Solution Manual for Managerial Accounting,
18th Edition
By Ray Garrison, Eric Noreen and Peter Brewer
Verified Chapter's 1 - 16 | Complete
,Table of Contents
9v 9v
Chapter9vOne:9vManagerial9vAccounting9vand9vCost9vConcepts9vC
hapter9vTwo:9vJob-
Order9vCosting:9vCalculating9vUnit9vProduct9vCosts
Chapter9vThree:9vJob-
Order9vCosting:9vCost9vFlows9vand9vExternal9vReporting9vChapter9vFour:9vProce
ss9vCosting
Chapter9vFive:9vCost-Volume-Profit9vRelationships
Chapter9vSix:9vVariable9vCosting9vand9vSegment9vReporting:9vTools9vfor9vManag
ement9vChapter9vSeven:9vActivity-
Based9vCosting:9vA9vTool9vto9vAid9vDecision9vMaking9vChapter9vEight:9vMaster9v
Budgeting
Chapter9vNine:9vFlexible9vBudgets9vand9vPerformance9vAnalysis9v
Chapter9vTen:9vStandard9vCosts9vand9vVariances
Chapter9vEleven:9vResponsibility9vAccounting9vSystems9vCh
apter9vTwelve:9vStrategic9vPerformance9vMeasurement
Chapter9vThirteen:9vDifferential9vAnalysis:9vThe9vKey9vto9vDecision9vMaking9v
Chapter9vFourteen:9vCapital9vBudgeting9vDecisions
Chapter9vFifteen:9vStatement9vof9vCash9vFlows9vC
hapter9vSixteen:9vFinancial9vStatement9vAnalysis
,Chapter 1 9v
Managerial Accounting and Cost Concepts
9v 9v 9v 9v
Questions
1-1 The9vthree9vmajor9vtypes9vof9vproduct9vc 1-4
osts9vin9va9vmanufacturing9vcompany9vare9vdire a. Variable9vcost:9vThe9vvariable9vcost9vper9vu
ct9vmaterials,9vdirect9vlabor,9vand9vmanufacturi nit9vis9vconstant,9vbut9vtotal9vvariable9vcost9vc
ng9voverhead. hanges9vin9vdirect9vproportion9vto9vchanges
9vin9vvolume.
1-2 b. Fixed9vcost:9vThe9vtotal9vfixed9vcost9vis9vconst
a. Direct9vmaterials9vare9van9vintegral9vpart9v ant9vwithin9vthe9vrelevant9vrange.9vThe9vavera
of9va9vfinished9vproduct9vand9vtheir9vcosts9vcan9v ge9vfixed9vcost9vper9vunit9vvaries9vinversely9v
be9vconveniently9vtraced9vto9vit. with9vchanges9vin9vvolume.
b. Indirect9vmaterials9vare9vgenerally9vsmall9v c. Mixed9vcost:9vA9vmixed9vcost9vcontains9vb
items9vof9vmaterial9vsuch9vas9vglue9vand9vnails.9vT oth9vvariable9vand9vfixed9vcost9velemen
hey9vmay9vbe9van9vintegral9vpart9vof9va9vfinished9vpr ts.
oduct9vbut9vtheir9vcosts9vcan9vbe9vtraced9vto9vthe9
vproduct9vonly9vat9vgreat9vcost9vor9vinconvenienc 1-5
e. a. Unit9vfixed9vcosts9vdecrease9vas9vthe9vactivity9vl
c. Direct9vlabor9vconsists9vof9vlabor9vcosts9vt evel9vincreases.
hat9vcan9vbe9veasily9vtraced9vto9vparticular9vpr b. Unit9vvariable9vcosts9vremain9vconstant9vas9v
oducts. the9vactivity9vlevel9vincreases.
Direct9vlabor9vis9valso9vcalled9v―touch9vlabor.‖ c. Total9vfixed9vcosts9vremain9vconstant9vas9v
d. Indirect9vlabor9vconsists9vof9vthe9vlabor9vc the9vactivity9vlevel9vincreases.
osts9vof9vjanitors,9vsupervisors,9vmaterials9vhandl d. Total9vvariable9vcosts9vincrease9vas9vthe9vacti
ers,9vand9vother9vfactory9vworkers9vthat9vcannot vity9vlevel9vincreases.
9vbe9vconveniently9vtraced 9vto9vparticular9vprodu
cts.9vThese9vlabor9vcosts9vare9vincurred9vto9vsup 1-6
port9vproduction,9vbut9vthe9vworkers9vinvolved9v a. Cost9vbehavior:9vCost9vbehavior9vrefers9vto9
do9vnot9vdirectly9vwork9von9vthe9vproduct. vthe9vway9vin9vwhich9vcosts9vchange9vin9vres
e. Manufacturing9voverhead9vincludes9vall9v ponse9vto9vchanges9vin9va9vmeasure9vof9vact
manufacturing9vcosts9vexcept9vdirect9vmaterials9v ivity9vsuch9vas9vsales9vvolume,9vproduction9v
and9vdirect9vlabor.9vConsequently,9vmanufacturi volume,9vor9vorders9vprocessed.
ng9voverhead9vincludes9vindirect9vmaterials9vand9vi b. Relevant9vrange:9vThe9vrelevant9vrange9vis9
ndirect9vlabor9vas9vwell9vas9vother9vmanufacturin vthe9vrange9vof9vactivity9vwithin9vwhich9vassu
g9vcosts. mptions9vabout9vvariable9vand9vfixed9vcost9v
behavior9vare9vvalid.
1-3
A9vproduct9vcost9vis9vany9vcost9vinvolved 1-7 An9vactivity9vbase9vis9va9vmeasure9vof
9vin9vpurchasing9vor9vmanufacturing9vgoods.9vIn9vt 9vwhatever9vcauses9vthe9vincurrence9vof9va9vvar
he9vcase9vof9vmanufactured9vgoods,9vthese9vcost iable9vcost.9vExamples9vof9vactivity9vbases9vincl
s9vconsist9vof9vdirect9vmaterials,9vdirect9vlabor,9van ude9vunits9vproduced,9vunits9vsold,9vletters9vty
d9vmanufacturing9voverhead.9vA9vperiod9vcost9vis9 ped,9vbeds9vin9va9vhospital,9vmeals9vserved9vin9v
va9vcost9vthat9vis9vtaken9vdirectly9vto9vthe9vincome a9vcafe,9vservice9vcalls9vmade,9vetc.
9vstatement9vas9van9vexpense9vin9vthe9vperiod9vin
9vwhich9vit9vis9vincurred. 1-8 The9vlinear9vassumption9vis9vreasonably
, valid9vproviding9vthat9vthe9vcost9vformula9vis9vuse
d9vonly9vwithin9vthe9vrelevant9vrange.
18th Edition
By Ray Garrison, Eric Noreen and Peter Brewer
Verified Chapter's 1 - 16 | Complete
,Table of Contents
9v 9v
Chapter9vOne:9vManagerial9vAccounting9vand9vCost9vConcepts9vC
hapter9vTwo:9vJob-
Order9vCosting:9vCalculating9vUnit9vProduct9vCosts
Chapter9vThree:9vJob-
Order9vCosting:9vCost9vFlows9vand9vExternal9vReporting9vChapter9vFour:9vProce
ss9vCosting
Chapter9vFive:9vCost-Volume-Profit9vRelationships
Chapter9vSix:9vVariable9vCosting9vand9vSegment9vReporting:9vTools9vfor9vManag
ement9vChapter9vSeven:9vActivity-
Based9vCosting:9vA9vTool9vto9vAid9vDecision9vMaking9vChapter9vEight:9vMaster9v
Budgeting
Chapter9vNine:9vFlexible9vBudgets9vand9vPerformance9vAnalysis9v
Chapter9vTen:9vStandard9vCosts9vand9vVariances
Chapter9vEleven:9vResponsibility9vAccounting9vSystems9vCh
apter9vTwelve:9vStrategic9vPerformance9vMeasurement
Chapter9vThirteen:9vDifferential9vAnalysis:9vThe9vKey9vto9vDecision9vMaking9v
Chapter9vFourteen:9vCapital9vBudgeting9vDecisions
Chapter9vFifteen:9vStatement9vof9vCash9vFlows9vC
hapter9vSixteen:9vFinancial9vStatement9vAnalysis
,Chapter 1 9v
Managerial Accounting and Cost Concepts
9v 9v 9v 9v
Questions
1-1 The9vthree9vmajor9vtypes9vof9vproduct9vc 1-4
osts9vin9va9vmanufacturing9vcompany9vare9vdire a. Variable9vcost:9vThe9vvariable9vcost9vper9vu
ct9vmaterials,9vdirect9vlabor,9vand9vmanufacturi nit9vis9vconstant,9vbut9vtotal9vvariable9vcost9vc
ng9voverhead. hanges9vin9vdirect9vproportion9vto9vchanges
9vin9vvolume.
1-2 b. Fixed9vcost:9vThe9vtotal9vfixed9vcost9vis9vconst
a. Direct9vmaterials9vare9van9vintegral9vpart9v ant9vwithin9vthe9vrelevant9vrange.9vThe9vavera
of9va9vfinished9vproduct9vand9vtheir9vcosts9vcan9v ge9vfixed9vcost9vper9vunit9vvaries9vinversely9v
be9vconveniently9vtraced9vto9vit. with9vchanges9vin9vvolume.
b. Indirect9vmaterials9vare9vgenerally9vsmall9v c. Mixed9vcost:9vA9vmixed9vcost9vcontains9vb
items9vof9vmaterial9vsuch9vas9vglue9vand9vnails.9vT oth9vvariable9vand9vfixed9vcost9velemen
hey9vmay9vbe9van9vintegral9vpart9vof9va9vfinished9vpr ts.
oduct9vbut9vtheir9vcosts9vcan9vbe9vtraced9vto9vthe9
vproduct9vonly9vat9vgreat9vcost9vor9vinconvenienc 1-5
e. a. Unit9vfixed9vcosts9vdecrease9vas9vthe9vactivity9vl
c. Direct9vlabor9vconsists9vof9vlabor9vcosts9vt evel9vincreases.
hat9vcan9vbe9veasily9vtraced9vto9vparticular9vpr b. Unit9vvariable9vcosts9vremain9vconstant9vas9v
oducts. the9vactivity9vlevel9vincreases.
Direct9vlabor9vis9valso9vcalled9v―touch9vlabor.‖ c. Total9vfixed9vcosts9vremain9vconstant9vas9v
d. Indirect9vlabor9vconsists9vof9vthe9vlabor9vc the9vactivity9vlevel9vincreases.
osts9vof9vjanitors,9vsupervisors,9vmaterials9vhandl d. Total9vvariable9vcosts9vincrease9vas9vthe9vacti
ers,9vand9vother9vfactory9vworkers9vthat9vcannot vity9vlevel9vincreases.
9vbe9vconveniently9vtraced 9vto9vparticular9vprodu
cts.9vThese9vlabor9vcosts9vare9vincurred9vto9vsup 1-6
port9vproduction,9vbut9vthe9vworkers9vinvolved9v a. Cost9vbehavior:9vCost9vbehavior9vrefers9vto9
do9vnot9vdirectly9vwork9von9vthe9vproduct. vthe9vway9vin9vwhich9vcosts9vchange9vin9vres
e. Manufacturing9voverhead9vincludes9vall9v ponse9vto9vchanges9vin9va9vmeasure9vof9vact
manufacturing9vcosts9vexcept9vdirect9vmaterials9v ivity9vsuch9vas9vsales9vvolume,9vproduction9v
and9vdirect9vlabor.9vConsequently,9vmanufacturi volume,9vor9vorders9vprocessed.
ng9voverhead9vincludes9vindirect9vmaterials9vand9vi b. Relevant9vrange:9vThe9vrelevant9vrange9vis9
ndirect9vlabor9vas9vwell9vas9vother9vmanufacturin vthe9vrange9vof9vactivity9vwithin9vwhich9vassu
g9vcosts. mptions9vabout9vvariable9vand9vfixed9vcost9v
behavior9vare9vvalid.
1-3
A9vproduct9vcost9vis9vany9vcost9vinvolved 1-7 An9vactivity9vbase9vis9va9vmeasure9vof
9vin9vpurchasing9vor9vmanufacturing9vgoods.9vIn9vt 9vwhatever9vcauses9vthe9vincurrence9vof9va9vvar
he9vcase9vof9vmanufactured9vgoods,9vthese9vcost iable9vcost.9vExamples9vof9vactivity9vbases9vincl
s9vconsist9vof9vdirect9vmaterials,9vdirect9vlabor,9van ude9vunits9vproduced,9vunits9vsold,9vletters9vty
d9vmanufacturing9voverhead.9vA9vperiod9vcost9vis9 ped,9vbeds9vin9va9vhospital,9vmeals9vserved9vin9v
va9vcost9vthat9vis9vtaken9vdirectly9vto9vthe9vincome a9vcafe,9vservice9vcalls9vmade,9vetc.
9vstatement9vas9van9vexpense9vin9vthe9vperiod9vin
9vwhich9vit9vis9vincurred. 1-8 The9vlinear9vassumption9vis9vreasonably
, valid9vproviding9vthat9vthe9vcost9vformula9vis9vuse
d9vonly9vwithin9vthe9vrelevant9vrange.
