mj mj
materials, direct labor, and manufacturing
mj mj mj mj mj is constant, but total variable cost
mj mj mj mj mj mj
overhead.
mj changes in direct proportion to changes
mj mj mj mj mj mj
in volume.
mj mj
1-2 b. Fixed cost: The total fixed cost is constant
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a. Direct materials are an integral part of mj mj mj mj mj mj within the relevant range. The average
mj mj mj mj mj mj
a finished product and their costs can be
mj mj mj mj mj mj mj mj fixed cost per unit varies inversely with
mj mj mj mj mj mj mj
conveniently traced to it.
mj mj mj mj changes in volume.
mj m j mj
b. Indirect materials are generally small mj mj mj mj c. Mixed cost: A mixed cost containsmj mj mj mj mj
items of material such as glue and nails.
mj mj mj mj mj mj mj mj both variable and fixed cost
mj mj mj mj mj
They may be an integral part of a finished
mj mj mj mj mj mj mj mj mj elements.
mj
product but their costs can be traced to the
mj mj mj mj mj mj mj mj mj
product only at great cost or inconvenience.
mj mj mj mj mj mj mj 1-5
c. Direct labor consists of labor costs mj mj mj mj mj a. Unit fixed costs decrease as the activity
mj mj mj mj mj mj
that can be easily traced to particular
mj mj mj mj mj mj mj level increases.
mj mj
products.
mj b. Unit variable costs remain constant as
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Direct labor is also called ―touch labor.‖
mj mj mj mj mj mj the activity level increases.
mj mj mj mj
d. Indirect labor consists of the labor mj mj mj mj mj c. Total fixed costs remain constant as
mj mj mj mj mj
costs of janitors, supervisors, materials
mj mj mj mj mj the activity level increases.
mj mj mj mj
handlers, and other factory workers that
mj mj mj mj mj mj d. Total variable costs increase as the
mj mj mj mj mj
cannot be conveniently traced to particular
mj mj mj mj mj mj activity level increases.
mj mj mj
products. These labor costs are incurred to
mj mj mj mj mj mj mj
support production, but the workers involved
mj mj mj mj mj mj 1-6
do not directly work on the product.
mj mj mj mj mj mj mj a. Cost behavior: Cost behavior refers to
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e. Manufacturing overhead includes all mj mj mj the way in which costs change in
mj mj mj mj mj mj mj
manufacturing costs except direct materials
mj mj mj mj mj response to changes in a measure of
mj mj mj mj mj mj mj
and direct labor. Consequently, manufacturing
mj mj mj mj mj activity such as sales volume, production
mj mj mj mj mj mj
overhead includes indirect materials and
mj mj mj mj mj volume, or orders processed.
mj mj mj mj
indirect labor as well as other manufacturing
mj mj mj mj mj mj mj b. Relevant range: The relevant range is mj mj mj mj mj
costs.
mj the range of activity within which
mj mj mj mj mj mj
assumptions about variable and fixed
mj mj mj mj mj
1-3 A product cost is any cost involved in
mj mj mj mj mj mj mj cost behavior are valid.
mj mj mj mj
purchasing or manufacturing goods. In the
mj mj mj mj mj mj
case of manufactured goods, these costs
mj mj mj mj mj mj 1-7 An activity base is a measure of mj mj mj mj mj mj
consist of direct materials, direct labor, and
mj mj mj mj mj mj mj whatever causes the incurrence of a
mj mj mj mj mj mj
manufacturing overhead. A period cost is a
mj mj mj mj mj mj mj variable cost. Examples of activity bases
mj mj mj mj mj mj
cost that is taken directly to the income
mj mj mj mj mj mj mj mj include units produced, units sold, letters
mj mj mj mj mj mj
statement as an expense in the period in
mj mj mj mj mj mj mj mj typed, beds in a hospital, meals served in
mj mj mj mj mj mj mj mj
which it is incurred.
mj mj mj mj a cafe, service calls made, etc.
mj mj mj mj mj mj
, 1-8 The linear assumption is reasonably
mj mj mj mj
valid providing that the cost formula is used
mj mj mj mj mj mj mj mj
only within the relevant range.
mj mj mj mj mj
mj mj mj mj
18th Edition mj
By Ray Garrison, Eric Noreen and Peter Brewer
mj mj mj mj mj mj mj
Verified Chapter's 1 - 16 | Complete
mj mj mj mj mj mj
,Table of Contentsmj mj
Chapter One: Managerial Accounting and Cost Concepts
mj mj mj mj mj mj
Chapter Two: Job-Order Costing: Calculating Unit Product Costs
mj mj mj mj mj mj mj
Chapter Three: Job-Order Costing: Cost Flows and External Reporting
mj mj mj mj mj mj mj mj
Chapter Four: Process Costing
mj mj mj
Chapter Five: Cost-Volume-Profit Relationships
mj mj mj
Chapter Six: Variable Costing and Segment Reporting: Tools for Management
mj mj mj mj mj mj mj mj mj
Chapter Seven: Activity-Based Costing: A Tool to Aid Decision Making
mj mj mj mj mj mj mj mj mj
Chapter Eight: Master Budgeting
mj mj mj
Chapter Nine: Flexible Budgets and Performance Analysis
mj mj mj mj mj mj
Chapter Ten: Standard Costs and Variances
mj mj mj mj mj
Chapter Eleven: Responsibility Accounting Systems
mj mj mj mj
Chapter Twelve: Strategic Performance Measurement
mj mj mj mj
Chapter Thirteen: Differential Analysis: The Key to Decision Making
mj mj mj mj mj mj mj mj
Chapter Fourteen: Capital Budgeting Decisions
mj mj mj mj
Chapter Fifteen: Statement of Cash Flows
mj mj mj mj mj
Chapter Sixteen: Financial Statement Analysis
mj mj mj mj
,Chapter 1 mj
Managerial Accounting and Cost Concepts mj mj mj mj
Questions
1-1 The three major types of product mj mj mj mj mj 1-4
costs in a manufacturing company are direct
mj mj mj mj mj mj mj a. Variable cost: The variable cost per unit mj mj mj mj mj mj
materials, direct labor, and manufacturing
mj mj mj mj mj is constant, but total variable cost
mj mj mj mj mj mj
overhead.
mj changes in direct proportion to changes
mj mj mj mj mj mj
in volume.
mj mj
1-2 b. Fixed cost: The total fixed cost is constant
mj mj mj mj mj mj mj
a. Direct materials are an integral part of mj mj mj mj mj mj within the relevant range. The average
mj mj mj mj mj mj
a finished product and their costs can be
mj mj mj mj mj mj mj mj fixed cost per unit varies inversely with
mj mj mj mj mj mj mj
conveniently traced to it.
mj mj mj mj changes in volume.
mj m j mj
b. Indirect materials are generally small mj mj mj mj c. Mixed cost: A mixed cost containsmj mj mj mj mj
items of material such as glue and nails.
mj mj mj mj mj mj mj mj both variable and fixed cost
mj mj mj mj mj
They may be an integral part of a finished
mj mj mj mj mj mj mj mj mj elements.
mj
product but their costs can be traced to the
mj mj mj mj mj mj mj mj mj
product only at great cost or inconvenience.
mj mj mj mj mj mj mj 1-5
c. Direct labor consists of labor costs mj mj mj mj mj a. Unit fixed costs decrease as the activity
mj mj mj mj mj mj
that can be easily traced to particular
mj mj mj mj mj mj mj level increases.
mj mj
products.
mj b. Unit variable costs remain constant as
mj mj mj mj mj
Direct labor is also called ―touch labor.‖
mj mj mj mj mj mj the activity level increases.
mj mj mj mj
d. Indirect labor consists of the labor mj mj mj mj mj c. Total fixed costs remain constant as
mj mj mj mj mj
costs of janitors, supervisors, materials
mj mj mj mj mj the activity level increases.
mj mj mj mj
handlers, and other factory workers that
mj mj mj mj mj mj d. Total variable costs increase as the
mj mj mj mj mj
cannot be conveniently traced to particular
mj mj mj mj mj mj activity level increases.
mj mj mj
products. These labor costs are incurred to
mj mj mj mj mj mj mj
support production, but the workers involved
mj mj mj mj mj mj 1-6
do not directly work on the product.
mj mj mj mj mj mj mj a. Cost behavior: Cost behavior refers to
mj mj mj mj mj
e. Manufacturing overhead includes all mj mj mj the way in which costs change in
mj mj mj mj mj mj mj
manufacturing costs except direct materials
mj mj mj mj mj response to changes in a measure of
mj mj mj mj mj mj mj
and direct labor. Consequently, manufacturing
mj mj mj mj mj activity such as sales volume, production
mj mj mj mj mj mj
overhead includes indirect materials and
mj mj mj mj mj volume, or orders processed.
mj mj mj mj
indirect labor as well as other manufacturing
mj mj mj mj mj mj mj b. Relevant range: The relevant range is mj mj mj mj mj
costs.
mj the range of activity within which
mj mj mj mj mj mj
assumptions about variable and fixed
mj mj mj mj mj
1-3 A product cost is any cost involved in
mj mj mj mj mj mj mj cost behavior are valid.
mj mj mj mj
purchasing or manufacturing goods. In the
mj mj mj mj mj mj
case of manufactured goods, these costs
mj mj mj mj mj mj 1-7 An activity base is a measure of mj mj mj mj mj mj
consist of direct materials, direct labor, and
mj mj mj mj mj mj mj whatever causes the incurrence of a
mj mj mj mj mj mj
manufacturing overhead. A period cost is a
mj mj mj mj mj mj mj variable cost. Examples of activity bases
mj mj mj mj mj mj
cost that is taken directly to the income
mj mj mj mj mj mj mj mj include units produced, units sold, letters
mj mj mj mj mj mj
statement as an expense in the period in
mj mj mj mj mj mj mj mj typed, beds in a hospital, meals served in
mj mj mj mj mj mj mj mj
which it is incurred.
mj mj mj mj a cafe, service calls made, etc.
mj mj mj mj mj mj
, 1-8 The linear assumption is reasonably
mj mj mj mj
valid providing that the cost formula is used
mj mj mj mj mj mj mj mj
only within the relevant range.
mj mj mj mj mj
