to accompany Managerial Accounting - · PDF fileSolutions Manual to accompany Managerial...

Solutions Manual
to accompany
Managerial
Accounting
Twelfth Edition
Ray H. Garrison
Professor Emeritus, Brigham Young University
Eric W. Noreen
Professor Emeritus, University of Washington
Peter C. Brewer
Miami University

Solutions Manual to accompany
MANAGERIAL ACCOUNTING Ray H. Garrison, Eric W. Noreen, Peter C. Brewer
Published by McGraw-Hill/Irwin, an imprint of The McGraw-Hill Companies, Inc., 1221 Avenue of the Americas, New York, NY 10020.
Copyright 2008 by The McGraw-Hill Companies, Inc. All rights reserved.
No part of this publication may be reproduced or distributed in any form or by any means, or stored in a database or retrieval system, without the prior written consent of The McGraw-Hill Companies, Inc., including, but not limited to, in any network or other electronic storage or
transmission, or broadcast for distance learning.
1 2 3 4 5 6 7 8 9 0 QPD/QPD 0 9 8 7
ISBN: 978-0-07-320293-8
MHID: 0-07-320293-2

The McGraw-Hill Companies, Inc., 2008. All rights reserved.
Solutions Manual, Pricing Appendix 925
Contents Suggested Course Outlines ............................................................................ iv Problem and Case Material Scaled as to Difficulty ............................................ v Suggested Problem and Case Assignments ...................................................... vi Chapter 1 Managerial Accounting and the Business Environment ................ 1
Chapter 2 Cost Terms, Concepts, and Classifications .................................. 19
Chapter 3 Systems Design: Job-Order Costing ........................................... 71
Chapter 4 Systems Design: Process Costing .............................................. 141
Chapter 5 Cost Behavior: Analysis and Use ............................................... 195
Chapter 6 Cost-Volume-Profit Relationships ............................................... 255
Chapter 7 Variable Costing: A Tool for Management .................................. 335
Chapter 8 Activity-Based Costing: A Tool to Aid Decision Making ................. 379
Chapter 9 Profit Planning ......................................................................... 455
Chapter 10 Standard Costs and the Balanced Scorecard ............................... 505
Chapter 11 Flexible Budgets and Overhead Analysis .................................... 591
Chapter 12 Segment Reporting and Decentralization ................................... 647
Chapter 13 Relevant Costs for Decision Making ........................................... 711
Chapter 14 Capital Budgeting Decisions ...................................................... 771
Chapter 15 How Well Am I Doing? Statement of Cash Flows ...................... 827
Chapter 16 How Well Am I Doing? Financial Statement Analysis ................ 877
Appendix A Pricing Products and Services ................................................... 925
Appendix B Profitability Analysis ................................................................. 949

Suggested Course Outlines Course Outline #1: For lower division undergraduates who have completed one or two terms of
financial accounting.
Course Outline #2: For accounting majors or graduate students seeking a comprehensive course in managerial accounting.
Course Outline #3: For management development programs and/or upper division survey courses in managerial accounting.
All outlines assume 45 periods during a term with each period being 50 minutes in length.
COURSE OUTLINE
#1
COURSE OUTLINE
#2
COURSE OUTLINE
#3
Outline #1A Outline #1B
Chapter Periods Chapter Periods Chapter Periods Chapter Periods
1 1.0 1 1.0 1 1.0 1 2.0
2 3.0 16 3.0 2 3.0 2 2.5
3 3.0 17 2.5 3 3.0 3 3.0
4 3.0 2 2.0 4 3.0 5 2.0
5 3.0 3 3.0 5 2.0 6 3.0
6 3.0 4 2.5 6 3.0 7 2.5
7 2.0 5 2.5 7 2.0 8 3.0
8 3.5 6 2.5 8 3.0 9 3.0
9 3.0 7 2.0 9 3.0 10 3.0
10 3.5 8 3.0 10 3.0 11 3.0
11 3.0 9 3.0 11 3.0 12 4.5
12 3.0 10 3.0 12 5.0 13 5.5
13 4.0 11 2.5 13 5.0 14 5.0
14 4.0 12 3.5 14 4.0 Tests 3.0
Tests 3.0 13 3.0 Tests 3.0 45.0
45.0 14 3.0 45.0
Tests 3.0
45.0

Problem and Case Material Scaled as to Difficulty
Each exercise, problem, and case in the text has been rated below as Basic, Medium, or Difficult.
Basic: Straightforward application of concepts, with few extraneous or complicating factors.
Medium: More rigorous application of concepts than in basic problems. Extraneous material may be present and the student may have to use concepts in ways not specifically illustrated in the text. It is not necessary to go beyond this level to give students challenging and thought-provoking homework.
Difficult: Unusually rigorous application of concepts that often includes extraneous data.
Basic Medium Difficult
Chapter 1 1, 2, 3, 4, 5 6, 7, 8 9 Chapter 2 1, 2, 3, 4, 5, 6, 7, 10, 11, 12, 14, 16, 17 19, 20, 21, 23,
24, 25, 26, 27 28, 29, 30, 31, 32
Appendix 2A 8, 13, 15, Appendix 2B 9, 18 22 Chapter 3 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 15, 16,
17, 18, 19, 20, 21 22, 23, 24, 25, 27, 28, 29
30, 31, 33, 34, 35
Appendix 3A 14 26 32 Chapter 4 1, 2, 3, 4, 10, 11, 14, 18, 19, 21 24, 25 26, 27, 28, 29, 32 Appendix 4A 5, 6, 7, 12, 13, 15, 20, 22 30 Appendix 4B 8, 9, 16, 17 23 31 Chapter 5 1, 2, 3, 4, 6, 7, 9, 10, 11, 12, 15, 16 17, 18, 24 21, 22, 23, 27 Appendix 5A 5, 8, 13, 14 19, 20 25, 26, 28 Chapter 6 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15,
16, 17, 18, 19, 20, 21 22, 23, 24, 25, 26, 27, 28, 29, 30
31, 32, 33, 34
Chapter 7 1, 2, 3, 5, 6, 7, 8, 9, 10, 11 4, 12, 13, 14 15, 16, 17, 18, 19 Chapter 8 1, 2, 3, 4, 5, 8, 9, 10, 11, 12, 14, 15, 17, 18,
19, 21 22, 25, 26 32
Appendix 8A 6, 13, 16 23, 27 30 Appendix 8B 7, 20 24, 28, 29 31 Chapter 9 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15 16, 17, 18, 19, 20 21, 22, 23, 24 Chapter 10 1, 2, 3, 4, 5, 6, 8, 9, 10, 11, 12, 13, 14, 16,
17, 19, 20 21, 22, 23, 24, 25 26, 27, 29, 30,
31, 32, 33 Appendix 10A 7, 15, 18 28 Chapter 11 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15,
16, 17, 18, 19, 20, 21 22, 23, 24, 25, 26, 27, 28
29, 30, 31
Chapter 12 1, 2, 3, 6, 7, 8, 11, 12, 13, 14, 15, 18, 20, 22, 23
19, 21, 26, 27, 29, 30, 33
34, 36
Appendix 12A 4, 9, 16 24, 28, 31 35 Appendix 12B 5, 10, 17, 32 25 Chapter 13 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15,
16, 17 18, 19, 20, 21, 22, 23, 27
24, 25, 26, 28, 29, 30
Chapter 14 1, 2, 3, 4, 5, 6, 9, 10, 11, 12, 13, 16, 17, 18, 19, 21, 22, 23, 25, 26
27, 28, 29, 30, 31, 32, 34, 36, 38
33, 39, 40
Appendix 14A 7, 14 Appendix 14C 8, 15, 20, 24 35, 37 Chapter 15 1, 2, 4, 6, 7, 9, 10, 12 14 16, 18, 19 Appendix 15A 3, 5, 8, 11, 13 15 17 Chapter 16 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14 15, 16, 17 18, 19, 20 Pricing App. 1, 2, 3 4, 5 6, 7, 8 Profitability App. 1, 2, 3 4, 6, 7 5, 8

Suggested Problem and Case Assignments
Each problem and case in the text is categorized below as either essential or supplementary.
1. In choosing problems, keep an eye on the difficulty of problems as listed on the preceding page, to be sure that the problem material you choose is consistent with the capabilities of the class.
2. It is not expected that all of the essential problems will necessarily be used; indeed, you may prefer to concentrate entirely on the supplementary problems in some chapters. The categorization below is simply one view of essential versus supplementary.
3. Where problems are listed as, for example, 12 or 16, it means that the problems are similar and either can be assigned.
Essential Supplementary
Chapter 1 4, 5, 6, 7, 8, 9
Chapter 2 14 or 17, 16 or 21, 19 or 27 20, 23, 24, 25, 26, 28, 29, 30, 31, 32
Appendix 2A 15
Appendix 2B 18 22
Chapter 3 18 or 19, 20 or 21, 22, 23 or 25 24, 27, 28, 29, 30 or 32, 31, 33, 34, 35
Appendix 3A 26 32
Chapter 4 1, 2, 3, 4, 10, 11, 14, 18, 19, 21 24, 25, 26, 27, 28, 29, 31
Appendix 4A 5, 6, 7, 12, 13, 15, 20, 22 30
Appendix 4B 8, 9, 16, 17 23, 32
Chapter 5 16, 18, 21 or 23 15, 17, 19, 22, 24, 27
Appendix 5A 14 19, 20, 25, 26
Chapter 6 18 or 19, 20, 21 or 23, 27 22, 24, 25, 26, 28, 29, 30, 31, 32, 33, 34
Chapter 7 10, 11 or 12, 14 13, 15, 16, 17, 18, 19
Chapter 8 22, 25, 26 32
Appendix 8A 23, 27 30
Appendix 8B 24 or 29 28, 31
Chapter 9 9, 11, 13, 15, 17 or 21 8, 10, 12, 14, 16, 18 or 19, 20, 22, 23, 24
Chapter 10 16, 17 or 19, 20 or 24, 23 or 10-25 21, 22 or 26, 27, 29, 30, 31, 32, 33
Appendix 10A 18 or 28
Chapter 11 17 or 26, 18 or 21, 19 or 22 20, 23, 24, 25, 27, 28, 29 or 30, 31
Chapter 12 21 or 29, 22, 23 26, 27, 30, 33, 34
Appendix 12A 24 28, 31,

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