Wild and Shaw, Managerial Accounting 8e Solutions Manual: Chapter 1
Chapter 1
Managerial Accounting Concepts
and Principles
QUICK STUDIES
Quick Study 1-1 (5 minutes)
1. Its primary users are company managers ............................... Managerial
2. Its information is often available only after an audit is complete .. Financial
3. Its primary focus is on the organization as a whole ............... Financial
4. Its principles and practices are relatively flexible .................. Managerial
5. It focuses mainly on past results .............................................. Financial
Quick Study 1-2 (10 minutes)
1. Indirect cost
2. Direct cost
3. Indirect cost
4. Indirect cost
5. Direct cost
Quick Study 1-3 (10 minutes)
1. Direct materials
2. Factory overhead
3. Direct labor
4. Factory overhead
5. Factory overhead
6. Direct materials
1
Copyright © 2022 by McGraw Hill.
All rights reserved. No reproduction or distribution without the prior written consent of McGraw Hill.
, Wild and Shaw, Managerial Accounting 8e Solutions Manual: Chapter 1
Quick Study 1-4 (10 minutes)
1. Product cost
2. Period cost
3. Product cost
4. Period cost
5. Product cost
6. Period cost
7. Period cost
8. Product cost
Quick Study 1-5 (10 minutes)
1. Prime cost
2. Conversion cost (Glue is an indirect material)
3. Both
4. Conversion cost
5. Conversion cost
6. Prime cost
Quick Study 1-6 (10 minutes)
Ending work in process inventory is computed as:
Work in process inventory, beginning ..............................................
$ 26,000
Direct materials used ......................................................................
74,000
Direct labor used .............................................................................
55,000
Factory overhead ............................................................................
95,000
Total manufacturing costs .............................................................
224,000
Total cost of work in process .............................................................
250,000
Less cost of goods manufactured .....................................................
220,000
Work in process inventory, ending ....................................................
$ 30,000
2
Copyright © 2022 by McGraw Hill.
All rights reserved. No reproduction or distribution without the prior written consent of McGraw Hill.
, Wild and Shaw, Managerial Accounting 8e Solutions Manual: Chapter 1
Quick Study 1-6 (continued)
Alternative calculation using T-account:
Work in Process Inventory
Beginning 26,000
Direct materials 74,000
Direct labor 55,000
Factory overhead 95,000
220,000 COGM
Ending 30,000
Quick Study 1-7 (10 minutes)
Cost of goods sold is computed as:
Finished goods inventory, beginning ................................................
$ 500
Cost of goods manufactured ..............................................................
4,000
Goods available for sale .....................................................................
4,500
Less finished goods inventory, ending .............................................
700
Cost of goods sold ..............................................................................
$3,800
Quick Study 1-8 (10 minutes)
Finished goods inventory, beginning .........................................
$ 345,000
Cost of goods manufactured .......................................................
918,000
Goods available for sale ..............................................................
1,263,000
Less finished goods inventory, ending ......................................
283,000
$ 980,000
Cost of goods sold .......................................................................
Alternative calculation using T-account:
Finished Goods Inventory
Beginning 345,000
COGM 918,000
980,000 COGS
Ending 283,000
3
Copyright © 2022 by McGraw Hill.
All rights reserved. No reproduction or distribution without the prior written consent of McGraw Hill.
, Wild and Shaw, Managerial Accounting 8e Solutions Manual: Chapter 1
Quick Study 1-9 (5 minutes)
Cost of goods sold is computed as:
Merchandise inventory, beginning ....................................................
$12,000
Cost of merchandise purchased ........................................................
85,000
Goods available for sale .....................................................................
97,000
Less merchandise inventory, ending ................................................
18,000
Cost of goods sold ..............................................................................
$79,000
Quick Study 1-10 (10 minutes)
(1) (2) (3)
Cost of merchandise purchased......... $181,000 $140,000 $289,000
Merchandise inventory, beginning ..... 106,000 21,000 28,000
Merchandise inventory, ending .......... 82,000 33,000 50,000
Cost of goods sold ............................... 205,000 128,000 267,000
Calculations:
(1) $106,000 + Purchases - $205,000 = $82,000 Purchases = $181,000
(2) Beg. Inv. + $140,000 - $128,000 = $33,000 Beg. Inv. = $21,000
(3) $28,000 + $289,000 - $267,000 = End. Inv. End. Inv. = $50,000
4
Copyright © 2022 by McGraw Hill.
All rights reserved. No reproduction or distribution without the prior written consent of McGraw Hill.
Chapter 1
Managerial Accounting Concepts
and Principles
QUICK STUDIES
Quick Study 1-1 (5 minutes)
1. Its primary users are company managers ............................... Managerial
2. Its information is often available only after an audit is complete .. Financial
3. Its primary focus is on the organization as a whole ............... Financial
4. Its principles and practices are relatively flexible .................. Managerial
5. It focuses mainly on past results .............................................. Financial
Quick Study 1-2 (10 minutes)
1. Indirect cost
2. Direct cost
3. Indirect cost
4. Indirect cost
5. Direct cost
Quick Study 1-3 (10 minutes)
1. Direct materials
2. Factory overhead
3. Direct labor
4. Factory overhead
5. Factory overhead
6. Direct materials
1
Copyright © 2022 by McGraw Hill.
All rights reserved. No reproduction or distribution without the prior written consent of McGraw Hill.
, Wild and Shaw, Managerial Accounting 8e Solutions Manual: Chapter 1
Quick Study 1-4 (10 minutes)
1. Product cost
2. Period cost
3. Product cost
4. Period cost
5. Product cost
6. Period cost
7. Period cost
8. Product cost
Quick Study 1-5 (10 minutes)
1. Prime cost
2. Conversion cost (Glue is an indirect material)
3. Both
4. Conversion cost
5. Conversion cost
6. Prime cost
Quick Study 1-6 (10 minutes)
Ending work in process inventory is computed as:
Work in process inventory, beginning ..............................................
$ 26,000
Direct materials used ......................................................................
74,000
Direct labor used .............................................................................
55,000
Factory overhead ............................................................................
95,000
Total manufacturing costs .............................................................
224,000
Total cost of work in process .............................................................
250,000
Less cost of goods manufactured .....................................................
220,000
Work in process inventory, ending ....................................................
$ 30,000
2
Copyright © 2022 by McGraw Hill.
All rights reserved. No reproduction or distribution without the prior written consent of McGraw Hill.
, Wild and Shaw, Managerial Accounting 8e Solutions Manual: Chapter 1
Quick Study 1-6 (continued)
Alternative calculation using T-account:
Work in Process Inventory
Beginning 26,000
Direct materials 74,000
Direct labor 55,000
Factory overhead 95,000
220,000 COGM
Ending 30,000
Quick Study 1-7 (10 minutes)
Cost of goods sold is computed as:
Finished goods inventory, beginning ................................................
$ 500
Cost of goods manufactured ..............................................................
4,000
Goods available for sale .....................................................................
4,500
Less finished goods inventory, ending .............................................
700
Cost of goods sold ..............................................................................
$3,800
Quick Study 1-8 (10 minutes)
Finished goods inventory, beginning .........................................
$ 345,000
Cost of goods manufactured .......................................................
918,000
Goods available for sale ..............................................................
1,263,000
Less finished goods inventory, ending ......................................
283,000
$ 980,000
Cost of goods sold .......................................................................
Alternative calculation using T-account:
Finished Goods Inventory
Beginning 345,000
COGM 918,000
980,000 COGS
Ending 283,000
3
Copyright © 2022 by McGraw Hill.
All rights reserved. No reproduction or distribution without the prior written consent of McGraw Hill.
, Wild and Shaw, Managerial Accounting 8e Solutions Manual: Chapter 1
Quick Study 1-9 (5 minutes)
Cost of goods sold is computed as:
Merchandise inventory, beginning ....................................................
$12,000
Cost of merchandise purchased ........................................................
85,000
Goods available for sale .....................................................................
97,000
Less merchandise inventory, ending ................................................
18,000
Cost of goods sold ..............................................................................
$79,000
Quick Study 1-10 (10 minutes)
(1) (2) (3)
Cost of merchandise purchased......... $181,000 $140,000 $289,000
Merchandise inventory, beginning ..... 106,000 21,000 28,000
Merchandise inventory, ending .......... 82,000 33,000 50,000
Cost of goods sold ............................... 205,000 128,000 267,000
Calculations:
(1) $106,000 + Purchases - $205,000 = $82,000 Purchases = $181,000
(2) Beg. Inv. + $140,000 - $128,000 = $33,000 Beg. Inv. = $21,000
(3) $28,000 + $289,000 - $267,000 = End. Inv. End. Inv. = $50,000
4
Copyright © 2022 by McGraw Hill.
All rights reserved. No reproduction or distribution without the prior written consent of McGraw Hill.
