Archives: Solution Manual

CHAPTER 23 RELEVANT COSTING FOR MANAGERIAL DECISIONS Related Assignment Materials Student Learning Objectives Questions Quick Studies* Exercises* Problems* Beyond the Numbers Conceptual objectives: C1. Describe the importance of relevant costs for short-term decisions. 23-1,23-2, 23-3, 23-4, 23-5, 23-7, 23-8 23-5 […]

Reporting in Action — BTN 22-1 1. Apple revenues by product line ($ in millions) September 28, 2013 September 29, 2012 September 24, 2011 Total revenues………..……..………………….…..$170,910 $156,508 $108,249 iPhone* (53%)…….……..………………..…….….. 90,583 82,949 57,373 Accessories (13%)…………………..…..…..…… * Revenue rounded up so […]

Problem 22-2A (Continued) Value-based costs are allocated to departments in two steps (i) Compute market value of each floor Floor Square Footage Value per Sq. Ft. Total First floor……………………….…..4,000 $30 $120,000 Second floor….….….……………4,000 20 80,000 Total market value…..….……… $200,000 (ii) […]

Exercise 22-11 (20 minutes) (1) Investment center Operating income Average assets* Return on investment Beverage….….…….…….. $349 $2,628 13.28% (2) Investment center Operating income Sales Profit margin Beverage….….…….…….. $349 $2,681 13.02% Cheese……………………… 634 3,925 16.15% (3) Investment center Sales Average assets* […]

Average invested assets = (€12,888 + €13,099) / 2 Return on investment (assets) = €3,385 / €12,944 = 26.05% (rounded) ©2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in […]

Reporting in Action — BTN 21-1 1. For foreign subsidiaries that do not use the U.S. dollar as their functional currency, Apple reports the annual adjustment (“translation gains and 2. a. As reported in its footnote, the assets and liabilities […]

Problem 21-4B (Continued) Part 3 Overhead Variances Overhead controllable variance Actual overhead incurred [$1,960,000 + $1,200,000].…..……….$ 3,160,000 Fixed overhead volume variance Budgeted fixed overhead cost [at 80% capacity].…..……………$ 2,016,000 Fixed overhead cost applied [252,000 hrs. @ $7]………..…..….. 1,764,000 Fixed overhead […]

Problem 21-1B (Continued) Part 2 TOHONO COMPANY Flexible Budgets For Year Ended December 31, 2015 Flexible Budget Flexible Flexible Variable Amount per Unit Total Fixed Cost Budget for Unit Sales of 18,000 Budget for Unit Sales of 24,000 Sales……………..………………… $150.00 […]

Problem 21-3A (60 minutes) Part 1 Variable or Fixed Classification Amount Variable costs (total divided by 15,000 units) Indirect materials…….…………………………………….…….….…….……… $ 3.00 Indirect labor……..……………………………..……….….…….…….….……… 12.00 Total variable costs………..………………………………..…………….……… $ 24.00 Fixed costs (per month) Depreciation—Building…………………………………..….….…….….……. $ 24,000 Depreciation—Machinery……………..………………………………..….….. 80,000 Taxes […]

EX Exercise 21-21 (25 minutes) Preliminary calculations: Variable overhead rate per DL hour = $48,000/24,000 = $2 per hour Standard number of DL hours = 9,000 units x 3 hrs. per unit = 27,000 hrs. Part 1 Total actual overhead […]

Exercise 21-13 (30 minutes) 1. Preliminary computations Actual quantity: 22,000 bd. ft. (given) Standard quantity: 3,000 units x 8 bd. ft./unit = 24,000 bd. ft. Actual price: $266,200/22,000 bd. ft. = $12.10/bd. ft. Standard price: $12.00/bd. ft. (given) Price and […]

(Total variable overhead variance) Quick Study 21-20 (15 minutes) Sales Actual Flexible Budget Fixed Budget Units 50 50 45 Price per unit $9,000 $9,500 $9,500 Quick Study 21-21 (15 minutes) Sales Actual Flexible Budget Fixed Budget Units 216,944 216,944 225,944 […]

Chapter Outline 5. To help identify factors causing the overhead cost variance managers will analyze the variance separately for controllable and volume variances. a. The controllable variance is the difference between the actual overhead costs incurred and the budgeted overhead […]

Serial Problem — SP 20 Serial Problem, Business Solutions (50 minutes) Part 1 BUSINESS SOLUTIONS Budgeted Income Statements For Months of April, May, and June April May June Sales*…………………………….….………..…….. $69,600 $75,550 $81,500 Cost of goods sold**….……….……….…….. 54,000 57,750 61,500 Gross […]

Problem 20-6B (50 minutes) SONY STEREO Cash Budgets For April, May, and June April May June Beginning balance……………..……..….……..….. $ 3,000 $ 53,000 $ 44,000 Cash receipts Payments on accounts payable**…………… 80,000 188,000 186,000 Payroll…………….……………………….….….…….. 16,000 17,000 18,000 Rent………….…………………….………..…….….…. 6,000 6,000 […]

Problem 20-2B (continued) (2) A1 MANUFACTURING Cash Budget For July, August, and September July August Sept. Beginning cash balance*…………….….……… $12,900 $12,600 $24,371 Cash receipts (from part 1)………………..…… 59,680 66,840 74,200 Total cash available ……………………….…..…. 72,580 79,440 98,571 Cash disbursements Rent…………………………………..………………..… […]

Problem 20-7A (Continued) Part 4 Cash payments on product purchases (for June and July) From purchases in Total % Paid June July May…………….….…….….….…….……$308,000 40% $123,200 June………………..………..….….……..638,000 60 382,800 ….………..……………………………. 40 $255,200 Part 5 AZTEC COMPANY Cash Budget June and July […]

Problem 20-4A (130 minutes) Part 1 ZIGBY MANUFACTURING Sales Budgets April, May, and June 2015 Budgeted Units Budgeted Unit Price Budgeted Total Dollars April 2015………………..……………………….….…….…20,500 $23.85 $ 488,925 May 2015………………….………………….….…….……..19,500 23.85 465,075 Part 2 ZIGBY MANUFACTURING Production Budget April, May, […]

Exercise 20-30 (continued) CASTOR, INC. Cash Receipts Budget For April, May, and June April May June Sales……………..…………………….…..….….….… $32,000 $40,000 $24,000 Less ending accts. receivable (50%)………. 16,000 20,000 12,000 Cash receipts from Exercise 20-31 (30 minutes) (1) KELSEY Cash Receipts Budget […]

Exercise 20-22 (30 minutes) Mike’s Motors Corp. Cash Budget For July, August, and September July August September Beginning cash balance $34,000 $30,000 $30,000 Cash receipts 85,000 111,000 150,000 Total cash available 119,000 141,000 180,000 Cash disbursements (113,000) (99,900) (127,400) Interest […]

Exercise 20-9 (15 minutes) 1. RAD CO. Direct Labor Budget For April, May, and June April May June Budgeted production (units)….….…………… 442 570 544 Direct labor hours per unit….….……………… x 0.50 x 0.50 x 0.50 Total labor hours needed……………….…….… 221 […]

Quick Study 20-19 (10 minutes) GUITAR SHOPPE Cash Receipts Budget For Month Ended September 30 Cash receipts from September cash sales (40% x $170,000)………… $ 68,000 Quick Study 20-20 (10 minutes) MUSIC WORLD Cash Receipts Budget For Month Ended September […]

Debt ratio = $262,000 / $412,000 = 63.6% ©2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, […]

Problem 2-2B (Concluded) Part 3 SOFTWORKS Trial Balance April 30 Debit Credit Cash …………..……………………………..….….….. $ 17,262 Accounts receivable……………….…….….……. 9,350 Prepaid insurance…………………..……………… 5,000 Office equipment…………….……………….…….. 6,700 Computer equipment……………………………… 34,500 Building…………….…………………..………….…… 34,500 Land……………….…………….….….…..….….….… 22,000 Accounts payable……………….….….….………. $ 580 Notes payable………………..………………………. 20,700 Common […]

Problem 2-5A (90 minutes) Part 1 NETTLE DISTRIBUTION Balance Sheet December 31, 2014 Assets Liabilities Cash……………………..….. $ 64,300 Accounts payable…..………..$ 3,500 Accounts receivable…. 26,240 NETTLE DISTRIBUTION Balance Sheet December 31, 2015 Assets Liabilities Cash……………………..….. $ 15,640 Accounts payable…………….. $ 33,500 […]

Problem 2-2A (Concluded) Part 3 ARACEL ENGINEERING Trial Balance June 30 Debit Credit Cash………………………………………..………….. $ 22,945 Accounts receivable…..….…….…….…….…. 29,000 Prepaid insurance……………..….…….………. 3,000 Office equipment…………….………….……..… 6,150 Drafting equipment.…………………………….. 80,000 Building…………….………………….……..….….. 55,000 Land……………….……………………………….….. 49,000 Accounts payable……………….……………….. $ 1,333 Notes payable………………..…….…….……..… 53,200 Common […]

Exercise 2-21 (15 minutes) a. The debit column is correctly stated because the erroneous debit (to Accounts Payable) is deducted from an account with a (larger assumed) credit balance. c. The Automobiles account balance is correctly stated. d. The Accounts […]

Exercise 2-8 (30 minutes) Cash Photography Equipment 20 3,331 5 880 31 675 Common Stock Balance 6,176 Aug. 1 40,000 Office Supplies Photography Fees Earned Aug. 5 880 Aug. 20 3,331 Prepaid Insurance Utilities Expense Aug. 2 2,100 Aug. 31 […]

CHAPTER 2 ACCOUNTING FOR BUSINESSTRANSACTIONS Related Assignment Materials Student Learning Objectives Questions Quick Studies* Exercises* Problems* Beyond the Numbers Conceptual objectives: explain their role in double- entry accounting. 2-10 Analytical objectives: A1. Analyze the impact of transactions on accounts and […]

Problem 19-2B (25 minutes) Part 1 E’LONTE COMPANY Variable Costing Income Statement Sales (250,000 x $18)…………….……………………….….….….….… $4,500,000 Variable expenses Variable production costs (250,000 x $6*)…..…..….….….…..$1,500,000 Variable selling & admin. expenses (250,000 x $4)……..….. 1,000,000 Total variable expenses…………………………………………….….. 2,500,000 Contribution margin…………………………..…………………………… […]

Exercise 19-8 (concluded) Part 2 The company sold 170 ATVs and its contribution margin totals $265,200 for can also compute the $1,560 as follows. Selling price per ATV…………………..…………..…..….….….….….. $3,800 Variable expenses Cost per ATV………………………………………………………………..$1,830 Selling expenses ($270 per ATV) 270 […]

Quick Study 19-17 (10 minutes) Per unit Direct materials……………….…………………………………..…………………….……. $50 Direct labor………………..……………….………………..………………………..…..…… 12 Variable overhead…………………………….……………….…………….….….….……. 6 Quick Study 19-18 (10 minutes) The suggested selling price for the special order ($68 per unit) exceeds the variable costs per unit ($30 + […]

Chapter 19 Variable Costing and Analysis QUESTIONS 1. Variable costing includes direct materials, direct labor, and variable overhead as 2. Absorption costing includes direct materials, direct labor, variable overhead and fixed overhead as part of product costs. All costs of […]

CHAPTER 19 VARIABLE COSTING AND PERFORMANCE REPORTING Student Learning Objectives and Related Assignment Materials* Student Learning Objectives Discussion Questions Quick Studies Exercises Problems** (A & B set) Beyond the Numbers Conceptual objectives: C1. Describe how absorption costing can result in […]

in fixed assets can lower variable costs (as is the case here), which lowers its break-even point, making it easier to make a profit with less sales. ©2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. […]

Problem 18-4B (75 minutes) Part 1 Instructor note: Use the equation in Exhibit 18.12 2015 break-even in dollar sales = Fixed costs / Contribution margin ratio = $200,000 / 20%* Part 2 Instructor note: Use equation in Exhibit 18.12 with […]

Problem 18-5A (65 minutes) Part 1 Instructor note: Use the equation in Exhibit 18.12 Break-even in dollar sales = Fixed costs / Contribution margin ratio Product T: *To compute contribution margin ratio Sales price per unit Product T ($2,000,000 / […]

Exercise 18-23 (25 minutes) 1. Selling price per composite unit 5 Easy returns @ $50 each………………..…………….….….….….….….. $ 250 2. Variable costs per composite unit 5 Easy returns @ $30 each………………..…………….….….….….….….. $ 150 3 Moderate returns @ $75 each………………………………..………….… 225 2 […]

Exercise 18-5 (20 minutes) The scatter diagram and its estimated line of cost behavior appear below. The cost pattern appears to exhibit a step-wise pattern. ©2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized […]

Chapter 18 Cost Behavior and Cost-Volume-Profit Analysis QUESTIONS 1. A variable cost is one that varies proportionately with the volume of activity. For units) are treated as variable costs with respect to the number of units produced. 2. Variable costs […]

Chapter Outline C. Sensitivity Analysisknowing the effects of changing some estimates used in CVP analysis by substituting new estimated amounts (in total or per unit as appropriate) in the related formula can be helpful in making predictions. Can also use […]

CHAPTER 18 COST BEHAVIOR AND COST-VOLUME-PROFIT ANALYSIS Related Assignment Materials Student Learning Objectives Discussion Questions Quick Studies* Exercises* Problems* Beyond the Numbers Conceptual objectives: C1. Describe different types of cost behavior in relation to production and sales volume. 1,2, 3, […]

Problem 17-5B (continued) 4. Pattern alignment $64,400/560 batches $115/batch Cutting $50,430/12,300 machine hours $4.10/MH Moving product $100,800/2,400 moves $42/move Sewing $327,600/4,200 direct labor hours $78/DLH Pup Tent Pop-Up Tent Pattern alignment 140 batches x $115……….$ 16,100 420 batches x $115….…….$ […]

Problem 17-5A (45 minutes) 1. Plantwide overhead rate: Total overhead cost = $128,250 + $268,000 + $182,000 = $578,250 . Total volume 20,000 + 100,000 cases 120,000 cases 2. Extra Fine Family Style Direct materials + Direct Labor $ 6.00 […]

Exercise 17-15 (40 minutes) Part 1 Determination of cost per driver unit Cost Center Cost Driver Cost per Driver Professional salaries….….……………$1,600,000 10,000 hours $160 per hour Part 2 Allocation of cost to the surgical departments using ABC General Surgery Cost […]

Exercise 17-8 (25 minutes) 1. Components $1,004,000/6,000 MH $167.33/machine hour* *rounded Model 145 Model 212 Component Overhead 1,800 MH x $167.33/MH $ 301,194* 4,200 MH x $167.33/MH $ 702,786* Finishing 800 WH x $155.10/WH 124,080 2,200 WH x $155.10/WH 341,220 […]

CHAPTER 17 ACTIVITY-BASED COSTING AND ANALYSIS Related Assignment Materials Student Learning Objectives Discussion Questions Quick Studies* Exercises* Problems* Beyond the Numbers Conceptual objectives: C1. Distinguish among the plant wide overhead rate method, the departmental overhead rate method, and the activity-based […]

Reporting in Action — BTN 16-1 1. These costs are part of getting the products that Apple sells to its 2. These costs would either be expensed as cost of sales or as selling and administrative expenses. Thus, net income […]

Comprehensive Problem (Continued) (Using weighted-average) Cost assignment and reconciliation Costs transferred out Direct materials (11,000 EUP x $2.90 per EUP)……………….$ 31,900 Conversion (11,000 EUP x $21.75 per EUP)……………………. 239,250 $271,150 Costs of ending Work in Process Part 3 — Journal […]

Problem 16-5B (80 minutes) Part 1 SWITCH COMPANY Process Cost Summary – FIFO Method For Month Ended January 31 Costs Charged to Production Costs of beginning work in process Direct materials……………..………………..….……….………….. $ 7,500 Conversion………………..……………….……………………………. 49,840 $ 57,340 Costs incurred this […]