Archives: Solution Manual

CHAPTER 22 RESPONSIBILITY ACCOUNTING AND TRANSFER PRICING Brief Learning Exercises Topic Objectives Skills B. Ex. 22.1 Contribution margin effects 22-5 Analysis B. Ex. 22.2 Contribution margin vs. responsibility margin 22-2, 22-3 Analysis, judgment B. Ex. 22.3 Responsibility center design 22-1, […]

Chapter 22—Responsibility Accounting and Transfer Pricing Financial and Managerial Accounting, 18e 22-1 22 RESPONSIBILITY ACCOUNTING AND TRANSFER PRICING Chapter Summary Chapter 22 surveys the accounting information needs of a decentralized organization. Three types of business responsibility centers are analyzed: cost, […]

a. Schedule showing contribution margin per machine-hour for each product: Sales price per unit 200$ 215$ Less variable costs and expenses: Direct materials 51$ 38$ Direct labor 33 30 b. Recommendation as to which product should be discontinued: scarce resource […]

CHAPTER 21 INCREMENTAL ANALYSIS Brief Learning Exercises Topic Objectives Skills B. Ex. 21.1 Using average unit costs 21-1, 3 Analysis B. Ex. 21.2 Make or buy 21-2–4 Analysis, judgment B. Ex. 21.3 Joint cost allocation 21-1, 2, 4 Analysis, judgment […]

Chapter 21—Incremental Analysis Financial and Managerial Accounting, 18e 21-1 21 INCREMENTAL ANALYSIS Chapter Summary The short-run planning problems covered in Chapter 21 are a natural extension of cost-volume-profit analysis from the previous chapter. The chapter begins with a simple illustration […]

25 Minutes, Medium PROBLEM 20.2B SNUG-AS-A-BUG a. Sales price per unit: Budgeted costs 4,800,000$ Add: Budgeted operating income 560,000 b. (1) Total fixed costs: Manufacturing overhead ($2,400,000 × 90%) 2,160,000$ Selling and administrative expenses ($800,000 × 60%) 480,000 Total fixed […]

Ex. 20.14 a. Vests Skis Ropes Unit selling prices $120 $300 $50 Unit variable costs (60) (210) (10) Unit contribution margins $60 $90 $40 Ex. 20.15 a. b. $975,000 = Monthly Fixed Costs + ($40 × 19,250 DLH) Monthly Fixed […]

CHAPTER 20 COST-VOLUME-PROFIT ANALYSIS Brief Learning Exercises Topic Objectives Skills B. Ex. 20.1 Cost behavior patterns 20-1 Analysis B. Ex. 20.2 Cost classifications 20-1 Analysis B. Ex. 20.3 Using a cost formula 20-1, 20-9 Analysis B. Ex. 20.4 Using a […]

Chapter 20—Cost-Volume-Profit Analysis Financial and Managerial Accounting, 18e 20-1 20 COST-VOLUME-PROFIT ANALYSIS Chapter Summary The relationship between costs and revenue and the level of business activity is the foundation of profit planning. We begin our presentation of cost-volume-profit analysis with […]

PROBLEM 19.2B THE BITMORE COMPANY a. b. 60 Minutes, Strong Target Cost: BIT Target Cost = Target Price – Target Profit Target Cost: MORE Target Cost = $180 – $21.60 = $158.40 Target Price = $120 Target Profit = .12 […]

PROBLEM 19.2A THE KALLAPUR COMPANY (continued) c. KAP1 QUIN 24 60 6 15 32 80 92$ 200$ Since the cost per unit of KAP1 is below the target cost of $102, it is earning a return greater than the desired […]

CHAPTER 19 COSTING AND THE VALUE CHAIN Brief Learning Exercises Topic Objectives Skills B. Ex. 19.1 Value chain components 19-1 Analysis B. Ex. 19.2 Capturing market share with target prices 19-4 Analysis B. Ex. 19.3 Cost of quality 19-7 Analysis, […]

Chapter 19—Costing and the Value Chain Financial and Managerial Accounting, 18e 19-1 19 COSTING AND THE VALUE CHAIN Chapter Summary The value chain is used to organize the discussion of several aspects of strategic cost management. These include activity-based management, […]

PROBLEM 18.8A WILSON DYNAMICS (continued) b. (1) 4,000 72,000 (2) Forging Direct Materials Materials Conversion Forging materials (4,000 units require 0% to complete) 0 Direct materials (4,000 units require 100% to complete) 4,000 Conversion (4,000 units require 75% to complete) […]

Ex. 18.9 (concluded) e. 161,000 Work in Process: Baking Department 161,000 f. 2,500$ 1,125 300 3,925$ 500 equivalent units of mixed materials × $5 per unit Total costs assigned to work in process on August 31 375 equivalent units of […]

CHAPTER 18 PROCESS COSTING Brief Learning Exercises Topic Objectives Skills B. Ex. 18.1 Selecting a cost accounting system 18-1 Analysis, judgment B. Ex. 18.2 Real World: Walmart and J & J 18-1 Analysis, judgment Selecting a cost accounting system B. […]

Chapter 18—Process Costing Financial and Managerial Accounting, 18e 18-1 18 PROCESS COSTING Chapter Summary Costing systems provide information that is used for a large variety of business decisions including planning production of goods and services, pricing products, and controlling associated […]

SOLUTIONS TO PROBLEMS SET B 20 Minutes, Easy PROBLEM 17.1B WINONA ENTERPRISES a. Manufacturing overhead charged to jobs in process, April 30: Direct labor charged to jobs in process, April 30: 20,000$ Overhead application rate 250% b. (1) Work in […]

Ex. 17.10 a. Materials Inventory …….………………………………. 125,000 Accounts Payable ………………………………. 125,000 f. Accounts Receivable …………..………………………… 600,000 Sales ………………………………………………. 600,000 To record December sales on account. Cost of Goods Sold ………..……………………………… 325,000 Finished Goods Inventory ………………………. 325,000 To record cost of […]

CHAPTER 17 JOB ORDER COST SYSTEMS AND OVERHEAD ALLOCATIONS Brief Learning Exercises Topic Objectives Skills B. Ex. 17.1 Accounting for overhead 17-5 Analysis B. Ex. 17.2 Transferring costs 17-5 Analysis B. Ex. 17.3 Overhead application rates 17-3 Analysis B. Ex. […]

Chapter 17—Job Order Cost Systems and Overhead Allocations Financial and Managerial Accounting, 18e 17-1 . 17 JOB ORDER COST SYSTEMS AND OVERHEAD ALLOCATIONS Chapter Summary Cost accounting systems are typically designed to accommodate the specific needs of individual companies. In […]

PROBLEM 16.5B VALLEYVIEW MANUFACTURING (concluded) b. Work in process inventory, beginning of year 8,000$ Add: Manufacturing costs assigned to production: Direct materials used [part a(2)] 235,000$ VALLEYVIEW MANUFACTURING CORP. Schedule of the Cost of Finished Goods Manufactured For the Year […]

PROBLEM 16.5A ANDITON MANUFACTURING (concluded) b. Work in process inventory, beginning of year 75,000$ Add: Manufacturing costs assigned to production: Direct materials used [part a (2) ]2,506,000$ ANDITON MANUFACTURING CORP. Schedule of the Cost of Finished Goods Manufactured For the […]

Brief Exercises Topic Skills B. Ex. 16.1 Product vs. period costs Analysis, communication B. Ex. 16.2 Direct material used Analysis B. Ex. 16.3 Cost of goods sold Analysis B. Ex. 16.4 Materials inventory Analysis B. Ex. 16.5 Direct labor journal […]

Chapter 16—Management Accounting: A Business Partner Financial and Managerial Accounting, 18e 16-1 16 MANAGEMENT ACCOUNTING: A BUSINESS PARTNER Chapter Summary The introduction to management accounting begins with an overview of the design requirements of a managerial accounting system. The system […]

40 Minutes, Strong PROBLEM 15.6A WOLFE COMPUTER a. Oct 28 Inventory of Raw Materials 1,890,000 Accounts Payable (Mitsutonka) 1,890,000 To record purchase of 20,000 disk drives from Mitsutonka for ¥180,000,000 due in 30 days. Exchange rate, $.0105 (¥180,000,000 X $.0105 […]

OVERVIEW OF BRIEF EXERCISES, EXERCISES, PROBLEMS, AND CRITICAL THINKING CASES Brief Exercises Topic Skills B. Ex. 15.1 Foreign currency translations Analysis B. Ex. 15.2 Purchases in a foreign currency Analysis, communication B. Ex. 15.3 Currency strength Analysis B. Ex. 15.4 […]

Chapter 15—Global Business and Accounting Financial and Managerial Accounting, 18e 15-1 15 GLOBAL BUSINESS AND ACCOUNTING Chapter Summary The chapter focuses on some of the aspects of the global environment that have an impact on accounting. We begin with a […]

25 Minutes, Easy (Dollars in Millions) a. Current assets: ( Cash 72.4$ Receivables 150.4 Merchandise inventories 1,400.0 Prepaid expenses 98.0 Total current assets 1,720.8$ Quick assets: b. Current ratio: ( Current assets (part a) 1,720.8$ Current liabilities 2,500.0 Current ratio […]

e. PROBLEM 14.2A DONELSON, INC. (concluded) Favorable and unfavorable trends: Favorable trends. One favorable trend is the $360,000 increase in net sales, which represented an increase of about 14% over the prior year. A second favorable trend is the decrease […]

Brief Learning Exercises Objectives Skills B. Ex. 14.1 Dollar and percentage change 14-1 Analysis B. Ex. 14.2 Trend percentages 14-1 Analysis B. Ex. 14.3 Component percentages 14-1 Analysis B. Ex. 14.4 Working capital and current ratio 14-4 Analysis B. Ex. […]

Chapter 14—Financial Statement Analysis Financial and Managerial Accounting, 18e 14-1 14 FINANCIAL STATEMENT ANALYSIS Chapter Summary Although earlier chapters have touched on topics from financial statement analysis, we now present a comprehensive overview of the subject. The chapter is organized […]

25 Minutes, Medium a. Cash flows from operating activities: Net income 928,000$ Add: Depreciation expense 49,000$ Increase in accounts payable to suppliers 5,000 Increase in accrued interest payable 2,000 56,000 Subtotal 984,000$ Less: Increase in accounts receivable 10,000$ PROBLEM 13.5B […]

25 Minutes, Easy a. Cash flows from investing activities: Purchases of marketable securities (75,000)$ Proceeds from sales of marketable securities (1) 132,000 Loans made to borrowers (210,000) Supporting computations: (1) Proceeds from sales of marketable securities: Cost of securities sold […]

CHAPTER 13 STATEMENT OF CASH FLOWS Brief Learning Exercises Objectives Skills B. Ex. 13.1 Cash flows from operations (direct) 13-3 Analysis B. Ex. 13.2 Cash flows from operations (indirect) 13-7 Analysis B. Ex. 13.3 Cash flows from operations (direct) 13-3 […]

Chapter 13—Statement of Cash Flows Financial and Managerial Accounting, 18e 13-1 13 STATEMENT OF CASH FLOWS Chapter Summary The statement of cash flows was introduced in Chapter 1. This chapter begins by reviewing the purpose of the statement. Its usefulness […]

20 Minutes, Medium a. Capital Stock Additional Total ($1 par Paid-in Retained Treasury Stockholders’ value) Capital Earnings Stock Equity Balances, January 1, 20xx 130,000$ 1,170,000$ 1,400,000$ –$ 2,700,000$ Prior period adjustment (net of income tax benefit) (47,000) (47,000) Issuance of […]

b. Retained earnings, December 31, 2017 As originally reported 7,285,000$ Less: prior period adjustment 350,000 As restated 6,935,000$ Net income 2,540,000 d. continuing operations in 2018, which amounted to $12.25 per share. Slick Software, Inc.’s earnings per share from continuing […]

Brief Learning Exercises Objectives Skills B. Ex. 12.1 Unusual or infrequent item 12-1 Analysis B. Ex. 12.2 Unusual or infrequent item 12-1 Analysis B. Ex. 12.3 Discontinued operations 12-1 Analysis B. Ex. 12.4 Cash and stock dividends 12-4 Analysis B. […]

Chapter 12—Income and Changes in Retained Earnings Financial and Managerial Accounting, 18e 12-1 12 INCOME AND CHANGES IN RETAINED EARNINGS Chapter Summary Chapter 12 continues the coverage of stockholders’ equity but shifts the focus from paid– in capital to retained […]

20 Minutes, Easy b. Stockholders’ equity 100,000 shares, issued and outstanding 4,000 shares 400,000$ 5% cumulative preferred stock, $100 par, authorized PROBLEM 11.4B MARKUP, INC. December 31, 20xx Partial Balance Sheet MARKUP, INC. (concluded) Common stock, $1 par, authorized 100,000 […]

25 Minutes, Medium a. Stockholders’ equity shares authorized, issued, and outstanding 500,000$ Retained earnings at Dec. 31, 2016 170,000$ Add: Net income for 2017 and 2018 890,000 Net income for four-year period 1,060,000$ Less: Dividends paid on 8% preferred stock: […]

Brief Learning Exercises Objectives Skills B. Ex. 11.1 Stockholders’ equity 11-4 B. Ex. 11.2 Stockholders’ equity 11-4 B. Ex. 11.3 Dividends on preferred stock 11-5 B. Ex. 11.4 Dividends on common and preferred stock 11-5 Analysis B. Ex. 11.5 11-5 […]

Chapter 11—Stockholders’ Equity: Paid-In Capital Financial and Managerial Accounting, 18e 11-1 11 STOCKHOLDERS’ EQUITY: PAID-IN CAPITAL Chapter Summary This, the first of two chapters on stockholders’ equity, treats topics concerned with the paid-in capital of a corporation. Consideration of issues […]

15 Minutes, Easy PROBLEM 10.5B Sept 1 Cash 5,075,000 Bonds Payable 5,000,000 Bond Interest Payable 75,000 b. Dec 1 75,000 75,000 Cash 150,000 c. Dec 31 25,000 Bond Interest Payable 25,000 d. June 1 25,000 125,000 Cash 150,000 Bond Interest […]

30 Minutes, Medium a. Liabilities: Income taxes payable 40,000$ 60,000 b. (1 (2 (3 Although the note payable to Northwest Bank is due in 60 days, it is classified as a long-term liability because it is to be refinanced on […]

Brief Learning Exercises Objectives B. Ex. 10.1 Cash effects of borrowing 10-2 B. Ex. 10.2 Effective interest rate 10-5 B. Ex. 10.3 Bonds issued at a discount 10-6 B. Ex. 10.4 Bonds issued a premium 10-6 Analysis B. Ex. 10.5 […]

Chapter 10—Liabilities Financial and Managerial Accounting, 18e 10-1 10 LIABILITIES Chapter Summary At the outset, the chapter distinguishes between current and long-term liabilities before addressing the accounting issues surrounding each category. Among current liabilities, notes payable and payroll related costs […]

45 Minutes, Strong PROBLEM C.8 S & X CO. a. General Journal (1) Nov 9 Cash 15,000 Saunder, Capital 15,000 To record additional investment by owner. (2) 30 Saunder, Capital 4,000 Saunder, Drawing 4,000 To close the owner’s Drawing account. […]

FORMS OF BUSINESS ORGANIZATIONS Problems C.1 E-Z Manufacturing Company 15 Easy LO C-3, C-10 Students are required to calculate partners’ share of net income, determine the effects of income taxes for partners, and prepare a statement of partners’ equity. C.2 […]