Archives: Solution Manual
978-1259578540 Chapter 7 Solution Manual Part 4
Solutions Manual, Chapter 7 31 Problem 7-18 (continued) Given this information, the simplest approach to the solution is: Contribution margin lost if the plant is closed (3,000 units × $14 per unit*) …………………….. $(42,000) Fixed costs that can be avoided […]
978-1259578540 Chapter 7 Solution Manual Part 3
Solutions Manual, Chapter 7 21 Exercise 7-10 (15 minutes) The target production level is 40,000 starters per period, as shown by the relations between per-unit and total fixed costs. “Cost” Per Differential Costs Unit Make Buy Explanation Direct materials …… […]
978-1259578540 Chapter 7 Solution Manual Part 2
Solutions Manual, Chapter 7 11 Exercise 7-2 (continued) 2. The segmented report can be improved by eliminating the allocation of the common fixed expenses. Following the format introduced in Chapter 12 for a segmented income statement, a better report would […]
978-1259578540 Chapter 6 Solution Manual Part 6
48 Managerial Accounting for Managers, 4th Edition Exercise 6A-4 (continued) 2. The activity rates are computed by dividing the costs in the cells of the first-stage allocation above by the total activity from the top of the column. Direct Labor […]
978-1259578540 Chapter 6 Solution Manual Part 5
Solutions Manual, Chapter 6 41 Problem 6-20 (continued) 5. Gallatin Carpet Cleaning appears to be losing money on the Flying N Ranch job. However, caution is advised. Some of the costs may not be avoidable and hence would have been […]
978-1259578540 Chapter 6 Solution Manual Part 4
Solutions Manual, Chapter 6 31 Problem 6-17 (45 minutes) 1. Under the traditional direct labor-hour based costing system, manufacturing overhead is applied to products using the predetermined overhead rate computed as follows: Estimated total manufacturing overhead cost Predetermined = overhead […]
978-1259578540 Chapter 6 Solution Manual Part 3
Solutions Manual, Chapter 6 21 Exercise 6-13 (30 minutes) 1. Activity rates are computed as follows: Activity Cost Pool (a) Estimated Overhead Cost (b) Expected Activity (a) ÷ (b) Activity Rate Machine setups …… $72,000 400 setups $180 per setup […]
978-1259578540 Chapter 6 Solution Manual Part 2
Solutions Manual, Chapter 6 11 Exercise 6-5 (15 minutes) Sales ($1,850 per standard model glider × 20 standard model gliders + $2,400 per custom designed glider × 3 custom designed gliders) …….. $44,200 Costs: Direct materials ($564 per standard model […]
978-1259578540 Chapter 5 Solution Manual Part 8
Solutions Manual, Appendix 5A 69 Exercise 5A-3 (20 minutes) 1 a. Under super-variable costing, the unit product cost for both years includes direct materials of $12. 1 b. Year 1 Year 2 Sales ………………………………………………… $2,000,000 $3,000,000 Variable cost of goods […]
978-1259578540 Chapter 5 Solution Manual Part 7
Solutions Manual, Chapter 5 61 Case 5-30 (75 minutes) 1. See the segmented statement on the second following page. Supporting computations for the statement are given below: Sales: Membership dues (20,000 × $100) …………………….. $2,000,000 Assigned to Magazine Subscriptions Division […]
978-1259578540 Chapter 5 Solution Manual Part 6
Solutions Manual, Chapter 5 51 Problem 5-26 (60 minutes) 1. The disadvantages or weaknesses of the company’s version of a segmented income statement are as follows: a. The company should include a column showing the combined results of the three […]
978-1259578540 Chapter 5 Solution Manual Part 5
Solutions Manual, Chapter 5 41 Problem 5-23 (60 minutes) 1. a. Absorption costing unit product cost is: Direct materials ……………………………. $ 3.50 Direct labor …………………………………. 12.00 Variable manufacturing overhead …….. 1.00 Fixed manufacturing overhead ($300,000 ÷ 30,000 units) …………… 10.00 […]
978-1259578540 Chapter 5 Solution Manual Part 4
Solutions Manual, Chapter 5 31 Problem 5-18 (continued) 2 b. The variable costing income statements appear below: Year 1 Year 2 Year 3 Sales ……………………………………………………………… $3,480,000 $2,900,000 $3,770,000 Variable expenses: Variable cost of goods sold @ $36 per unit ………….. […]
978-1259578540 Chapter 5 Solution Manual Part 3
Solutions Manual, Chapter 5 21 Exercise 5-11 (20 minutes) 1. Division Total Company East Central West Sales ………………………… $1,000,000 $250,000 $400,000 $350,000 Variable expenses ……….. 390,000 130,000 120,000 140,000 Contribution margin …….. 610,000 120,000 280,000 210,000 Traceable fixed expenses . […]
978-1259578540 Chapter 5 Solution Manual Part 2
Solutions Manual, Chapter 5 11 Exercise 5-4 (10 minutes) Total Company Weedban Greengrow Sales* …………………………….. $300,000 $90,000 $210,000 Variable expenses** ………….. 183,000 36,000 147,000 Contribution margin …………… 117,000 54,000 63,000 Traceable fixed expenses …….. 66,000 45,000 21,000 Product line segment […]
978-1259578540 Chapter 5 Solution Manual Part 1
Solutions Manual, Chapter 5 1 Chapter 5 Variable Costing and Segment Reporting: Tools for Management Solutions to Questions 5-1 Absorption and variable costing differ in how they handle fixed manufacturing overhead. Under absorption costing, fixed manufacturing overhead is treated as […]
978-1259578540 Chapter 4 Solution Manual Part 9
Solutions Manual, Appendix 4B 77 Problem 4B-3 (continued) 3. When the predetermined overhead rate is based on capacity, underapplied overhead is interpreted as the cost of idle capacity. Indeed, proponents of this method suggest that underapplied overhead be treated as […]
978-1259578540 Chapter 4 Solution Manual Part 8
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, or posted on a website, in whole or part. Solutions Manual, Appendix […]
978-1259578540 Chapter 4 Solution Manual Part 7
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, or posted on a website, in whole or part. Solutions Manual, Appendix […]
978-1259578540 Chapter 4 Solution Manual Part 6
Solutions Manual, Appendix 4A 51 Appendix 4A Activity-Based Absorption Costing Exercise 4A-1 (20 minutes) 1. Activity rates are computed as follows: Activity Cost Pool (a) Estimated Overhead Cost (b) Expected Activity (a) ÷ (b) Activity Rate Machine setups …… $72,000 […]
978-1259578540 Chapter 4 Solution Manual Part 5
Solutions Manual, Chapter 4 41 Problem 4-23 (continued) 3. The value of ending work in process inventory is the sum of the accumulated costs of the two jobs that were still in process at the end of the month: Job […]
978-1259578540 Chapter 4 Solution Manual Part 4
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, or posted on a website, in whole or part. Solutions Manual, Chapter […]
978-1259578540 Chapter 4 Solution Manual Part 3
Solutions Manual, Chapter 4 21 Variable cost = Change in cost ÷ Change in activity = $36,000 ÷ 60,000 units = $0.60 per unit produced Total cost (First quarter) …………………………………….. $228,000 Variable cost element ($0.60 per unit × 80,000 units) […]
978-1259578540 Chapter 4 Solution Manual Part 2
Solutions Manual, Chapter 4 11 Exercise 4-5 (20 minutes) 1. To determine the cost of goods sold using the direct method, we must determine the unit product cost. We can then determine the unadjusted cost of goods sold as follows: […]
978-1259578540 Chapter 3 Solution Manual Part 8
70 Managerial Accounting for Managers, 4th Edition Problem 3-31 (continued) 2. a. Line 3: Remain unchanged. Line 9: Have a steeper slope. Break-even point: Decrease. b. Line 3: Have a flatter slope. Line 9: Remain unchanged. Break-even point: Decrease. c. […]
978-1259578540 Chapter 3 Solution Manual Part 7
Solutions Manual, Chapter 3 61 Problem 3-28 (continued) 2. The sales mix has shifted over the last year from Standard sets to Deluxe sets. This shift has caused a decrease in the company’s overall CM ratio from 54.2% in April […]
978-1259578540 Chapter 3 Solution Manual Part 6
Solutions Manual, Chapter 3 51 Problem 3-25 (45 minutes) 1. The contribution margin per unit on the first 16,000 units is: Per Unit Sales price …………………….. $3.00 Variable expenses ……………. 1.25 Contribution margin …………. $1.75 The contribution margin per unit […]
978-1259578540 Chapter 3 Solution Manual Part 5
Solutions Manual, Chapter 3 41 Problem 3-20 (continued) c. This problem illustrates the difficulty faced by some companies. When variable labor costs increase, it is often difficult to pass these cost increases along to customers in the form of higher […]
978-1259578540 Chapter 3 Solution Manual Part 4
Solutions Manual, Chapter 3 31 Exercise 3-17 (30 minutes) 1. Profit = Unit CM × Q − Fixed expenses $0 = ($50 − $32) × Q − $108,000 $0 = ($18) × Q − $108,000 $18Q = $108,000 Q = […]
978-1259578540 Chapter 3 Solution Manual Part 3
Solutions Manual, Chapter 3 21 Exercise 3-11 (20 minutes) a. Case #1 Case #2 Number of units sold .. 15,000 * 4,000 Sales …………………….. $180,000 * $12 $100,000 * $25 Variable expenses ……. 120,000 * 8 60,000 15 Contribution margin […]
978-1259578540 Chapter 3 Solution Manual Part 2
Solutions Manual, Chapter 3 11 Exercise 3-3 (continued) 2. Looking at the graph, the break-even point appears to be 3,200 units. This can be verified as follows: Profit = Unit CM × Q − Fixed expenses = $5 × Q […]
978-1259578540 Chapter 3 Solution Manual Part 1
Solutions Manual, Chapter 3 1 Chapter 3 Cost-Volume-Profit Relationships Solutions to Questions 3-1 The contribution margin (CM) ratio is the ratio of the total contribution margin to total sales revenue. It can also be expressed as the ratio of the […]
978-1259578540 Chapter 2 Solution Manual Part 6
50 Managerial Accounting for Managers, 4th Edition Exercise 2A-2 (20 minutes) 1. and 2. The scattergraph plot and regression estimates of fixed and variable costs using Microsoft Excel are shown below: Note that the R2 is approximately 0.94, which means […]
978-1259578540 Chapter 2 Solution Manual Part 5
Solutions Manual, Chapter 2 41 Problem 2-24 (30 minutes) 1. A cost that is classified as a period cost will be recognized on the income statement as an expense in the current period. A cost that is classified as a […]
978-1259578540 Chapter 2 Solution Manual Part 4
Solutions Manual, Chapter 2 31 Problem 2-19 (45 minutes) 1. Marwick’s Pianos, Inc. Traditional Income Statement For the Month of August Sales (40 pianos × $3,125 per piano) …………… $125,000 Cost of goods sold (40 pianos × $2,450 per piano) […]
978-1259578540 Chapter 2 Solution Manual Part 3
Solutions Manual, Chapter 2 21 Exercise 2-13 (20 minutes) 1. Traditional income statement The Alpine House, Inc. Traditional Income Statement Sales ………………………………………………………. $150,000 Cost of goods sold ($30,000 + $100,000 – $40,000) ………………… 90,000 Gross margin …………………………………………….. 60,000 Selling and […]
978-1259578540 Chapter 2 Solution Manual Part 2
Solutions Manual, Chapter 2 11 Exercise 2-5 (20 minutes) 1. Occupancy- Days Electrical Costs High activity level (August) .. 2,406 $5,148 Low activity level (October) .. 124 1,588 Change …………………………. 2,282 $3,560 Variable cost = Change in cost ÷ Change […]
978-1259578540 Chapter 12 Solution Manual Part 8
Solutions Manual, Appendix 12B 67 Appendix 12B Service Department Charges Exercise 12B-1 (15 minutes) 1. and 2. Northern Plant Southern Plant Total Variable cost charges: $0.25 per ton × 130,000 tons ……….. $ 32,500 $0.25 per ton × 50,000 tons […]
978-1259578540 Chapter 12 Solution Manual Part 7
Solutions Manual, Appendix 12A 61 But, from the standpoint of the buying division, Beta Division: £Transfer price Cost of buying from outside supplier = $27 Beta Division won’t pay more than $27 and Alpha Division will not accept less than […]
978-1259578540 Chapter 12 Solution Manual Part 6
Solutions Manual, Appendix 12A 51 buying division, the acceptable range of transfer prices in this situation is: ££$42 Transfer price $57 Assuming that the managers understand their own businesses and that they are cooperative, they should be able to agree […]
978-1259578540 Chapter 12 Solution Manual Part 5
Solutions Manual, Chapter 12 41 Problem 12-21 (continued) 2. Students’ answers may differ in some details from this solution. Applied Pharmaceuticals Return on Stockholders’ Equity Financial Customer perception of first-to-market capability Customer perception of product quality Customer R&D Yield Defect […]
978-1259578540 Chapter 12 Solution Manual Part 4
Solutions Manual, Chapter 12 31 Problem 12-16 (continued) 3. Students’ answers may differ in some details from this solution. Sales Contribution margin per ton Financial Time to fill an order Customer satisfaction with breadth of product offerings Number of new […]
978-1259578540 Chapter 12 Solution Manual Part 3
Solutions Manual, Chapter 12 21 Exercise 12-11 (30 minutes) 1. Net operating income Margin = Sales $70,000 = = 5% $1,400,000 Sales Turnover = Average operating assets $1,400,000 = = 4 $350,000 ROI = Margin × Turnover = 5% × […]
978-1259578540 Chapter 12 Solution Manual Part 2
Solutions Manual, Chapter 12 11 Exercise 12-4 (continued) 3. Management will be able to tell if a hypothesis is false if an improvement in a performance measure at the bottom of an arrow does not, in fact, lead to improvement […]
978-1259578540 Chapter 12 Solution Manual Part 1
Solutions Manual, Chapter 12 1 Chapter 12 Performance Measurement in Decentralized Organizations Solutions to Questions 12-1 In a decentralized organization, decision-making authority isn’t confined to a few top executives; instead, decision-making operating assets. authority is spread throughout the organization. 12-2 […]
978-1259578540 Chapter 11 Solution Manual Part 8
Solutions Manual, Appendix 11A 67 Problem 11A-11 (continued) 3. Variable overhead variances: Actual DLHs of Input, at the Actual Rate Actual DLHs of Input, at the Standard Rate Standard DLHs Allowed for Output, at the Standard Rate (AH × AR) […]
978-1259578540 Chapter 11 Solution Manual Part 7
Solutions Manual, Appendix 11A 61 Problem 11A-9 (continued) Fixed overhead variances: Actual Fixed Overhead Budgeted Fixed Overhead Fixed Overhead Applied to Work in Process $209,400 $210,000 32,000 hours × $6 per hour = $192,000 Budget Variance, $600 […]
978-1259578540 Chapter 11 Solution Manual Part 6
Solutions Manual, Appendix 11A 51 Variable overhead rate variance = (AH × AR) – (AH × SR) ($185,600) – (64,000 hours × $3 per hour) = $6,400 F Variable overhead efficiency variance: Variable overhead efficiency variance = SR (AH – […]
978-1259578540 Chapter 11 Solution Manual Part 5
Solutions Manual, Chapter 11 41 Problem 11-15 (continued) 2. Summary of variances: Material price variance …………………….. $ 3,000 F Material quantity variance ………………… 8,400 U Labor rate variance …………………………. 11,800 U Labor efficiency variance………………….. 1,200 F Variable overhead rate variance […]
978-1259578540 Chapter 11 Solution Manual Part 4
Solutions Manual, Chapter 11 31 Problem 11-13 (45 minutes) 1. a. Actual Quantity of Input, at Actual Price (AQ × AP) Actual Quantity of Input, at Standard Price (AQ × SP) Standard Quantity Allowed for Actual Output, at Standard Price […]