,SOLUTION MANUAL FOR Managerial Accounting
10e Weygandt
Notes
1- The file is chapter after chapter.
2- We have shown you few pages sample.
3- The file contains all Appendix and Excel sheet
if it exists.
4- We have all what you need, we make update
at every time. There are many new editions
waiting you.
5- If you think you purchased the wrong file You
can contact us at every time, we can replace it
with true one.
Our email:
, CHAPTER 1
Managerial Accounting
Learning Objectives
1. Identify the features of managerial accounting and the functions of management.
2. Describe the classes of manufacturing costs and the differences between product and period
costs.
3. Demonstrate how to compute cost of goods manufactured and prepare financial statements for a
manufacturer.
4. Discuss trends in managerial accounting.
Copyright © 2024 John Wiley & Sons, Inc. Weygandt, Managerial Accounting 10/e, Solutions Manual (For Instructor Use Only) 1-1
, ANSWERS TO QUESTIONS
1. (a) Not true. Managerial accounting is a field of accounting that provides economic and financial
information for managers and other internal users.
(b) Joe is incorrect. Managerial accounting applies to all types of businesses—service,
merchandising, and manufacturing.
LO1 BT: C Difficulty: Easy TOT: 3 min. AACSB: Knowledge AICPA AC: Measurement, Analysis and Interpretation IMA: Reporting &
Control: Cost Accounting
2. (a) Financial accounting is concerned primarily with external users such as stockholders,
creditors, and regulators. In contrast, managerial accounting is concerned primarily with
internal users such as officers and managers.
(b) Financial statements are the end product of financial accounting. These statements are
prepared quarterly and annually. In managerial accounting, internal reports may be
prepared as frequently as needed.
(c) The purpose of financial accounting is to provide general-purpose information for external
users. The purpose of managerial accounting is to provide special-purpose information for
specific internal decisions.
LO1 BT: C Difficulty: Easy TOT: 5 min. AACSB: Knowledge AICPA AC: Measurement, Analysis and Interpretation IMA: Reporting &
Control: Cost Accounting
3. Differences in the content of the reports are as follows:
Financial Managerial
Pertains to business as a whole and is Pertains to subunits of the business and
highly aggregated. may be very detailed.
Limited to accrual accounting and cost data. Extends beyond accrual accounting
Generally accepted accounting principles. system to any relevant data.
Standard is relevance to decisions.
In financial accounting, financial statements are verified annually through an independent audit
by certified public accountants. There are no independent audits of internal reports prepared by
managerial accountants.
LO1 BT: C Difficulty: Easy TOT: 5 min. AACSB: None AICPA AC: Measurement, Analysis and Interpretation IMA: Reporting & Control:
Cost Accounting
4. Linda should know that the management of an organization performs three broad functions:
(1) Planning requires management to look ahead and to establish objectives.
(2) Directing involves coordinating the diverse activities and human resources of a company to
produce a smooth-running operation.
(3) Controlling is the process of keeping the company’s activities on track.
LO1 BT: C Difficulty: Easy TOT: 3 min. AACSB: Knowledge AICPA AC: Measurement, Analysis and Interpretation IMA: Reporting &
Control: Cost Accounting
5. Not true. Decision-making is not a separate management function. Rather, decision-making
involves the exercise of good judgment in performing the three management functions explained
in the answer to question four above.
LO1 BT: C Difficulty: Easy TOT: 2 min. AACSB: Knowledge AICPA AC: Measurement, Analysis and Interpretation IMA: Reporting &
Control: Cost Accounting
1-2 Copyright © 2024 John Wiley & Sons, Inc. Weygandt, Managerial Accounting 10/e, Solutions Manual (For Instructor Use Only)
,Questions Chapter 1 (Continued)
6. Employees with line positions are directly involved in the company’s primary revenue generating
operating activities. Examples would include factory managers and supervisors, and the vice
president of operations. In contrast, employees with staff positions are not directly involved in
revenue-generating operating activities, but rather serve in a support capacity to line employees.
Examples include employees in finance, legal, and human resources.
LO1 BT: C Difficulty: Easy TOT: 3 min. AACSB: Knowledge AICPA AC: Measurement, Analysis and Interpretation IMA: Reporting &
Control: Cost Accounting
7. The difference in balance sheets pertains to the presentation of inventories in the current asset
section. In a merchandising company, only inventory is shown. In a manufacturing company,
three inventory accounts are shown: finished goods, work in process, and raw materials.
LO3 BT: C Difficulty: Easy TOT: 2 min. AACSB: Knowledge AICPA AC: Measurement, Analysis and Interpretation IMA: Reporting &
Control: Cost Accounting
8. Manufacturing costs are classified as either direct materials, direct labor, or manufacturing
overhead.
LO2 BT: C Difficulty: Easy TOT: 1 min. AACSB: Knowledge AICPA AC: Measurement, Analysis and Interpretation IMA: Reporting &
Control: Cost Accounting
9. No, Mel is not correct. The distinction between direct and indirect materials is based on two criteria:
(1) physical association and (2) the convenience of making the physical association. Materials
which cannot be easily associated with the finished product are considered indirect materials.
LO2 BT: C Difficulty: Easy TOT: 2 min. AACSB: Knowledge AICPA AC: Measurement, Analysis and Interpretation IMA: Reporting &
Control: Cost Accounting
10. Product costs, or inventoriable costs, are costs that are a necessary and integral part of
producing the finished product, they are classified as manufacturing costs. Period costs are costs
that are identified with a specific time period rather than with a salable product. These costs
relate to nonmanufacturing activities and therefore are not inventoriable costs, they are
expensed as incurred.
LO2 BT: K Difficulty: Easy TOT: 2 min. AACSB: Knowledge AICPA AC: Measurement, Analysis and Interpretation IMA: Reporting &
Control: Cost Accounting
11. A merchandising company that uses the periodic inventory system reports beginning inventory,
cost of goods purchased, and ending inventory in the cost of goods section of the income
statement. A manufacturing company reports beginning finished goods inventory, cost of goods
manufactured, and ending finished goods inventory in its determination of cost of goods sold.
LO3 BT: C Difficulty: Easy TOT: 5 min. AACSB: Knowledge AICPA AC: Measurement, Analysis and Interpretation IMA: Reporting &
Control: Cost Accounting
12. (a) X = total cost of work in process.
(b) X = cost of goods manufactured.
LO3 BT: C Difficulty: Easy TOT: 2 min. AACSB: Knowledge AICPA AC: Measurement, Analysis and Interpretation IMA: Reporting &
Control: Cost Accounting
Copyright © 2024 John Wiley & Sons, Inc. Weygandt, Managerial Accounting 10/e, Solutions Manual (For Instructor Use Only) 1-3
,Questions Chapter 1 (Continued)
13. Raw materials inventory, beginning…………………………………………………… $12,000
Raw materials purchases ........................................................................................ 170,000
Less: Total raw materials available for use ............................................................. 182,000
Raw materials inventory, ending ............................................................................. 15,000
Direct materials used...................................................................................... $167,000
LO3 BT: AP Difficulty: Easy TOT: 3 min. AACSB: Analytic AICPA AC: Measurement, Analysis and Interpretation IMA:
Reporting & Control: Cost Accounting
($12,000 + $170,000 - $15,000 = $167,000)
(Beg. RM + RM purch. – End. RM = DM used)
14. Direct materials used............................................................................................... $240,000
Direct labor ............................................................................................................. 220,000
Total manufacturing overhead................................................................................. 180,000
Total manufacturing costs .............................................................................. $640,000
LO3 BT: AP Difficulty: Easy TOT: 2 min. AACSB: Analytic AICPA AC: Measurement, Analysis and Interpretation IMA:
Reporting & Control: Cost Accounting
($240,000 + $220,000 + $180,000 = $640,000)
(DM used + DL used + Tot. MOH = Tot. mfg. costs)
15. (a) Total cost of work in process ($26,000 + $640,000) ...................................... $666,000
(b) Cost of goods manufactured ($666,000 – $32,000)....................................... $634,000
LO3 BT: AP Difficulty: Easy TOT: 2 min. AACSB: Analytic AICPA AC: Measurement, Analysis and Interpretation IMA:
Reporting & Control: Cost Accounting
[(a: $26,000 + $640,000 = $666,000); (b: $666,0000 - $32,000 = $634,000)]
[(a: Beg. WIP + Tot. mfg. costs = Tot. cost of WIP); (b: Tot. cost of WIP – End. WIP = COGM)]
16. The order of reporting is finished goods inventory, work in process inventory, and raw materials
inventory.
LO3 BT: K Difficulty: Easy TOT: 1 min. AACSB: Knowledge AICPA AC: Measurement, Analysis and Interpretation IMA: Reporting &
Control: Cost Accounting
17. The products differ in how each are consumed by the customer. Services are consumed as they
are provided; and not capitalized into inventory. Meals at a restaurant are the best example
where they are consumed immediately by the customer. There could be a long lead time before
the product is sold to a customer in a manufacturing environment.
LO4 BT: C Difficulty: Easy TOT: 3 min. AACSB: Knowledge AICPA AC: Measurement, Analysis and Interpretation IMA: Reporting &
Control: Cost Accounting
18. The product costing techniques apply equally well to manufacturers and service companies. Each
needs to keep track of the cost of production or services in order to know whether it is generating
a profit. The techniques shown in this chapter, to accumulate manufacturing costs to determine
manufacturing inventory, are equally useful for determining the cost of services.
LO4 BT: K Difficulty: Easy TOT: 3 min. AACSB: Knowledge AICPA AC: Measurement, Analysis and Interpretation IMA: Reporting &
Control: Cost Accounting
19. The value chain refers to all activities associated with providing a product or service. For a
manufacturer, these include research and development, product design, acquisition of raw
materials, production, sales and marketing, delivery, customer relations, and subsequent service.
The value chain includes both manufacturing and nonmanufacturing activities and costs.
LO4 BT: C Difficulty: Easy TOT: 3 min. AACSB: Knowledge AICPA AC: Systems & Process Management IMA: Reporting & Control: Cost
Accounting
1-4 Copyright © 2024 John Wiley & Sons, Inc. Weygandt, Managerial Accounting 10/e, Solutions Manual (For Instructor Use Only)
,Questions Chapter 1 (Continued)
20. An enterprise resource planning (ERP) system is an integrated software system that provides a
comprehensive, centralized resource for information. Its primary benefits are that it replaces the
many individual systems typically used for receivables, payables, inventory, human resources,
etc. Also, it can be used to get information from, and provide information to, the company’s
customers and suppliers.
LO4 BT: C Difficulty: Easy TOT: 3 min. AACSB: Knowledge AICPA AC: System and Process Management IMA: Strategy Planning &
Performance: Strategic and Tactical Planning
21. In a just-in-time inventory system, the company has no extra inventory stored. Consequently, if
some units that are produced are defective, the company will not have enough units to deliver to
customers.
LO4 BT: C Difficulty: Easy TOT: 2 min. AACSB: Knowledge AICPA AC: System and Process Management IMA: Strategy Planning &
Performance: Strategic and Tactical Planning
22. The balanced scorecard is called “balanced” because it strives to not over emphasize any one
performance measure, but rather uses both financial and non-financial measures to evaluate all
aspects of a company’s operations in an integrated fashion.
LO4 BT: C Difficulty: Easy TOT: 3 min. AACSB: Knowledge AICPA AC: System and Process Management IMA: Strategy Planning &
Performance: Strategic and Tactical Planning
23. Budgets are prepared by companies to provide future direction. Because the budget is also used
as an evaluation tool, some managers may try to game the budgeting process by
underestimating their division’s predicted performance so that it will be easier to meet their
performance targets. On the other hand, if the budget is set at unattainable levels, managers
sometimes take unethical actions to meet targets to receive higher compensation or in some
cases to keep their jobs.
LO4 BT: C Difficulty: Easy TOT: 3 min. AACSB: Ethics AICPA PC: Ethical Conduct IMA: Professional Ethics & Values: Recognizing and
Resolving Unethical Behavior
24. According to the Sarbanes-Oxley Act of 2002, CEOs and CFOs must now certify that financial
statements give a fair presentation of the company’s operating results and its financial condition
and that the company maintains an adequate system of internal controls. In addition, the
composition of the board of directors and audit committees receives more scrutiny, and penalties
for misconduct have increased.
LO4 BT: C Difficulty: Easy TOT: 3 min. AACSB: Ethics AICPA AC: Measurement, Analysis and Interpretation AICPA PC: Ethical Conduct
IMA: Reporting & Control: Internal Controls
25. Activity-based costing is an approach used to allocate overhead based on each product’s relative
use of activities in making the product. Activity-based costing is beneficial because it results in
more accurate product costing and in more careful scrutiny of all activities in the value chain.
LO4 BT: C Difficulty: Easy TOT: 3 min. AACSB: Knowledge AICPA AC: Measurement, Analysis and Interpretation IMA: Reporting &
Control: Cost Accounting
Copyright © 2024 John Wiley & Sons, Inc. Weygandt, Managerial Accounting 10/e, Solutions Manual (For Instructor Use Only) 1-5
, SOLUTIONS TO BRIEF EXERCISES
BRIEF EXERCISE 1.1
Financial Accounting Managerial Accounting
Primary users External users Internal users
Types of Financial statements Internal reports
reports Quarterly and annually As frequently as needed
Frequency of Quarterly and annually As frequently as needed
reports
Purpose of General-purpose Special-purpose information
reports for specific decisions
Content of Pertains to business as a Pertains to subunits of the
reports whole. business.
Highly aggregated. Very detailed.
Limited to accrual Extends beyond accrual
accounting and cost data. accounting to any
Generally accepted relevant data.
accounting principles Evaluated based on relevance
to decisions
Verification Annual audit by certified No independent audits
process public accountant
LO1 BT: C Difficulty: Easy TOT: 3 min. AACSB: Knowledge AICPA AC: Measurement, Analysis and
Interpretation IMA: Reporting & Control: Cost Accounting
BRIEF EXERCISE 1.2
(a) 1. Planning.
(b) 2. Directing.
(c) 3. Controlling.
LO1 BT: C Difficulty: Easy TOT: 1 min. AACSB: Knowledge AICPA AC: Measurement, Analysis and
Interpretation IMA: Reporting & Control: Cost Accounting
1-6 Copyright © 2024 John Wiley & Sons, Inc. Weygandt, Managerial Accounting 10/e, Solutions Manual (For Instructor Use Only)
,BRIEF EXERCISE 1.3
(a) DM Frames and tires used in manufacturing bicycles.
(b) DL Wages paid to production workers.
(c) MO Insurance on factory equipment and machinery.
(d) MO Depreciation on factory equipment.
LO2 BT: C Difficulty: Easy TOT: 2 min. AACSB: Knowledge AICPA AC: Measurement, Analysis and
Interpretation IMA: Reporting & Control: Cost Accounting
BRIEF EXERCISE 1.4
(a) Direct materials.
(b) Direct materials.
(c) Direct labor.
(d) Manufacturing overhead.
(e) Manufacturing overhead.
(f) Direct materials.
(g) Direct materials.
(h) Manufacturing overhead.
LO2 BT: C Difficulty: Easy TOT: 3 min. AACSB: Knowledge AICPA AC: Measurement, Analysis and
Interpretation IMA: Reporting & Control: Cost Accounting
BRIEF EXERCISE 1.5
(a) Product.
(b) Period.
(c) Period.
(d) Period.
(e) Product.
(f) Product.
LO2 BT: C Difficulty: Easy TOT: 3 min. AACSB: Knowledge AICPA AC: Measurement, Analysis and
Interpretation IMA: Reporting & Control: Cost Accounting
BRIEF EXERCISE 1.6
Product Costs
Direct Direct Manufacturing
Materials Labor Overhead
(a) X
(b) X
(c) X
(d) X
LO2 BT: C Difficulty: Easy TOT: 2 min. AACSB: Knowledge AICPA AC: Measurement, Analysis and
Interpretation IMA: Reporting & Control: Cost Accounting
Copyright © 2024 John Wiley & Sons, Inc. Weygandt, Managerial Accounting 10/e, Solutions Manual (For Instructor Use Only) 1-7
, BRIEF EXERCISE 1.7
(a) Direct materials used............................................................. $180,000
Direct labor............................................................................. 209,000
Total manufacturing overhead.............................................. 208,000
Total manufacturing costs ............................................ $597,000
(b) Beginning work in process................................................... $ 25,000
Total manufacturing costs.................................................... 597,000
Total cost of work in process........................................ $622,000
($25,000 + $597,000 = $622,000)
(Beg. WIP + Tot. mfg. costs = Tot. cost in WIP)
LO3 BT: AP Difficulty: Easy TOT: 5 min. AACSB: Analytic AICPA AC: Measurement, Analysis and
Interpretation IMA: Reporting & Control: Cost Accounting
BRIEF EXERCISE 1.8
ROLAND COMPANY
Balance Sheet (Partial)
December 31, 2027
ASSETS
Current assets
Cash..................................................................... $ 62,000
Accounts receivable........................................... 200,000
Inventories
Finished goods........................................... $91,000
Work in process.......................................... 87,000
Raw materials.............................................. 83,000 261,000
Prepaid expenses............................................... 38,000
Total current assets............................ $561,000
LO3 BT: AP Difficulty: Easy TOT: 5 min. AACSB: Analytic AICPA AC: Reporting IMA:
Reporting & Control: Cost Accounting [$62,000 + $200,000 + ($91,000 + $87,000 + $83,000) + $38,000 =
$561,000]
[Cash + Accts. rec. + (Fin. gds. + WIP + Raw mat.) + Prepd. exp. = Tot. current assets]
1-8 Copyright © 2024 John Wiley & Sons, Inc. Weygandt, Managerial Accounting 10/e, Solutions Manual (For Instructor Use Only)
10e Weygandt
Notes
1- The file is chapter after chapter.
2- We have shown you few pages sample.
3- The file contains all Appendix and Excel sheet
if it exists.
4- We have all what you need, we make update
at every time. There are many new editions
waiting you.
5- If you think you purchased the wrong file You
can contact us at every time, we can replace it
with true one.
Our email:
, CHAPTER 1
Managerial Accounting
Learning Objectives
1. Identify the features of managerial accounting and the functions of management.
2. Describe the classes of manufacturing costs and the differences between product and period
costs.
3. Demonstrate how to compute cost of goods manufactured and prepare financial statements for a
manufacturer.
4. Discuss trends in managerial accounting.
Copyright © 2024 John Wiley & Sons, Inc. Weygandt, Managerial Accounting 10/e, Solutions Manual (For Instructor Use Only) 1-1
, ANSWERS TO QUESTIONS
1. (a) Not true. Managerial accounting is a field of accounting that provides economic and financial
information for managers and other internal users.
(b) Joe is incorrect. Managerial accounting applies to all types of businesses—service,
merchandising, and manufacturing.
LO1 BT: C Difficulty: Easy TOT: 3 min. AACSB: Knowledge AICPA AC: Measurement, Analysis and Interpretation IMA: Reporting &
Control: Cost Accounting
2. (a) Financial accounting is concerned primarily with external users such as stockholders,
creditors, and regulators. In contrast, managerial accounting is concerned primarily with
internal users such as officers and managers.
(b) Financial statements are the end product of financial accounting. These statements are
prepared quarterly and annually. In managerial accounting, internal reports may be
prepared as frequently as needed.
(c) The purpose of financial accounting is to provide general-purpose information for external
users. The purpose of managerial accounting is to provide special-purpose information for
specific internal decisions.
LO1 BT: C Difficulty: Easy TOT: 5 min. AACSB: Knowledge AICPA AC: Measurement, Analysis and Interpretation IMA: Reporting &
Control: Cost Accounting
3. Differences in the content of the reports are as follows:
Financial Managerial
Pertains to business as a whole and is Pertains to subunits of the business and
highly aggregated. may be very detailed.
Limited to accrual accounting and cost data. Extends beyond accrual accounting
Generally accepted accounting principles. system to any relevant data.
Standard is relevance to decisions.
In financial accounting, financial statements are verified annually through an independent audit
by certified public accountants. There are no independent audits of internal reports prepared by
managerial accountants.
LO1 BT: C Difficulty: Easy TOT: 5 min. AACSB: None AICPA AC: Measurement, Analysis and Interpretation IMA: Reporting & Control:
Cost Accounting
4. Linda should know that the management of an organization performs three broad functions:
(1) Planning requires management to look ahead and to establish objectives.
(2) Directing involves coordinating the diverse activities and human resources of a company to
produce a smooth-running operation.
(3) Controlling is the process of keeping the company’s activities on track.
LO1 BT: C Difficulty: Easy TOT: 3 min. AACSB: Knowledge AICPA AC: Measurement, Analysis and Interpretation IMA: Reporting &
Control: Cost Accounting
5. Not true. Decision-making is not a separate management function. Rather, decision-making
involves the exercise of good judgment in performing the three management functions explained
in the answer to question four above.
LO1 BT: C Difficulty: Easy TOT: 2 min. AACSB: Knowledge AICPA AC: Measurement, Analysis and Interpretation IMA: Reporting &
Control: Cost Accounting
1-2 Copyright © 2024 John Wiley & Sons, Inc. Weygandt, Managerial Accounting 10/e, Solutions Manual (For Instructor Use Only)
,Questions Chapter 1 (Continued)
6. Employees with line positions are directly involved in the company’s primary revenue generating
operating activities. Examples would include factory managers and supervisors, and the vice
president of operations. In contrast, employees with staff positions are not directly involved in
revenue-generating operating activities, but rather serve in a support capacity to line employees.
Examples include employees in finance, legal, and human resources.
LO1 BT: C Difficulty: Easy TOT: 3 min. AACSB: Knowledge AICPA AC: Measurement, Analysis and Interpretation IMA: Reporting &
Control: Cost Accounting
7. The difference in balance sheets pertains to the presentation of inventories in the current asset
section. In a merchandising company, only inventory is shown. In a manufacturing company,
three inventory accounts are shown: finished goods, work in process, and raw materials.
LO3 BT: C Difficulty: Easy TOT: 2 min. AACSB: Knowledge AICPA AC: Measurement, Analysis and Interpretation IMA: Reporting &
Control: Cost Accounting
8. Manufacturing costs are classified as either direct materials, direct labor, or manufacturing
overhead.
LO2 BT: C Difficulty: Easy TOT: 1 min. AACSB: Knowledge AICPA AC: Measurement, Analysis and Interpretation IMA: Reporting &
Control: Cost Accounting
9. No, Mel is not correct. The distinction between direct and indirect materials is based on two criteria:
(1) physical association and (2) the convenience of making the physical association. Materials
which cannot be easily associated with the finished product are considered indirect materials.
LO2 BT: C Difficulty: Easy TOT: 2 min. AACSB: Knowledge AICPA AC: Measurement, Analysis and Interpretation IMA: Reporting &
Control: Cost Accounting
10. Product costs, or inventoriable costs, are costs that are a necessary and integral part of
producing the finished product, they are classified as manufacturing costs. Period costs are costs
that are identified with a specific time period rather than with a salable product. These costs
relate to nonmanufacturing activities and therefore are not inventoriable costs, they are
expensed as incurred.
LO2 BT: K Difficulty: Easy TOT: 2 min. AACSB: Knowledge AICPA AC: Measurement, Analysis and Interpretation IMA: Reporting &
Control: Cost Accounting
11. A merchandising company that uses the periodic inventory system reports beginning inventory,
cost of goods purchased, and ending inventory in the cost of goods section of the income
statement. A manufacturing company reports beginning finished goods inventory, cost of goods
manufactured, and ending finished goods inventory in its determination of cost of goods sold.
LO3 BT: C Difficulty: Easy TOT: 5 min. AACSB: Knowledge AICPA AC: Measurement, Analysis and Interpretation IMA: Reporting &
Control: Cost Accounting
12. (a) X = total cost of work in process.
(b) X = cost of goods manufactured.
LO3 BT: C Difficulty: Easy TOT: 2 min. AACSB: Knowledge AICPA AC: Measurement, Analysis and Interpretation IMA: Reporting &
Control: Cost Accounting
Copyright © 2024 John Wiley & Sons, Inc. Weygandt, Managerial Accounting 10/e, Solutions Manual (For Instructor Use Only) 1-3
,Questions Chapter 1 (Continued)
13. Raw materials inventory, beginning…………………………………………………… $12,000
Raw materials purchases ........................................................................................ 170,000
Less: Total raw materials available for use ............................................................. 182,000
Raw materials inventory, ending ............................................................................. 15,000
Direct materials used...................................................................................... $167,000
LO3 BT: AP Difficulty: Easy TOT: 3 min. AACSB: Analytic AICPA AC: Measurement, Analysis and Interpretation IMA:
Reporting & Control: Cost Accounting
($12,000 + $170,000 - $15,000 = $167,000)
(Beg. RM + RM purch. – End. RM = DM used)
14. Direct materials used............................................................................................... $240,000
Direct labor ............................................................................................................. 220,000
Total manufacturing overhead................................................................................. 180,000
Total manufacturing costs .............................................................................. $640,000
LO3 BT: AP Difficulty: Easy TOT: 2 min. AACSB: Analytic AICPA AC: Measurement, Analysis and Interpretation IMA:
Reporting & Control: Cost Accounting
($240,000 + $220,000 + $180,000 = $640,000)
(DM used + DL used + Tot. MOH = Tot. mfg. costs)
15. (a) Total cost of work in process ($26,000 + $640,000) ...................................... $666,000
(b) Cost of goods manufactured ($666,000 – $32,000)....................................... $634,000
LO3 BT: AP Difficulty: Easy TOT: 2 min. AACSB: Analytic AICPA AC: Measurement, Analysis and Interpretation IMA:
Reporting & Control: Cost Accounting
[(a: $26,000 + $640,000 = $666,000); (b: $666,0000 - $32,000 = $634,000)]
[(a: Beg. WIP + Tot. mfg. costs = Tot. cost of WIP); (b: Tot. cost of WIP – End. WIP = COGM)]
16. The order of reporting is finished goods inventory, work in process inventory, and raw materials
inventory.
LO3 BT: K Difficulty: Easy TOT: 1 min. AACSB: Knowledge AICPA AC: Measurement, Analysis and Interpretation IMA: Reporting &
Control: Cost Accounting
17. The products differ in how each are consumed by the customer. Services are consumed as they
are provided; and not capitalized into inventory. Meals at a restaurant are the best example
where they are consumed immediately by the customer. There could be a long lead time before
the product is sold to a customer in a manufacturing environment.
LO4 BT: C Difficulty: Easy TOT: 3 min. AACSB: Knowledge AICPA AC: Measurement, Analysis and Interpretation IMA: Reporting &
Control: Cost Accounting
18. The product costing techniques apply equally well to manufacturers and service companies. Each
needs to keep track of the cost of production or services in order to know whether it is generating
a profit. The techniques shown in this chapter, to accumulate manufacturing costs to determine
manufacturing inventory, are equally useful for determining the cost of services.
LO4 BT: K Difficulty: Easy TOT: 3 min. AACSB: Knowledge AICPA AC: Measurement, Analysis and Interpretation IMA: Reporting &
Control: Cost Accounting
19. The value chain refers to all activities associated with providing a product or service. For a
manufacturer, these include research and development, product design, acquisition of raw
materials, production, sales and marketing, delivery, customer relations, and subsequent service.
The value chain includes both manufacturing and nonmanufacturing activities and costs.
LO4 BT: C Difficulty: Easy TOT: 3 min. AACSB: Knowledge AICPA AC: Systems & Process Management IMA: Reporting & Control: Cost
Accounting
1-4 Copyright © 2024 John Wiley & Sons, Inc. Weygandt, Managerial Accounting 10/e, Solutions Manual (For Instructor Use Only)
,Questions Chapter 1 (Continued)
20. An enterprise resource planning (ERP) system is an integrated software system that provides a
comprehensive, centralized resource for information. Its primary benefits are that it replaces the
many individual systems typically used for receivables, payables, inventory, human resources,
etc. Also, it can be used to get information from, and provide information to, the company’s
customers and suppliers.
LO4 BT: C Difficulty: Easy TOT: 3 min. AACSB: Knowledge AICPA AC: System and Process Management IMA: Strategy Planning &
Performance: Strategic and Tactical Planning
21. In a just-in-time inventory system, the company has no extra inventory stored. Consequently, if
some units that are produced are defective, the company will not have enough units to deliver to
customers.
LO4 BT: C Difficulty: Easy TOT: 2 min. AACSB: Knowledge AICPA AC: System and Process Management IMA: Strategy Planning &
Performance: Strategic and Tactical Planning
22. The balanced scorecard is called “balanced” because it strives to not over emphasize any one
performance measure, but rather uses both financial and non-financial measures to evaluate all
aspects of a company’s operations in an integrated fashion.
LO4 BT: C Difficulty: Easy TOT: 3 min. AACSB: Knowledge AICPA AC: System and Process Management IMA: Strategy Planning &
Performance: Strategic and Tactical Planning
23. Budgets are prepared by companies to provide future direction. Because the budget is also used
as an evaluation tool, some managers may try to game the budgeting process by
underestimating their division’s predicted performance so that it will be easier to meet their
performance targets. On the other hand, if the budget is set at unattainable levels, managers
sometimes take unethical actions to meet targets to receive higher compensation or in some
cases to keep their jobs.
LO4 BT: C Difficulty: Easy TOT: 3 min. AACSB: Ethics AICPA PC: Ethical Conduct IMA: Professional Ethics & Values: Recognizing and
Resolving Unethical Behavior
24. According to the Sarbanes-Oxley Act of 2002, CEOs and CFOs must now certify that financial
statements give a fair presentation of the company’s operating results and its financial condition
and that the company maintains an adequate system of internal controls. In addition, the
composition of the board of directors and audit committees receives more scrutiny, and penalties
for misconduct have increased.
LO4 BT: C Difficulty: Easy TOT: 3 min. AACSB: Ethics AICPA AC: Measurement, Analysis and Interpretation AICPA PC: Ethical Conduct
IMA: Reporting & Control: Internal Controls
25. Activity-based costing is an approach used to allocate overhead based on each product’s relative
use of activities in making the product. Activity-based costing is beneficial because it results in
more accurate product costing and in more careful scrutiny of all activities in the value chain.
LO4 BT: C Difficulty: Easy TOT: 3 min. AACSB: Knowledge AICPA AC: Measurement, Analysis and Interpretation IMA: Reporting &
Control: Cost Accounting
Copyright © 2024 John Wiley & Sons, Inc. Weygandt, Managerial Accounting 10/e, Solutions Manual (For Instructor Use Only) 1-5
, SOLUTIONS TO BRIEF EXERCISES
BRIEF EXERCISE 1.1
Financial Accounting Managerial Accounting
Primary users External users Internal users
Types of Financial statements Internal reports
reports Quarterly and annually As frequently as needed
Frequency of Quarterly and annually As frequently as needed
reports
Purpose of General-purpose Special-purpose information
reports for specific decisions
Content of Pertains to business as a Pertains to subunits of the
reports whole. business.
Highly aggregated. Very detailed.
Limited to accrual Extends beyond accrual
accounting and cost data. accounting to any
Generally accepted relevant data.
accounting principles Evaluated based on relevance
to decisions
Verification Annual audit by certified No independent audits
process public accountant
LO1 BT: C Difficulty: Easy TOT: 3 min. AACSB: Knowledge AICPA AC: Measurement, Analysis and
Interpretation IMA: Reporting & Control: Cost Accounting
BRIEF EXERCISE 1.2
(a) 1. Planning.
(b) 2. Directing.
(c) 3. Controlling.
LO1 BT: C Difficulty: Easy TOT: 1 min. AACSB: Knowledge AICPA AC: Measurement, Analysis and
Interpretation IMA: Reporting & Control: Cost Accounting
1-6 Copyright © 2024 John Wiley & Sons, Inc. Weygandt, Managerial Accounting 10/e, Solutions Manual (For Instructor Use Only)
,BRIEF EXERCISE 1.3
(a) DM Frames and tires used in manufacturing bicycles.
(b) DL Wages paid to production workers.
(c) MO Insurance on factory equipment and machinery.
(d) MO Depreciation on factory equipment.
LO2 BT: C Difficulty: Easy TOT: 2 min. AACSB: Knowledge AICPA AC: Measurement, Analysis and
Interpretation IMA: Reporting & Control: Cost Accounting
BRIEF EXERCISE 1.4
(a) Direct materials.
(b) Direct materials.
(c) Direct labor.
(d) Manufacturing overhead.
(e) Manufacturing overhead.
(f) Direct materials.
(g) Direct materials.
(h) Manufacturing overhead.
LO2 BT: C Difficulty: Easy TOT: 3 min. AACSB: Knowledge AICPA AC: Measurement, Analysis and
Interpretation IMA: Reporting & Control: Cost Accounting
BRIEF EXERCISE 1.5
(a) Product.
(b) Period.
(c) Period.
(d) Period.
(e) Product.
(f) Product.
LO2 BT: C Difficulty: Easy TOT: 3 min. AACSB: Knowledge AICPA AC: Measurement, Analysis and
Interpretation IMA: Reporting & Control: Cost Accounting
BRIEF EXERCISE 1.6
Product Costs
Direct Direct Manufacturing
Materials Labor Overhead
(a) X
(b) X
(c) X
(d) X
LO2 BT: C Difficulty: Easy TOT: 2 min. AACSB: Knowledge AICPA AC: Measurement, Analysis and
Interpretation IMA: Reporting & Control: Cost Accounting
Copyright © 2024 John Wiley & Sons, Inc. Weygandt, Managerial Accounting 10/e, Solutions Manual (For Instructor Use Only) 1-7
, BRIEF EXERCISE 1.7
(a) Direct materials used............................................................. $180,000
Direct labor............................................................................. 209,000
Total manufacturing overhead.............................................. 208,000
Total manufacturing costs ............................................ $597,000
(b) Beginning work in process................................................... $ 25,000
Total manufacturing costs.................................................... 597,000
Total cost of work in process........................................ $622,000
($25,000 + $597,000 = $622,000)
(Beg. WIP + Tot. mfg. costs = Tot. cost in WIP)
LO3 BT: AP Difficulty: Easy TOT: 5 min. AACSB: Analytic AICPA AC: Measurement, Analysis and
Interpretation IMA: Reporting & Control: Cost Accounting
BRIEF EXERCISE 1.8
ROLAND COMPANY
Balance Sheet (Partial)
December 31, 2027
ASSETS
Current assets
Cash..................................................................... $ 62,000
Accounts receivable........................................... 200,000
Inventories
Finished goods........................................... $91,000
Work in process.......................................... 87,000
Raw materials.............................................. 83,000 261,000
Prepaid expenses............................................... 38,000
Total current assets............................ $561,000
LO3 BT: AP Difficulty: Easy TOT: 5 min. AACSB: Analytic AICPA AC: Reporting IMA:
Reporting & Control: Cost Accounting [$62,000 + $200,000 + ($91,000 + $87,000 + $83,000) + $38,000 =
$561,000]
[Cash + Accts. rec. + (Fin. gds. + WIP + Raw mat.) + Prepd. exp. = Tot. current assets]
1-8 Copyright © 2024 John Wiley & Sons, Inc. Weygandt, Managerial Accounting 10/e, Solutions Manual (For Instructor Use Only)
