Solution Manual for Managerial Accounting,
c c c c
18th Edition c
By Ray Garrison, Eric Noreen and Peter Brewer
c c c c c c c c
c Verified Chapter's 1 - 16 | Complete
c c c c c c
,TableofContents c c
Chapter c One: c Managerial c Accounting c and c Cost c Concepts
c Chapter cTwo: cJob-Order cCosting: cCalculating cUnit cProduct cCosts
Chapter cThree: cJob-Order cCosting: cCost cFlows cand cExternal cReporting
c Chapter cFour: cProcess cCosting
Chapter c Five: c Cost-Volume-Profit c Relationships
Chapter cSix: cVariable cCosting cand cSegment cReporting: cTools cfor
c Management cChapter c Seven: c Activity-Based c Costing: c A c Tool c to c Aid
c Decision c Making cChapter cEight: cMaster cBudgeting
Chapter cNine: cFlexible cBudgets cand cPerformance cAnalysis
c Chapter cTen: cStandard cCosts cand cVariances
Chapter cEleven: cResponsibility cAccounting cSystems
c Chapter cTwelve: cStrategic cPerformance cMeasurement
Chapter cThirteen: cDifferential cAnalysis: cThe cKey cto cDecision cMaking
c Chapter cFourteen: cCapital cBudgeting cDecisions
Chapter cFifteen: cStatement cofDCash cFlows
c Chapter cSixteen: cFinancial cStatement
c Analysis
,Chapter1 c
Managerial Accounting and Cost Concepts
c c c c
Questions
1-1 The cthree cmajor ctypes cof cproduct 1-4
ccost cs cin ca cmanufacturing ccompany care cdirect a. Variable ccost: cThe cvariable ccostDper cunit ci
cmat cerials, cdirect clabor, cand cmanufacturing c s cconstant, cbut ctotal cvariable ccost
coverhe cad. cchange c s cin cdirect cproportion cto
cchanges cin cvolu cme.
1-2 b. Fixed ccost: cThe ctotal cfixed ccost cis cconstant
a. Direct cmaterials care can cintegral cpart cwithin cthe crelevant crange. cThe caverage
cofD c a cfinished cproductDand ctheir ccosts ccan cfix ced ccost cper cunitDvaries cinversely cwith
cbe ccon cveniently ctraced cto cit. cchan cges c in cvolume.
b. Indirect cmaterials care cgenerally csmall cite c. Mixed ccost: cA cmixed ccost ccontains
cms cof cmaterial csuch cas cglue cand cnails. cThey cm cbot ch cvariable cand cfixed ccost
cay cbe can cintegral cpart cofDa cfinished cproduct celements.
cbut ctheir c costs c can c be c traced c to c the
c product c only cat cgreat ccost cor cinconvenience. 1-5
c. Direct clabor cconsists cof clabor ccosts cth a. Unit cfixed ccosts cdecrease cas cthe cactivity
cat ccan cbe ceasily ctraced cto cparticular clev cel cincreases.
cproduct cs. b. Unit cvariable ccosts cremain cconstantDas
Direct clabor cis calso ccalled c―touch clabor.‖ cth ce cactivity clevel cincreases.
d. Indirect clabor cconsists cof cthe clabor ccost c. Total cfixed ccosts cremain cconstant cas
c s cofDjanitors, csupervisors, cmaterials chandlers, cth ce cactivity clevel cincreases.
ca cnd cother cfactory cworkers cthat ccannotDbe d. Total cvariable ccosts cincrease cas cthe
cconv ceniently ctraced cto cparticular cproducts. cactivit cy clevel cincreases.
cThese cl cabor ccosts care cincurred cto csupport
cproduction, cbut cthe cworkers cinvolved cdo cnot 1-6
cdirectly cwor ckDon cthe cproduct. a. Cost cbehavior: cCostDbehavior crefers cto cthe
e. Manufacturing coverhead cincludes call cma cway c in c which c costs c change c in
cnufacturing ccosts cexcept cdirect cmaterials cand c response c t co cchanges cin ca cmeasure cof
cd cirectDlabor. cConsequently, cmanufacturing cactivity csuch ca c s csales cvolume,
coverh cead cincludes cindirect cmaterials cand cproduction cvolume, cor cord cers cprocessed.
cindirect clab cor cas cwell cas cother cmanufacturing b. Relevant crange: cThe crelevant crange cis cth
ccosts. ce crange cof cactivity cwithin cwhich
cassumpti cons cabout cvariable cand cfixed
1-3 ccost cbehavi cor care cvalid.
A cproduct ccost cis cany ccostDinvolved cin
cpurchasing cor cmanufacturing cgoods. cIn cthe 1-7 An cactivity cbase cis ca cmeasure cofDw
ccas ce cof cmanufactured cgoods, cthese ccosts chatever ccauses cthe cincurrence cof ca cvariable
cconsist c of cdirect cmaterials, cdirect clabor, cand ccost. cExamples cof cactivity cbases cinclude cuni
cmanufactu cring coverhead. cA cperiod ccost cis ca cts cproduced, cunits csold, cletters ctyped, cbeds
ccost cthat cis ct caken cdirectly cto cthe cincome c in ca chospital, cmeals cserved cin ca ccafe,
cstatement cas can ce cxpense cin cthe cperiod cin cservic c e ccalls cmade, cetc.
cwhich cit cis cincurred.
, 1-8 The clinear cassumption cis creasonably cv
calid cproviding cthat cthe ccost cformula cis cused
con cly cwithin cthe crelevant crange.
c c c c
18th Edition c
By Ray Garrison, Eric Noreen and Peter Brewer
c c c c c c c c
c Verified Chapter's 1 - 16 | Complete
c c c c c c
,TableofContents c c
Chapter c One: c Managerial c Accounting c and c Cost c Concepts
c Chapter cTwo: cJob-Order cCosting: cCalculating cUnit cProduct cCosts
Chapter cThree: cJob-Order cCosting: cCost cFlows cand cExternal cReporting
c Chapter cFour: cProcess cCosting
Chapter c Five: c Cost-Volume-Profit c Relationships
Chapter cSix: cVariable cCosting cand cSegment cReporting: cTools cfor
c Management cChapter c Seven: c Activity-Based c Costing: c A c Tool c to c Aid
c Decision c Making cChapter cEight: cMaster cBudgeting
Chapter cNine: cFlexible cBudgets cand cPerformance cAnalysis
c Chapter cTen: cStandard cCosts cand cVariances
Chapter cEleven: cResponsibility cAccounting cSystems
c Chapter cTwelve: cStrategic cPerformance cMeasurement
Chapter cThirteen: cDifferential cAnalysis: cThe cKey cto cDecision cMaking
c Chapter cFourteen: cCapital cBudgeting cDecisions
Chapter cFifteen: cStatement cofDCash cFlows
c Chapter cSixteen: cFinancial cStatement
c Analysis
,Chapter1 c
Managerial Accounting and Cost Concepts
c c c c
Questions
1-1 The cthree cmajor ctypes cof cproduct 1-4
ccost cs cin ca cmanufacturing ccompany care cdirect a. Variable ccost: cThe cvariable ccostDper cunit ci
cmat cerials, cdirect clabor, cand cmanufacturing c s cconstant, cbut ctotal cvariable ccost
coverhe cad. cchange c s cin cdirect cproportion cto
cchanges cin cvolu cme.
1-2 b. Fixed ccost: cThe ctotal cfixed ccost cis cconstant
a. Direct cmaterials care can cintegral cpart cwithin cthe crelevant crange. cThe caverage
cofD c a cfinished cproductDand ctheir ccosts ccan cfix ced ccost cper cunitDvaries cinversely cwith
cbe ccon cveniently ctraced cto cit. cchan cges c in cvolume.
b. Indirect cmaterials care cgenerally csmall cite c. Mixed ccost: cA cmixed ccost ccontains
cms cof cmaterial csuch cas cglue cand cnails. cThey cm cbot ch cvariable cand cfixed ccost
cay cbe can cintegral cpart cofDa cfinished cproduct celements.
cbut ctheir c costs c can c be c traced c to c the
c product c only cat cgreat ccost cor cinconvenience. 1-5
c. Direct clabor cconsists cof clabor ccosts cth a. Unit cfixed ccosts cdecrease cas cthe cactivity
cat ccan cbe ceasily ctraced cto cparticular clev cel cincreases.
cproduct cs. b. Unit cvariable ccosts cremain cconstantDas
Direct clabor cis calso ccalled c―touch clabor.‖ cth ce cactivity clevel cincreases.
d. Indirect clabor cconsists cof cthe clabor ccost c. Total cfixed ccosts cremain cconstant cas
c s cofDjanitors, csupervisors, cmaterials chandlers, cth ce cactivity clevel cincreases.
ca cnd cother cfactory cworkers cthat ccannotDbe d. Total cvariable ccosts cincrease cas cthe
cconv ceniently ctraced cto cparticular cproducts. cactivit cy clevel cincreases.
cThese cl cabor ccosts care cincurred cto csupport
cproduction, cbut cthe cworkers cinvolved cdo cnot 1-6
cdirectly cwor ckDon cthe cproduct. a. Cost cbehavior: cCostDbehavior crefers cto cthe
e. Manufacturing coverhead cincludes call cma cway c in c which c costs c change c in
cnufacturing ccosts cexcept cdirect cmaterials cand c response c t co cchanges cin ca cmeasure cof
cd cirectDlabor. cConsequently, cmanufacturing cactivity csuch ca c s csales cvolume,
coverh cead cincludes cindirect cmaterials cand cproduction cvolume, cor cord cers cprocessed.
cindirect clab cor cas cwell cas cother cmanufacturing b. Relevant crange: cThe crelevant crange cis cth
ccosts. ce crange cof cactivity cwithin cwhich
cassumpti cons cabout cvariable cand cfixed
1-3 ccost cbehavi cor care cvalid.
A cproduct ccost cis cany ccostDinvolved cin
cpurchasing cor cmanufacturing cgoods. cIn cthe 1-7 An cactivity cbase cis ca cmeasure cofDw
ccas ce cof cmanufactured cgoods, cthese ccosts chatever ccauses cthe cincurrence cof ca cvariable
cconsist c of cdirect cmaterials, cdirect clabor, cand ccost. cExamples cof cactivity cbases cinclude cuni
cmanufactu cring coverhead. cA cperiod ccost cis ca cts cproduced, cunits csold, cletters ctyped, cbeds
ccost cthat cis ct caken cdirectly cto cthe cincome c in ca chospital, cmeals cserved cin ca ccafe,
cstatement cas can ce cxpense cin cthe cperiod cin cservic c e ccalls cmade, cetc.
cwhich cit cis cincurred.
, 1-8 The clinear cassumption cis creasonably cv
calid cproviding cthat cthe ccost cformula cis cused
con cly cwithin cthe crelevant crange.
