Archives: Solution Manual

direct method makes no inter-service-department allocation, the step method makes a partial inter-service-department allocation, while the reciprocal solution method fully recognizes inter-service-department activities. All three methods allocate costs to the production departments based on the production department’s relative use. (2) […]

Student Name: Class: Administration Accounting Maintenance Molding Painting 10,000 30,000 20,000 360,000 90,000 6.00$ 120.00$ 17.50$ 312.00$ 162.00$ Administration Accounting Maintenance Molding Painting – 0.06 0.04 0.72 0.18 0.09 – 0.06 0.35 0.50 0.01 0.20 – 0.52 0.27 Building area […]

10–1 Chapter 10 Fundamentals of Cost Management Learning Objectives 1. Describe how activity-based cost management can be used to improve operations. 2. Use the hierarchy of costs to manage costs. 3. Describe how the actions of customers and suppliers affect […]

activities do not add value. By identifying activities that do not add value, management is able to focus on eliminating or reducing nonvalue-added activities. By identifying value-added activities, management knows which activities to retain and make more efficient. Common nonvalue-added […]

Student Name: Class: 300,000$ 98,000$ 300,000$ Sales revenue Unused Resources Resource Resources Used Capacity Supplied 96,000$ 2,000$ 98,000$ 16,320 1,560 17,880 112,320$ 3,560$ 115,880$ Correct! Correct! Correct! 24,000$ –$ 24,000$ 19,200 1,800 21,000 43,200$ 1,800$ 45,000$ Correct! Correct! Correct! Unit […]

9–1 Chapter 9 Activity-Based Costing Learning Objectives 1. Understand the potential effects of using externally reported product costs for decision making. 2. Explain how a two-stage product costing system works. 3. Compare and contrast plantwide and department allocation methods. 4. […]

©The McGraw-Hill Companies, Inc., 2017 Solutions Manual, Chapter 9 409 costs and the choice of cost drivers affects the allocation of costs to products. The total product costs are the same under either approach, but the individual product costs cost […]

Student Name: Class: Part a. Estimated Costs Rate 54,000$ 200 orders 270$ «- Correct! Institutional Standard Silver Total 6,750 6,750 9,000 22,500 68,040 68,040 90,720 226,800 113,790$ 98,790$ 114,720$ 327,300$ Total cost Direct labor Indirect costs 39,000$ 24,000$ 15,000$ 78,000$ […]

8–1 Chapter 8 Process Costing Learning Objectives 1. Explain the concept and purpose of equivalent units. 2. Assign costs to products using a five-step process. 3. Assign costs to products using weighted-average costing. 4. Prepare and analyze a production cost […]

©The McGraw-Hill Companies, Inc., 2017 Solutions Manual, Chapter 8 331 costs incurred this period to complete the beginning inventory. The costs transferred-out will tend to be lower versus weighted-average costing during periods of rising costs. The ending work-in-process inventory will […]

Student Name: Class: Part a. Physical Units Materials Labor Overhead 80,000 Correct! Correct! Correct! Correct! Total Costs Materials Labor Overhead 5,534,400 1,560,000 2,208,000 1,766,400 6,757,200$ 1,800,000$ 2,754,000$ 2,203,200$ Correct! Correct! Correct! Correct! 3.75$ Correct! 6.75$ Correct! 5.40$ Current period costs […]

7–1 Chapter 7 Job Costing Learning Objectives 1. Explain what job and job shop mean. 2. Assign costs in a job cost system. 3. Account for overhead using predetermined rates. 4. Apply job costing methods in service organizations. 5. Understand […]

©The McGraw-Hill Companies, Inc., 2017 Solutions Manual, Chapter 7 271 service firms use less direct materials. Also, service firms typically do not show inventories on their balance sheets, and use a Cost of Services Billed account rather than Cost of […]

Student Name: Class: 1. Acc # 75,180 75,180 «- Correct! 5. Acc # 58,800 «- Correct! 18,900 39,900 6. Acc # 29,400 29,400 «- Correct! 7. Acc # 52,920 26,460 8,820 88,200 «- Correct! 8. For this entry you will […]

6–1 Chapter 6 Fundamentals of Product and Service Costing Learning Objectives 1. Explain the fundamental themes underlying the design of cost systems. 2. Explain how cost allocation is used in a cost management system. 3. Explain how a basic product […]

• Cost systems should have a decision focus. • Different cost information is used for different purposes. • Cost information for managerial purposes must meet the cost-benefit test. management system works, just like a flow chart helps you understand how […]

Student Name: Class: Fin-X Sci-X Total 10,000 40,000 50,000 25$ 30$ Parts cost per unit VERMONT INSTRUMENTS Instructor McGraw-Hill/Irwin Problem 06-51 Number of units 250,000$ 1,200,000$ 1,450,000$ 62,000 17,500 70,500 150,000$ Correct! 150,000$ 50,000 3$ Correct! 30,000$ 120,000$ 150,000$ 250,000 […]

Chapter 5 Cost Estimation Learning Objectives 1. Understand the reasons for estimating fixed and variable costs. 2. Estimate costs using engineering estimates. 6. Identify potential problems with regression data. 7. Evaluate the advantages and disadvantages of alternative cost estimation methods. […]

Engineering estimates are based on design specifications and industry and firm cost standards. ©The McGraw-Hill Companies, Inc., 2017 Solutions Manual, Chapter 5 191 • Trying to estimate costs for projects that have not been undertaken in the past (e.g., new […]

1 EXCEL TEMPLATES OPERATIONS GUIDE EXCEL TEMPLATES were developed by McGraw-Hill/Irwin to accompany FUNDAMENTALS OF COST ACCOUNTING, Fifth Edition, by Lanen, Anderson and Maher. It is designed to provide you, the student, with experience in using microcomputers in accounting by […]

©The McGraw-Hill Companies, Inc., 2017 Solutions Manual, Appendix 851 cash flow. The tax shield on depreciation is the savings in taxes associated with the depreciation expense recorded for tax purposes and is a cash flow. value than cash received later […]

4–1 Chapter 4 Fundamentals of Cost Analysis for Decision Making Learning Objectives 1. Use differential analysis to analyze decisions. 2. Understand how to apply differential analysis to pricing decisions. 3. Understand several approaches for establishing prices based on costs for […]

determine the amounts of certain differential costs. For example, federal income taxes are based on historical (sunk) costs. The disposal of a fixed asset may result in a tax based on the difference between the sales proceeds and the undepreciated […]

Student Name: Class: Labor cost Wage rate Labor hours Model per unit per hour per unit Incremental profit (loss) on special order: Star 100 Star 150 Total 1,000,000 1,250,000 2,250,000$ 2,500 2,500 220 270 550,000 675,000 1,225,000 1,025,000$ Correct! Differential […]

3–1 Chapter 3 Fundamentals of Cost-Volume-Profit Analysis Learning Objectives 1. Use cost-volume-profit (CVP) analysis to analyze decisions. 2. Understand the effect of cost structure on decisions. 3. Use Microsoft Excel to perform CVP analysis. 4. Incorporate taxes, multiple products, and […]

3 Fundamentals of Cost-Volume-Profit Analysis Solutions to Review Questions 3-1. Profit = TR – TC = PX – VX – F = (P – V)X – F where Profit = operating profit, TR = total revenue, TC = total costs, […]

Student Name: Class: Programmer Executive Total 560,000$ 1,200,000$ 1,760,000$ PX Weights: Programmer Total Percentage Sales Sales Weight 8,000 20,000 40% Correct! Executive Total Percentage Sales Sales Weight 12,000 20,000 60% Correct! Weighted Contribution Average Margin Weight CM Programmer 40$ 40% […]

2-1 Chapter 2 Cost Concepts and Behavior Learning Objectives 1. Explain the basic concept of “cost.” 2. Explain how costs are presented in financial statements. 3. Explain the process of cost allocation. 4. Understand how material, labor, and overhead costs […]

opportunity cost or an outlay cost. An expense is an outlay cost charged against sales revenue in a particular accounting period and usually pertains only to external financial reports. Product costs are those costs that are attributed to units of […]

Student Name: Class: Part a. 7,800$ 48,300 43,800 12,300$ Correct! Instructor McGraw-Hill/Irwin Exercise 02-41 Beginning direct materials inventory MONROE FABRICATORS Transferred Out Transferred In Ending direct materials inventory Part b. 163,350$ 8,100 11,400 166,650$ Correct! Part c. 166,650$ Direct materials […]

1–1 Chapter 1 Cost Accounting: Information for Decision Making Learning Objectives 1. Describe the way managers use accounting information to create value in organizations. 2. Distinguish between the uses and users of cost accounting and financial accounting information. 3. Explain […]

customers, competitors, suppliers, labor unions, and so on. Cost accounting systems are designed to provide information to internal users (managers). This difference is important, because it affects the design of the systems. Financial accounting systems are based on standards or […]

Student Name: Class: A B C D 75.00$ 75.00$ 75.00$ 75.00$ 75.00$ 150.00 150.00 150.00 150.00 150.00 45.00 45.00 45.00 45.00 45.00 A. Only the differential production costs could be considered as the cost basis. B. The total cost per […]

Student Name: Class: $160,000 $98,400 12,000 $86,400 Correct! Retained earnings, June 30 Less: Dividends Total $84,900 13,500 48,000 $288,000 $87,600 $114,000 86,400 200,400 $288,000 Total assets Land Stockholders’ equity Liabilities Total liabilities & stockholders’ equity Total stockholders’ equity Retained earnings […]

412 WHAT’S NEW IN THE SEVENTH EDITION: Two new In the News features have been added on “How long will the Fed keep interest rates at zero?” and “What would an American fiscal crisis look like?” LEARNING OBJECTIVES: By the […]

400 ❖ Chapter 22/The Short-Run Trade-off between Inflation and Unemployment d. From 2007 to 2009, as the decline in aggregate demand raised unemployment, it also reduced the inflation rate from about 3 percent to about 1 percent. e. From 2010 […]

389 WHAT’S NEW IN THE SEVENTH EDITION: The section on ”A Financial Crisis Takes Us for a Ride Along the Phillips Curve” has been updated. LEARNING OBJECTIVES: By the end of this chapter, students should understand: ➢ why policymakers face […]

367 WHAT’S NEW IN THE SEVENTH EDITION: There are no major changes to this chapter. LEARNING OBJECTIVES: By the end of this chapter, students should understand: ➢ the theory of liquidity preference as a short-run theory of the interest rate. […]

352 ❖ Chapter 20/Aggregate Demand and Aggregate Supply e. In the late 1980s, OPEC began to lose control over the oil market as members began cheating on the agreement. Oil prices fell, which led to a rightward shift of the […]

337 WHAT’S NEW IN THE SEVENTH EDITION: There is a new In the News box on “What Have We Learned?” LEARNING OBJECTIVES: By the end of this chapter, students should understand: ➢ three key facts about short-run economic fluctuations. ➢ […]

Chapter 19/A Macroeconomic Theory of the Open Economy ❖ 325 10. Case Study: Capital Flows from China a. What happens if a country’s government encourages capital to flow to other countries? b. It leads to a weaker currency and a […]

314 WHAT’S NEW IN THE SEVENTH EDITION: A new In the News box on “Is a Strong Currency Always in a Nation’s Interest?” has been added. LEARNING OBJECTIVES: By the end of this chapter, students should understand: ➢ how to […]

298 WHAT’S NEW IN THE SEVENTH EDITION: There is a new In the News feature on “The Changing Nature of U.S. Exports” and an updated presentation of the U.S. trade deficit. LEARNING OBJECTIVES: By the end of this chapter, students […]

281 WHAT’S NEW IN THE SEVENTH EDITION: There are no major changes to this chapter. LEARNING OBJECTIVES: By the end of this chapter, students should understand: ➢ why inflation results from rapid growth in the money supply. ➢ the meaning […]

264 WHAT’S NEW IN THE SEVENTH EDITION: There is a new In the News box on “Why Gold?” LEARNING OBJECTIVES: By the end of this chapter, students should understand: ➢ what money is and what functions money has in the […]

247 WHAT’S NEW IN THE SEVENTH EDITION: A new In the News feature on “Why Has Employment Declined” has been added and all statistics and tables have been updated. LEARNING OBJECTIVES: By the end of this chapter, students should understand: […]

236 WHAT’S NEW IN THE SEVENTH EDITION: There are no major changes to this chapter. LEARNING OBJECTIVES: By the end of this chapter, students should understand: ➢ the relationship between present value and future value. ➢ the effects of compound […]

220 WHAT’S NEW IN THE SEVENTH EDITION: There is a new In the News feature on “Should College Students Sell Equity in Themselves?” LEARNING OBJECTIVES: By the end of this chapter, students should understand: ➢ some of the important financial […]

209 WHAT’S NEW IN THE SEVENTH EDITION: There is a new In the News box on “Does Food Aid Help or Hurt?” LEARNING OBJECTIVES: By the end of this chapter, students should understand: ➢ how much economic growth differs around […]

The purpose of Chapter 11 is twofold: first, to show students how to generate a price index and, second, to teach them how to employ a price index to compare dollar figures from different points in time and to adjust […]