Archives: Solution Manual

Travis S. Taylor 1 Introduction to Rocket Science and Engineering – Solutions Manual Chapter 1 1.1 Discuss the relevance of the aeolipile to rocket science and why it was considered the first demonstration of the principles of rocketry. 1.2 What […]

Process Costing in Sequential Production Departments: Weighted-Average Method Solutions Manual to accompany Process Costing in Sequential Production Departments: Weighted-Average Method to accompany MANAGERIAL ACCOUNTING Tenth Edition Ronald W. Hilton Cornell University David G. Platt University of Texas at Austin Process […]

17–21 Copyright © 2014 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. PROBLEM 17-28 (CONTINUED) 2. October production cost per gallon: Product HTP-3 PST-4 RJ-5 Joint cost allocation …………………………… $ 654,840 […]

Chapter 17 – Allocation of Support Activity Costs and Joint Costs CHAPTER 17 Allocation of Support Activity Costs and Joint Costs ANSWERS TO REVIEW QUESTIONS 17-1 A service department is a unit in an organization that is not involved directly […]

DATA INPUT Costs: Input Cost $180,000 Processing Cost $450,000 Outputs Resoline (lbs) 8,000 Krypto (lbs) 2,000 Conversion Prices Resoline into Resolite 15$ Krypto into Kryptite 45$ Kryptite into Omega 120$ Packaging Omega 18$ Sale Price (per lb) Resoline 75$ Krypto […]

DATA INPUT USAGE User of Service HR Maintenance CAD HR – – – Maintenance 500 – – CAD 500 500 – Machining 4,000 3,500 4,500 Assembly 5,000 4,000 1,500 Total 10,000 8,000 6,000 Budgeted costs in service departments HR Maintenance […]

DATA INPUT User of Service Library Computing Service Library 0% 20% Computing Services 0% 0% Liberal Arts 60% 30% Sciences 40% 50% Budgeted costs in two service departments Library 900,000$ Computer Services 360,000$ SOLUTION Computing Services Library Liberal Arts Sciences […]

DATA INPUT User of Service Library Computing Service Library 0% 20% Computing Services 0% 0% Liberal Arts 60% 30% Sciences 40% 50% Budgeted costs in two service departments Library 900,000$ Computer Services 360,000$ SOLUTION Provider of Service Cost to be […]

6. Allocate service department costs using the reciprocal-services method (appendix). Copyright © 2014 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Chapter 17 – Allocation of Support Activity Costs and Joint […]

Problem 17-33 Student Name: Class: 1. Reciprocal-services method: Equations: M = 48,000 + .2C C = 250,000 + .1M where M denotes the total cost of the Maintenance Department C denotes the total cost of the Computing Department Solution of […]

Problem 17-24 Student Name: Class: 1. Direct Method Production Department Etching Finishing Cost to Be Provider of Service Allocated Proportion Amount Proportion Amount Maintenance * * * * * Computing * * * * * Total service department costs allocated […]

16–36 Copyright © 2014 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. PROBLEM 16-53 (30 MINUTES) 1. Payback period = inflow cash tax–after annual investment initial (a) Mall restaurant: Payback period […]

16–21 Copyright © 2014 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. PROBLEM 16-44 (40 MINUTES) 1. Net present-value analysis: Old machine: Annual costs: Variable 300,000  $.38 ………………………………………………………. $(114,000 ) […]

Chapter 16 – Capital Expenditure Decisions CHAPTER 16 Capital Expenditure Decisions ANSWERS TO REVIEW QUESTIONS 16-1 “Time is money” is an apt phrase for the evaluation of capital investment projects. A cash flow today is not economically equivalent to a […]

DATA INPUT Construction Costs 780,000$ First Installment (20×0) 390,000$ Second Installment (20×1) 390,000$ Equipment (paid in 20×1) 150,000$ Staffing costs (per year)(start 20×2) 800,000$ Other operating costs (per year) 200,000$ Increased Charitable Contributions 250,000$ Annual Cost Savings 1,000,000$ Major Reburbishment […]

DATA INPUT Initial Investment 124,200$ After Tax Cash Flow 27,000$ Useful Life (years) 7 SOLUTION 1. Payback Period = initial investment / annual after tax cash flow 2. Net Present Value Analysis 10% 12% 14% Present value of after-tax savings: […]

DATA INPUT Annual Savings 27,000$ Acquisition Cost 129,750$ Lifetime of lighting system (years) 8 SOLUTION Present Value of Discount Rate Annuity Discount Factor Annual Savings Annual Savings Acquisition Cost Net Present Value 8% 5.747 27,000$ 155,159$ 129,750$ 25,409$ 10% 5.335 […]

7. Discuss the difficulty of ranking investment proposals, and use the profitability index. 9. Describe the impact of activity-based costing and advanced manufacturing technology on capital-budgeting decisions. Copyright © 2014 McGraw-Hill Education. All rights reserved. No reproduction or distribution without […]

Problem 16-41 Student Name: Class: Enter appropriate data in the yellow cells. An asterisk (*) to the right indicates an incorrect amount. Answers should be entered as whole numbers not formulas. Time 0 Year 1 Year 2 Year 3 Year […]

Case 16-58 Student Name: Class: 1. The net present value of the proposed investment: * Calculation: Time 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 New equipment * Working capital * […]

15–20 Copyright © 2014 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. PROBLEM 15-38 (CONTINUED) 3. The break-even price is $56,667, computed as follows: Let P = break-even bid price P […]

Chapter 15 – Target Costing and Cost Analysis for Pricing Decisions 15-1 CHAPTER 15 Target Costing and Cost Analysis for Pricing Decisions ANSWERS TO REVIEW QUESTIONS 15-1 In the long run, every organization must price its product or service above […]

DATA INPUT Market Price 585$ Markup 25% Direct Material 90$ Direct Labor 225$ Manufacturing overhead 150$ Selling and Admin Expenses 75$ SOLUTION 2. The current selling price is 675$ 3. Leno’s markup is 135$ which is 20% of the current […]

DATA INPUT Direct material 7.50$ Sales Commission 5% Direct labor 9.00$ Freight Expense 1.50$ Manufacturing Overhead 13.50$ Markup 40% Total Product Cost 30.00$ Selling Price 42$ Manufacturing overhead is applied per standard direct-labor hour at the following rate: Add’l Fixed […]

DATA INPUT Sales Revenue 12,500$ Less Sales Commission 1,250$ Sales Commission 10% Net Sales 11,250$ Expenses: Direct Material 3,000$ Direct Labor 3,750$ Manufacturing Overhead-variable 1,125$ Manufacturing Overhead-fixed 750$ Corporate Administration-fixed 375$ Total Costs 9,000$ Income before Taxes 2,250$ Income Taxes […]

7. Explain how product-cost distortion can undermine a firm’s pricing strategy. 11. Describe the legal restrictions on setting prices. Copyright © 2014 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Chapter […]

Problem 15-46 Student Name: Class: Super Sounds, Inc. Computations 1. Budgeted overhead costs: Department I Department II Variable overhead * * Fixed overhead * * Total overhead * * Total budgeted overhead for both departments * Total expected direct-labor hours […]

14–39 Copyright © 2014 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. PROBLEM 14-58 (45 MINUTES) 1. Machine hour requirements: Department Product 1 2 3 4 M50 ………………………………………………………. 500 500 1,000 […]

Chapter 14 – Decision Making: Relevant Costs and Benefits 14–21 Remaining machine hours ……………………………………………………………………… 30,000 Number of food processors to be produced (30,000 ÷ 2) ………………………….. 15,000 Conclusion: Manufacture 20,000 blenders Manufacture 15,000 food processors Purchase 13,000 food processors PROBLEM […]

Chapter 14 – Decision Making: Relevant Costs and Benefits 14-1 CHAPTER 14 Decision Making: Relevant Costs and Benefits ANSWERS TO REVIEW QUESTIONS 14-1 The seven steps in the decision-making process are as follows: Clarify the decision Specify the criterion Identify […]

DATA INPUT Monthly capacity 2500 cabanas per month Current production 1875 cabanas per month 1875 Price per cabana 525.00$ Variable Costs Manufacturing Direct Labor 281,250$ Direct Material 196,875$ Marketing 140,625$ Total Variable Costs 618,750$ Fixed Costs Manufacturing 206,250$ Marketing 131,250$ […]

DATA INPUT Overhead cost per machine hour $48 Fixed manufacturing overhead $30 Machine hours limit 50,000 Blender Food Processor Direct Material 18$ 33$ Direct Labor 12$ 27$ Manufacturing overhead 48$ 96$ Cost if purchased from outside supplier 60$ 114$ Annual […]

DATA INPUT Paints & Supplies Carpeting Wallpaper Sales 190,000$ 230,000$ 70,000$ Variable Costs 114,000$ 161,000$ 56,000$ Fixed Costs 28,000$ 37,500$ 22,500$ Total Costs 142,000$ 198,500$ 78,500$ Operating Income (loss) 48,000$ 31,500$ (8,500)$ Remodeling Remodeling Costs 6,200$ Increased Sales 60,000$ Increased […]

5. Prepare analyses of various special decisions, properly identifying the relevant costs and benefits. 7. Explain the impact of an advanced manufacturing environment and activity- based costing on a relevant-cost analysis. Copyright © 2014 McGraw-Hill Education. All rights reserved. No […]

13–33 Copyright © 2014 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. PROBLEM 13-49 (CONTINUED) 3. (a) The head of the German division should be a team player; however, when the […]

13–21 Copyright © 2014 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. PROBLEM 13-41 (40 MINUTES) Year Income Before Depreciation Annual Depreciation Income Net of Depreciation Average Net Book Value* ROI […]

Chapter 13 – Investment Centers and Transfer Pricing 13-1 CHAPTER 13 Investment Centers and Transfer Pricing ANSWERS TO REVIEW QUESTIONS 13-1 The managerial accountant’s primary objective in designing a responsibility- accounting system is to provide incentives for the organization’s subunit […]

DATA INPUT German Selling price of final product 1,080$ Shipping fees to import circuit board 60$ Labor, overhead, and additional material costs of final product 345$ Import duties levied on circuit board 10% (of transfer price) German Tax Rate 60% […]

DATA INPUT Cost of Debt Capital 9% Market Value of Debt 120,000,000$ Cost Equity Capital 14% Market Value of Equity $180,000,000 Tax Rate 40% Division Total Assets Current Liabilities Before Tax Operating Income (numbers in millions) Properties 217.5$ 4.5$ 43.5$ […]

DATA INPUT (All numbers in thousands) Ending Balance 12/31/x1 25,200$ Increase since last year 5% Minimum Return 15% Sales Revenue 48,000$ Cost of Goods Sold 31,600$ Gross Margin 16,400$ Operating Expenses Administrative 4,280$ Selling 7,200$ 11,480$ Income from operations before […]

5. Explain how to measure a division’s income and invested capital. 7. Explain how to base a transfer price on market prices, costs, or negotiations. Copyright © 2014 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior […]

12–35 Copyright © 2014 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. PROBLEM 12-50 (45 MINUTES) 1. a. The semiannual installments and total bonus for the Charter Division are calculated as […]

12–21 Copyright © 2014 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. PROBLEM 12-42 (CONTINUED) 3. A variety of responses are reasonable for this question. Since the data given in the […]

DATA INPUT Cost Cost Pool Allocation Base Annual Cost Facilities: Building depreciation Square feet of space 380,000$ Equipment depreciation Insurance Utilities: Electricity Cubic feet of space 48,000 Waste disposal Water and sewer Cable TV and phone Heat General adminstration: Administrator […]

DATA INPUT Metro Suburban Outlying Service revenue 950,000$ 750,000$ 350,000$ Variable expenses 150,000 100,000 50,000 Controllable fixed expenses 350,000 270,000 100,000 Fixed expenses controlled by others 180,000 150,000 40,000 Common fixed expenses 45,000$ Income tax expense 245,000$ SOLUTION Segmented income […]

DATA INPUT Department Annual Cost Admissions 117,000$ Registrar 195,000 Computer Services 416,000 Planned Courses Budgeted Budgeted Requiring Division Enrollment Credit Hours Computer Work Liberal Arts 1,000 30,000 12 Sciences 800 28,000 24 Business Adminstration 700 22,000 24 Total 2,500 80,000 […]

5. Prepare a segmented income statement. 7. Describe the balanced scorecard concept and explain the reasoning behind it. Copyright © 2014 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Chapter 12 […]

Case 12-52 Student Name: Class: 1. NORTH AMERICAN INDUSTRIES Segmented Income Statement by Geographic Areas For the Fiscal Year Ended April 30, 20×4 Geographic Areas United States Canada Mexico Unallocated Total Sales in unitsa Furniture * * * * Sports […]

Problem 12-44 Student Name: Class: BUCKEYE DEPARTMENT STORES, INC. Segmented Income Statement (in thousands) Segments of Company Segments of Columbus Division Buckeye Department Cleveland Columbus Olentangy Scioto Downtown Not Stores, Inc. Division Division Store Store Store Allocated Sales revenue * […]

Problem 12-42 Student Name: Class: MOUNT RANIER GENERAL HOSPITAL Performance Report August Flexible Budget Actual Cost Variance August YTD August YTD August F/U YTD F/U Mount Ranier * * * * * * * * General Hospital General Medicine Division […]