Managerial Accounting
18th Edition
ST
UV
SOLUTIONS
IA
MANUAL
_A
PP
Ray Garrison
RO
Eric Noreen
Peter Brewer
VE
────────────────────────────────────────────────────
Comprehensive Solutions Manual for Instructors
D?
and Students
© Ray Garrison, Eric Noreen & Peter Brewer. All rights reserved. Reproduction or
?
distribution without permission is prohibited.
© Successhands
, Solutions Manual for Managerial Accounting (18th Edition)
Ray Garrison, Eric Noreen & Peter Brewer
ISBN: 9781266634505
ST
UNIT 1: FOUNDATIONS OF MANAGERIAL ACCOUNTING
1. Managerial Accounting and Cost Concepts
UV
UNIT 2: PRODUCT COSTING SYSTEMS
2. Job-Order Costing: Calculating Unit Product Costs
3. Job-Order Costing: Cost Flows and External Reporting
4. Process Costing
IA
UNIT 3: COST–VOLUME–PROFIT AND REPORTING APPROACHES
5. Cost-Volume-Profit Relationships
_A
6. Variable Costing and Segment Reporting: Tools for Management
UNIT 4: ACTIVITY-BASED COSTING AND BUDGETING
7. Activity-Based Costing: A Tool to Aid Decision Making
PP
8. Master Budgeting
9. Flexible Budgets and Performance Analysis
UNIT 5: STANDARD COSTING AND PERFORMANCE
RO
MEASUREMENT
10. Standard Costs and Variances
11. Responsibility Accounting Systems
12. Strategic Performance Measurement
VE
UNIT 6: DECISION MAKING AND CAPITAL INVESTMENT
13. Differential Analysis: The Key to Decision Making
14. Capital Budgeting Decisions
D?
UNIT 7: FINANCIAL STATEMENTS AND ANALYSIS
15. Statement of Cash Flows
16. Financial Statement Analysis
?
© Successhands
, Solution Manual For
Managerial Accounting 18th Edition; Ray Garrison, Eric
Nooren & Peter Brewer
Chapter 1
ST
Managerial Accounting and Cost Concepts
UV
Questions
1-1 The three major types of product costs 1-4
in a manufacturing company are direct a. Variable cost: The variable cost per unit is
materials, direct labor, and manufacturing constant, but total variable cost changes in
overhead. direct proportion to changes in volume.
IA
b. Fixed cost: The total fixed cost is constant
1-2 within the relevant range. The average fixed
a. Direct materials are an integral part of a cost per unit varies inversely with changes
finished product and their costs can be in volume.
_A
conveniently traced to it. c. Mixed cost: A mixed cost contains both
b. Indirect materials are generally small variable and fixed cost elements.
items of material such as glue and nails. They
may be an integral part of a finished product but 1-5
their costs can be traced to the product only at a. Unit fixed costs decrease as the activity level
great cost or inconvenience. increases.
PP
c. Direct labor consists of labor costs that b. Unit variable costs remain constant as the
can be easily traced to particular products. activity level increases.
Direct labor is also called ―touch labor.‖ c. Total fixed costs remain constant as the
d. Indirect labor consists of the labor costs activity level increases.
of janitors, supervisors, materials handlers, and d. Total variable costs increase as the activity
other factory workers that cannot be level increases.
RO
conveniently traced to particular products.
These labor costs are incurred to support 1-6
production, but the workers involved do not a. Cost behavior: Cost behavior refers to the
directly work on the product. way in which costs change in response to
e. Manufacturing overhead includes all changes in a measure of activity such as
manufacturing costs except direct materials and sales volume, production volume, or orders
VE
direct labor. Consequently, manufacturing processed.
overhead includes indirect materials and indirect b. Relevant range: The relevant range is the
labor as well as other manufacturing costs. range of activity within which assumptions
about variable and fixed cost behavior are
1-3 A product cost is any cost involved in valid.
purchasing or manufacturing goods. In the case
D?
of manufactured goods, these costs consist of 1-7 An activity base is a measure of
direct materials, direct labor, and manufacturing whatever causes the incurrence of a variable
overhead. A period cost is a cost that is taken cost. Examples of activity bases include units
directly to the income statement as an expense produced, units sold, letters typed, beds in a
in the period in which it is incurred. hospital, meals served in a cafe, service calls
made, etc.
?
1-8 The linear assumption is reasonably
valid providing that the cost formula is used only
within the relevant range.
Managerial Accounting 18th Edition, Solutions Manual, Chapter 1 1
, © McGraw Hill LLC. All rights reserved. No reproduction or distribution without the prior written consent
of McGraw Hill LLC.
ST
UV
IA
_A
PP
RO
VE
D?
?
Managerial Accounting 18th Edition, Solutions Manual, Chapter 1 1
18th Edition
ST
UV
SOLUTIONS
IA
MANUAL
_A
PP
Ray Garrison
RO
Eric Noreen
Peter Brewer
VE
────────────────────────────────────────────────────
Comprehensive Solutions Manual for Instructors
D?
and Students
© Ray Garrison, Eric Noreen & Peter Brewer. All rights reserved. Reproduction or
?
distribution without permission is prohibited.
© Successhands
, Solutions Manual for Managerial Accounting (18th Edition)
Ray Garrison, Eric Noreen & Peter Brewer
ISBN: 9781266634505
ST
UNIT 1: FOUNDATIONS OF MANAGERIAL ACCOUNTING
1. Managerial Accounting and Cost Concepts
UV
UNIT 2: PRODUCT COSTING SYSTEMS
2. Job-Order Costing: Calculating Unit Product Costs
3. Job-Order Costing: Cost Flows and External Reporting
4. Process Costing
IA
UNIT 3: COST–VOLUME–PROFIT AND REPORTING APPROACHES
5. Cost-Volume-Profit Relationships
_A
6. Variable Costing and Segment Reporting: Tools for Management
UNIT 4: ACTIVITY-BASED COSTING AND BUDGETING
7. Activity-Based Costing: A Tool to Aid Decision Making
PP
8. Master Budgeting
9. Flexible Budgets and Performance Analysis
UNIT 5: STANDARD COSTING AND PERFORMANCE
RO
MEASUREMENT
10. Standard Costs and Variances
11. Responsibility Accounting Systems
12. Strategic Performance Measurement
VE
UNIT 6: DECISION MAKING AND CAPITAL INVESTMENT
13. Differential Analysis: The Key to Decision Making
14. Capital Budgeting Decisions
D?
UNIT 7: FINANCIAL STATEMENTS AND ANALYSIS
15. Statement of Cash Flows
16. Financial Statement Analysis
?
© Successhands
, Solution Manual For
Managerial Accounting 18th Edition; Ray Garrison, Eric
Nooren & Peter Brewer
Chapter 1
ST
Managerial Accounting and Cost Concepts
UV
Questions
1-1 The three major types of product costs 1-4
in a manufacturing company are direct a. Variable cost: The variable cost per unit is
materials, direct labor, and manufacturing constant, but total variable cost changes in
overhead. direct proportion to changes in volume.
IA
b. Fixed cost: The total fixed cost is constant
1-2 within the relevant range. The average fixed
a. Direct materials are an integral part of a cost per unit varies inversely with changes
finished product and their costs can be in volume.
_A
conveniently traced to it. c. Mixed cost: A mixed cost contains both
b. Indirect materials are generally small variable and fixed cost elements.
items of material such as glue and nails. They
may be an integral part of a finished product but 1-5
their costs can be traced to the product only at a. Unit fixed costs decrease as the activity level
great cost or inconvenience. increases.
PP
c. Direct labor consists of labor costs that b. Unit variable costs remain constant as the
can be easily traced to particular products. activity level increases.
Direct labor is also called ―touch labor.‖ c. Total fixed costs remain constant as the
d. Indirect labor consists of the labor costs activity level increases.
of janitors, supervisors, materials handlers, and d. Total variable costs increase as the activity
other factory workers that cannot be level increases.
RO
conveniently traced to particular products.
These labor costs are incurred to support 1-6
production, but the workers involved do not a. Cost behavior: Cost behavior refers to the
directly work on the product. way in which costs change in response to
e. Manufacturing overhead includes all changes in a measure of activity such as
manufacturing costs except direct materials and sales volume, production volume, or orders
VE
direct labor. Consequently, manufacturing processed.
overhead includes indirect materials and indirect b. Relevant range: The relevant range is the
labor as well as other manufacturing costs. range of activity within which assumptions
about variable and fixed cost behavior are
1-3 A product cost is any cost involved in valid.
purchasing or manufacturing goods. In the case
D?
of manufactured goods, these costs consist of 1-7 An activity base is a measure of
direct materials, direct labor, and manufacturing whatever causes the incurrence of a variable
overhead. A period cost is a cost that is taken cost. Examples of activity bases include units
directly to the income statement as an expense produced, units sold, letters typed, beds in a
in the period in which it is incurred. hospital, meals served in a cafe, service calls
made, etc.
?
1-8 The linear assumption is reasonably
valid providing that the cost formula is used only
within the relevant range.
Managerial Accounting 18th Edition, Solutions Manual, Chapter 1 1
, © McGraw Hill LLC. All rights reserved. No reproduction or distribution without the prior written consent
of McGraw Hill LLC.
ST
UV
IA
_A
PP
RO
VE
D?
?
Managerial Accounting 18th Edition, Solutions Manual, Chapter 1 1
