,ACCESS Test Bank for Managerial Accounting for Managers 6th Edition Noree
m m m m m m m m m m
n
Chapter 1 m
mManagerial Accounting and Cost Concepts
m m m m
Questions
1-1 Themthreemmajor mtypesmofmproductmcost 1-4
sminmammanufacturingmcompany maremdirectmmat a . Variablemcost: mThemvariablemcostmpermunitmi
erials,mdirectmlabor,mandmmanufacturingmoverhe smconstant,mbutmtotalmvariablemcostmchange
ad. sminmdirectmproportionmtomchangesminmvolu
me.
1-2 b. Fixedmcost: mThemtotalmfixedmcostmismconstant
a . Directmmaterialsmaremanmintegralmpartmof mwithinmthemrelevantmrange.mThe maveragemfix
mamfinishedmproductmandmtheir mcosts mcanmbemco edmcostmpermunitmvariesminversely mwithmchan
nveniently mtracedmtomit. gesm inmvolume.
b. Indirectmmaterialsmaremgenerally msmallmite c. Mixedmcost: mAmmixedmcostmcontainsmbot
msmofmmaterialmsuchmasmgluemandmnails.mThey mm hmvariablemandmfixedmcostmelements.
ay mbemanmintegralmpartmofmamfinishedmproductmbut
mtheir mcosts mcanmbemtracedmtomthemproductmonly m 1-5
atmgreatmcostmorminconvenience. a . Unitmfixedmcostsmdecreasemasmthemactivity mlev
c. Directmlabor mconsistsmofmlabormcostsmth elmincreases.
atmcanmbemeasily mtracedmtomparticular mproduct b. Unitmvariablemcostsmremainmconstantmasmth
s.mDirectmlabormismalsomcalledm“touchmlabor.” emactivity mlevelmincreases.
d. Indirectmlabormconsistsmofmthemlabormcost c. Totalmfixedmcostsmremainmconstantmasmth
smofmjanitors,msupervisors,mmaterialsmhandlers,m emactivity mlevelmincreases.
andmothermfactory mworkersmthatmcannotmbemcon d. Totalmvariablemcostsmincreasemasmthemactivit
veniently mtracedmtomparticular mproducts.mThese y mlevelmincreases.
mlabor mcosts mare mincurredmtomsupportmproductio
n,mbutmthemworkersminvolvedmdomnotmdirectly mw 1-6
ork monmthemproduct. a . Costmbehavior: mCostmbehavior mrefersmtomth
e . Manufacturingmoverheadmincludesmallmma emway minmwhichmcostsmchangeminmresponse
nufacturingmcostsmexceptmdirectmmaterialsmandmd mtomchanges minmammeasure mofmactivity msuch
irectmlabor.mConsequently,mmanufacturingmoverh masmsales mvolume,mproductionmvolume,mor mo
eadmincludesmindirectmmaterialsmandmindirectmlab rdersmprocessed.
ormasmwellmasmothermmanufacturingmcosts. b. Relevantmrange: mThemrelevantmrangemismth
emrangemofmactivity mwithinmwhichmassumpti
1-3 onsmaboutmvariablemandmfixedmcostmbehavi
Amproductmcostmismany mcostminvolvedminm ormaremvalid.
purchasingmormmanufacturingmgoods.mInmthemcas
emofmmanufacturedmgoods,mthesemcostsmconsistm 1-7 Anmactivity mbasemismammeasuremofmw
ofmdirectmmaterials,mdirectmlabor,mandmmanufactu hatever mcausesmthemincurrencemofmamvariable
ringmoverhead.mAmperiodmcostmismamcostmthatmismt mcost.mExamples mofmactivity mbases minclude mun
akenmdirectly mtomthemincomemstatementmasmanme itsmproduced,munitsmsold,mlettersmtyped,mbeds
xpenseminmthemperiodminmwhichmitmismincurred. minmamhospital,mmeals mservedminmamcafe,mservi
cemcallsmmade,metc.
1-8 Themlinear massumptionmismreasonably mva
lidmprovidingmthatmthemcostmformulamismusedmonly
mwithinmthemrelevantmrange.
©mMcGrawmHill mLLC.mAll mrightsmreserved.mNomreproductionmormdistributionmwithoutmthempriormwrittenmconsent mof mMcGrawmHill mLLC.
mynursytest.store
,ACCESS Test Bank for Managerial Accounting for Managers 6th Edition Noree
m m m m m m m m m m
n
SolutionsmManual,mChapter m1 1
mynursytest.store
, ACCESS Test Bank for Managerial Accounting for Managers 6th Edition Noree
m m m m m m m m m m
n
1-9 Amdiscretionary mfixedmcostmhasmamfairl 1-11 Themtraditionalmapproachmorganizesmcost
y mshortmplanningmhorizon— smby mfunction,msuchmasmproduction,mselling,mand
usually mamyear.mSuchmcostsmarisemfrommannual madministration. mWithinmamfunctionalmarea,mfixed
mdecisions mby mmanagementmtomspendmonmcert mandmvariable mcosts mare mintermingled. mThe mcont
ainmfixedmcostmitems,msuchmasmadvertising,mres ributionmapproachmincomemstatementmorganizesm
earch,mandmmanagementmdevelopment.mAmco costsmby mbehavior,mfirstmdeductingmvariablemexp
mmittedmfixedmcostmhasmamlongmplanningmhoriz ensesmtomobtainmcontributionmmargin,mandmthenm
on— deductingmfixedmexpensesmtomobtainmnetmoperati
generally mmany myears.mSuchmcostsmrelatemtoma ngmincome.
mcompany’s minvestmentminmfacilities,mequipme
nt,mandmbasicmorganization.mOncemsuchmcostsm 1-12 Themcontributionmmarginmismtotalmsale
havembeenmincurred,mthey marem“lockedmin”mfor smrevenuemlessmtotalmvariablemexpenses.
mmany myears.
1-13 Amdifferentialmcostmismamcostmthatmdiffe
1-10 Yes.mAsmthemanticipatedmlevelmofmactivity rsmbetweenmalternativesminmamdecision.mAnmop
mchanges,mthemlevelmofmfixedmcosts mneededmtoms portunity mcostmismthempotentialmbenefitmthatmism
upportmoperationsmmay malsomchange.mMostmfixed givenmupmwhenmonemalternativemismselectedmov
mcosts mare madjustedmupwardmandmdownwardminml ermanother.mAmsunk mcostmismamcostmthatmhasmalr
argemsteps,mrather mthanmbeingmabsolutely mfixedma eady mbeenmincurredmandmcannotmbemalteredmb
tmonemlevelmformallmrangesmofmactivity. y many mdecisionmtakenmnow morminmthemfuture.
1-14 No,mdifferentialmcostsmcanmbemeither mva
riablemormfixed.mFormexample,mthemalternatives m
mightmconsistmofmpurchasingmonemmachinemrath
ermthanmanother mtommakemamproduct.mThemdiffer
encembetweenmthemfixedmcostsmofmpurchasingmt
hemtwommachinesmismamdifferentialmcost.
©mMcGrawmHill mLLC.mAll mrightsmreserved.mNomreproductionmormdistributionmwithoutmthempriormwrittenmconsent mof mMcGrawmHill mLLC.
2 ManagerialmAccountingmformManagers,m6thmedition
mynursytest.store
m m m m m m m m m m
n
Chapter 1 m
mManagerial Accounting and Cost Concepts
m m m m
Questions
1-1 Themthreemmajor mtypesmofmproductmcost 1-4
sminmammanufacturingmcompany maremdirectmmat a . Variablemcost: mThemvariablemcostmpermunitmi
erials,mdirectmlabor,mandmmanufacturingmoverhe smconstant,mbutmtotalmvariablemcostmchange
ad. sminmdirectmproportionmtomchangesminmvolu
me.
1-2 b. Fixedmcost: mThemtotalmfixedmcostmismconstant
a . Directmmaterialsmaremanmintegralmpartmof mwithinmthemrelevantmrange.mThe maveragemfix
mamfinishedmproductmandmtheir mcosts mcanmbemco edmcostmpermunitmvariesminversely mwithmchan
nveniently mtracedmtomit. gesm inmvolume.
b. Indirectmmaterialsmaremgenerally msmallmite c. Mixedmcost: mAmmixedmcostmcontainsmbot
msmofmmaterialmsuchmasmgluemandmnails.mThey mm hmvariablemandmfixedmcostmelements.
ay mbemanmintegralmpartmofmamfinishedmproductmbut
mtheir mcosts mcanmbemtracedmtomthemproductmonly m 1-5
atmgreatmcostmorminconvenience. a . Unitmfixedmcostsmdecreasemasmthemactivity mlev
c. Directmlabor mconsistsmofmlabormcostsmth elmincreases.
atmcanmbemeasily mtracedmtomparticular mproduct b. Unitmvariablemcostsmremainmconstantmasmth
s.mDirectmlabormismalsomcalledm“touchmlabor.” emactivity mlevelmincreases.
d. Indirectmlabormconsistsmofmthemlabormcost c. Totalmfixedmcostsmremainmconstantmasmth
smofmjanitors,msupervisors,mmaterialsmhandlers,m emactivity mlevelmincreases.
andmothermfactory mworkersmthatmcannotmbemcon d. Totalmvariablemcostsmincreasemasmthemactivit
veniently mtracedmtomparticular mproducts.mThese y mlevelmincreases.
mlabor mcosts mare mincurredmtomsupportmproductio
n,mbutmthemworkersminvolvedmdomnotmdirectly mw 1-6
ork monmthemproduct. a . Costmbehavior: mCostmbehavior mrefersmtomth
e . Manufacturingmoverheadmincludesmallmma emway minmwhichmcostsmchangeminmresponse
nufacturingmcostsmexceptmdirectmmaterialsmandmd mtomchanges minmammeasure mofmactivity msuch
irectmlabor.mConsequently,mmanufacturingmoverh masmsales mvolume,mproductionmvolume,mor mo
eadmincludesmindirectmmaterialsmandmindirectmlab rdersmprocessed.
ormasmwellmasmothermmanufacturingmcosts. b. Relevantmrange: mThemrelevantmrangemismth
emrangemofmactivity mwithinmwhichmassumpti
1-3 onsmaboutmvariablemandmfixedmcostmbehavi
Amproductmcostmismany mcostminvolvedminm ormaremvalid.
purchasingmormmanufacturingmgoods.mInmthemcas
emofmmanufacturedmgoods,mthesemcostsmconsistm 1-7 Anmactivity mbasemismammeasuremofmw
ofmdirectmmaterials,mdirectmlabor,mandmmanufactu hatever mcausesmthemincurrencemofmamvariable
ringmoverhead.mAmperiodmcostmismamcostmthatmismt mcost.mExamples mofmactivity mbases minclude mun
akenmdirectly mtomthemincomemstatementmasmanme itsmproduced,munitsmsold,mlettersmtyped,mbeds
xpenseminmthemperiodminmwhichmitmismincurred. minmamhospital,mmeals mservedminmamcafe,mservi
cemcallsmmade,metc.
1-8 Themlinear massumptionmismreasonably mva
lidmprovidingmthatmthemcostmformulamismusedmonly
mwithinmthemrelevantmrange.
©mMcGrawmHill mLLC.mAll mrightsmreserved.mNomreproductionmormdistributionmwithoutmthempriormwrittenmconsent mof mMcGrawmHill mLLC.
mynursytest.store
,ACCESS Test Bank for Managerial Accounting for Managers 6th Edition Noree
m m m m m m m m m m
n
SolutionsmManual,mChapter m1 1
mynursytest.store
, ACCESS Test Bank for Managerial Accounting for Managers 6th Edition Noree
m m m m m m m m m m
n
1-9 Amdiscretionary mfixedmcostmhasmamfairl 1-11 Themtraditionalmapproachmorganizesmcost
y mshortmplanningmhorizon— smby mfunction,msuchmasmproduction,mselling,mand
usually mamyear.mSuchmcostsmarisemfrommannual madministration. mWithinmamfunctionalmarea,mfixed
mdecisions mby mmanagementmtomspendmonmcert mandmvariable mcosts mare mintermingled. mThe mcont
ainmfixedmcostmitems,msuchmasmadvertising,mres ributionmapproachmincomemstatementmorganizesm
earch,mandmmanagementmdevelopment.mAmco costsmby mbehavior,mfirstmdeductingmvariablemexp
mmittedmfixedmcostmhasmamlongmplanningmhoriz ensesmtomobtainmcontributionmmargin,mandmthenm
on— deductingmfixedmexpensesmtomobtainmnetmoperati
generally mmany myears.mSuchmcostsmrelatemtoma ngmincome.
mcompany’s minvestmentminmfacilities,mequipme
nt,mandmbasicmorganization.mOncemsuchmcostsm 1-12 Themcontributionmmarginmismtotalmsale
havembeenmincurred,mthey marem“lockedmin”mfor smrevenuemlessmtotalmvariablemexpenses.
mmany myears.
1-13 Amdifferentialmcostmismamcostmthatmdiffe
1-10 Yes.mAsmthemanticipatedmlevelmofmactivity rsmbetweenmalternativesminmamdecision.mAnmop
mchanges,mthemlevelmofmfixedmcosts mneededmtoms portunity mcostmismthempotentialmbenefitmthatmism
upportmoperationsmmay malsomchange.mMostmfixed givenmupmwhenmonemalternativemismselectedmov
mcosts mare madjustedmupwardmandmdownwardminml ermanother.mAmsunk mcostmismamcostmthatmhasmalr
argemsteps,mrather mthanmbeingmabsolutely mfixedma eady mbeenmincurredmandmcannotmbemalteredmb
tmonemlevelmformallmrangesmofmactivity. y many mdecisionmtakenmnow morminmthemfuture.
1-14 No,mdifferentialmcostsmcanmbemeither mva
riablemormfixed.mFormexample,mthemalternatives m
mightmconsistmofmpurchasingmonemmachinemrath
ermthanmanother mtommakemamproduct.mThemdiffer
encembetweenmthemfixedmcostsmofmpurchasingmt
hemtwommachinesmismamdifferentialmcost.
©mMcGrawmHill mLLC.mAll mrightsmreserved.mNomreproductionmormdistributionmwithoutmthempriormwrittenmconsent mof mMcGrawmHill mLLC.
2 ManagerialmAccountingmformManagers,m6thmedition
mynursytest.store
