Solution Manual for Managerial Accounting,
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18th Edition #t #t
By Ray Garrison, Eric Noreen and Peter Brewer
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Verified Chapter's 1 - 16 | Complete
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,TableofContents #
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Chapter One: Managerial Accounting and Cost Concepts Ch
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apter Two: Job-Order Costing: Calculating Unit Product Costs
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Chapter Three: Job- #t #t
Order Costing: Cost Flows and External Reporting Chapter Four: Process C
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osting
Chapter Five: Cost-Volume-Profit Relationships
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Chapter Six: Variable Costing and Segment Reporting: Tools for Manageme
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nt Chapter Seven: Activity-
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Based Costing: A Tool to Aid Decision Making Chapter Eight: Master
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Budgeting
Chapter Nine: Flexible Budgets and Performance Analysis Chap
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ter Ten: Standard Costs and Variances
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Chapter Eleven: Responsibility Accounting Systems Ch
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apter Twelve: Strategic Performance Measurement
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Chapter Thirteen: Differential Analysis: The Key to Decision Making Cha
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pter Fourteen: Capital Budgeting Decisions
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Chapter Fifteen: Statement ofDCash Flows Ch
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apter Sixteen: Financial Statement Analysis
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,Chapter 1 #
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Managerial Accounting and Cost Concepts #t #t #t #t
Questions
1-1 The three major types of product cos #t #t #t #t #t #t 1-4
t s in a manufacturing company are direct m
#t #t #t #t #t #t #t #t a. Variable cost: The variable costDper unit #t #t #t #t #t #t
at erials, direct labor, and manufacturing ove
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rhe ad. #t nge s in direct proportion to changes in
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volu me. #t #t
1-2 b. Fixed cost: The total fixed cost is constan
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a. Direct materials are an integral part of #t #t #t #t #t #t t within the relevant range. The average
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D a finished productDand their costs can be
# t #t #t #t #t #t #t #t fix ed cost per unitDvaries inversely with c
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con veniently traced to it.
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b. Indirect materials are generally small ite #t #t #t #t #t c. Mixed cost: A mixed cost contains bo#t #t #t #t #t #t
ms of material such as glue and nails. They
#t #t #t #t #t #t #t #t #t #t t h variable and fixed cost elements.
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m ay be an integral part ofDa finished product
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but their costs can be traced to the pro
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duct only at great cost or inconvenience.
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c. Direct labor consists of labor costs t #t #t #t #t #t #t v el increases.#t #t
h at can be easily traced to particular prod
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uct s. #t h e activity level increases.
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Direct labor is also called ―touch labor.‖
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d. Indirect labor consists of the labor cost #t #t #t #t #t #t h e activity level increases.
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# s ofDjanitors, supervisors, materials handler
t #t #t #t #t d. Total variable costs increase as the activi
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s, a nd other factory workers that cannotDbe
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conv eniently traced to particular products. T
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hese l abor costs are incurred to support pro
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duction, but the workers involved do not dire
#t #t #t #t #t #t #t a. Cost behavior: CostDbehavior refers to th
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ctly wor kDon the product.
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e. Manufacturing overhead includes all ma #t #t #t #t onse t o changes in a measure of activit
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nufacturing costs except direct materials and
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d irectDlabor. Consequently, manufacturing ov
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erh ead includes indirect materials and indirec
#t #t #t #t #t #t b. Relevant range: The relevant range is t #t #t #t #t #t #t
t lab or as well as other manufacturing costs.
#t #t #t #t #t #t #t #t h e range of activity within which assu
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mpti ons about variable and fixed cost
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1-3 behavi or are valid. #t #t #t
A product cost is any costDinvolved in
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purchasing or manufacturing goods. In the c
#t #t #t #t #t #t #t 1-7 An activity base is a measure ofDw
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as e of manufactured goods, these costs con
#t #t #t #t #t #t #t hatever causes the incurrence of a variabl
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sist of direct materials, direct labor, and ma
# t #t #t #t #t #t #t e cost. Examples of activity bases include
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nufactu ring overhead. A period cost is a cos
#t #t #t #t #t #t #t #t uni ts produced, units sold, letters typed, b
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t that is t aken directly to the income statem
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ent as an e xpense in the period in which it i
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s incurred.
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, 1-8 The linear assumption is reasonably v
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alid providing that the cost formula is used
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on ly within the relevant range.
#t #t #t #t #t
#t #t #t #t
18th Edition #t #t
By Ray Garrison, Eric Noreen and Peter Brewer
#t #t #t #t #t #t #t #t
Verified Chapter's 1 - 16 | Complete
#t #t #t #t #t #t
,TableofContents #
t #t
Chapter One: Managerial Accounting and Cost Concepts Ch
# t # t # t # t # t # t #t
apter Two: Job-Order Costing: Calculating Unit Product Costs
#t #t #t #t #t #t #t
Chapter Three: Job- #t #t
Order Costing: Cost Flows and External Reporting Chapter Four: Process C
#t #t #t #t #t #t #t #t #t #t
osting
Chapter Five: Cost-Volume-Profit Relationships
#t #t #t
Chapter Six: Variable Costing and Segment Reporting: Tools for Manageme
#t #t #t #t #t #t #t #t #t
nt Chapter Seven: Activity-
#t # t # t
Based Costing: A Tool to Aid Decision Making Chapter Eight: Master
# t # t # t # t # t # t # t #t #t #t #t
Budgeting
Chapter Nine: Flexible Budgets and Performance Analysis Chap
#t #t #t #t #t #t #t
ter Ten: Standard Costs and Variances
#t #t #t #t #t
Chapter Eleven: Responsibility Accounting Systems Ch
#t #t #t #t #t
apter Twelve: Strategic Performance Measurement
#t #t #t #t
Chapter Thirteen: Differential Analysis: The Key to Decision Making Cha
#t #t #t #t #t #t #t #t #t
pter Fourteen: Capital Budgeting Decisions
#t #t #t #t
Chapter Fifteen: Statement ofDCash Flows Ch
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apter Sixteen: Financial Statement Analysis
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,Chapter 1 #
t
Managerial Accounting and Cost Concepts #t #t #t #t
Questions
1-1 The three major types of product cos #t #t #t #t #t #t 1-4
t s in a manufacturing company are direct m
#t #t #t #t #t #t #t #t a. Variable cost: The variable costDper unit #t #t #t #t #t #t
at erials, direct labor, and manufacturing ove
#t #t #t #t #t #t i s constant, but total variable cost cha
# t #t #t #t #t #t #t
rhe ad. #t nge s in direct proportion to changes in
# t #t #t #t #t #t #t
volu me. #t #t
1-2 b. Fixed cost: The total fixed cost is constan
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a. Direct materials are an integral part of #t #t #t #t #t #t t within the relevant range. The average
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D a finished productDand their costs can be
# t #t #t #t #t #t #t #t fix ed cost per unitDvaries inversely with c
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con veniently traced to it.
#t #t #t #t han ges in volume. #t # t #t
b. Indirect materials are generally small ite #t #t #t #t #t c. Mixed cost: A mixed cost contains bo#t #t #t #t #t #t
ms of material such as glue and nails. They
#t #t #t #t #t #t #t #t #t #t t h variable and fixed cost elements.
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m ay be an integral part ofDa finished product
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but their costs can be traced to the pro
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duct only at great cost or inconvenience.
# t #t #t #t #t #t a. Unit fixed costs decrease as the activity le
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c. Direct labor consists of labor costs t #t #t #t #t #t #t v el increases.#t #t
h at can be easily traced to particular prod
#t #t #t #t #t #t #t #t b. Unit variable costs remain constantDas t
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uct s. #t h e activity level increases.
#t #t #t #t
Direct labor is also called ―touch labor.‖
#t #t #t #t #t #t c. Total fixed costs remain constant as t
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d. Indirect labor consists of the labor cost #t #t #t #t #t #t h e activity level increases.
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# s ofDjanitors, supervisors, materials handler
t #t #t #t #t d. Total variable costs increase as the activi
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s, a nd other factory workers that cannotDbe
#t #t #t #t #t #t #t #t t y level increases.
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conv eniently traced to particular products. T
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hese l abor costs are incurred to support pro
#t #t #t #t #t #t #t #t 1-6
duction, but the workers involved do not dire
#t #t #t #t #t #t #t a. Cost behavior: CostDbehavior refers to th
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ctly wor kDon the product.
#t #t #t #t e way in which costs change in resp
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e. Manufacturing overhead includes all ma #t #t #t #t onse t o changes in a measure of activit
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nufacturing costs except direct materials and
#t #t #t #t #t #t # y such a s sales volume, production vol
#t #t # t #t #t #t #t
d irectDlabor. Consequently, manufacturing ov
t #t #t #t #t ume, or ord ers processed. #t #t #t #t
erh ead includes indirect materials and indirec
#t #t #t #t #t #t b. Relevant range: The relevant range is t #t #t #t #t #t #t
t lab or as well as other manufacturing costs.
#t #t #t #t #t #t #t #t h e range of activity within which assu
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mpti ons about variable and fixed cost
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1-3 behavi or are valid. #t #t #t
A product cost is any costDinvolved in
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purchasing or manufacturing goods. In the c
#t #t #t #t #t #t #t 1-7 An activity base is a measure ofDw
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as e of manufactured goods, these costs con
#t #t #t #t #t #t #t hatever causes the incurrence of a variabl
t #t #t #t #t #t #t
sist of direct materials, direct labor, and ma
# t #t #t #t #t #t #t e cost. Examples of activity bases include
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nufactu ring overhead. A period cost is a cos
#t #t #t #t #t #t #t #t uni ts produced, units sold, letters typed, b
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t that is t aken directly to the income statem
#t #t #t #t #t #t #t #t #t eds in a hospital, meals served in a cafe,
# t #t #t #t #t #t #t #t #t
ent as an e xpense in the period in which it i
#t #t #t #t #t #t #t #t #t #t #t servic e calls made, etc.
# t #t #t #t
s incurred.
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, 1-8 The linear assumption is reasonably v
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alid providing that the cost formula is used
#t #t #t #t #t #t #t #t #t
on ly within the relevant range.
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