Solutions Manual
for
COST ACCOUNTING
Creating Value for Management Fifth Edition
MICHAEL MAHER
University of California, Davis
Table of Contents
Chapter 1 Chapter 15
Cost Accounting: How Managers User Using Differential Analysis for
Cost Accounting Information Production Decisions
Chapter 2 Chapter 16
Cost Concepts and Behaviour Managing Quality and Time
Chapter 3 Chapter 17
Cost System Design: An Overview Planning and Budgeting
Chapter 4 Chapter 18
Job Costing Flexible Budgeting and Performance
Evaluation
Chapter 5
Process Costing Chapter 19
Performance Evaluation: Cost
Chapter 6 Variances
Spoilage and Quality Management
Chapter 20
Chapter 7 Performance Evaluation in
Allocating Costs to Departments Decentralized Organizations
Chapter 8 Chapter 21
Activity-Based Costing Transfer Pricing
Chapter 9 Chapter 22
Activity-Based Management Nonfinancial Performance Measures
Chapter 10 Chapter 23
Allocating Joint Costs Capital Investmenet Decisions
Chapter 11 Chapter 24
Variable Costing Inventory Management
Chapter 12 Chapter 25
Cost Estimation Management Ethics and Financial
Fraud
Chapter 13
Cost-Volume-Profit Analysis Chapter 26
Revenue, Mix and ield Variances
Chapter 14
Differential Cost and Revenue Analysis
How to Use this File
This file contains an entire manual for your use. Within this file, there have been hypertext links created to
allow you to quickly access various subjects. The following chart is to be used as a guide as to how to move
about this document easily. Please print out a copy for future reference.
The magnifying glass with the "+" enlarges your page. The magnifying glass
containing "" reduces your page. (Click on the icon, then click on your page.)
These four icons are used to access pages one at a time. The first icon, ,
allows you to move quickly to the first page of the book. The last icon, , allows
you to move quickly to the last page. The two icons, , allow you to view
pages one at a time, forwards and backwards.
The Go Back and Go Forward buttons allow you to retrace your steps in a
document, moving to each view in the order visited.
The Actual Size button displays the page at 100 percent.
The Fit Page button scales the entire page down to fit within the window.
The Fit Width button scales the page width to fill the window.
Click the Page Only button (first on the left side of toolbox) to close the overview
area of the window. Only the page you want to view will be showing.
Click the Bookmarks and Page button (second from the left on toolbox) to open
the overview area and display bookmarks created for the document. (See next
entry for bookmark explanation.)
This is a sample of the bookmarks that will display when the Bookmarks and
Page button is used.
The arrow to the left of the list indicates that it is a folder containing subentries
associated with its main entry. All other icons are indicators of hypertext links. To
use the hypertext links, simply click on the icon and it will automatically transport
you to that location.
Chapter 1
Cost Accounting: How Managers
Use Cost Accounting Information
Solutions to Review Questions
11.
C Analysis of divisional performance
A Costing for income tax purposes
B Determining how many units to produce in the coming week
12.
Descriptions of the six business functions in the value chain are as follows:
1. Research and development: the creation and development of ideas related to new products, services,
or processes.
2. Design: the detailed development and engineering of products, services, or processes.
3. Production: the collection and assembly of resources to produce a product or deliver a service.
4. Marketing: the process that informs potential customers about the attributes of products or services, and
leads to the sale of those products or services.
5. Distribution: the process established to deliver products or services to customers.
6. Customer Service: product or service support activities provided to customers.
13.
Value-added activities are activities that customers perceive as adding utility to the goods or services they
purchase. Nonvalue-added activities do not add value to the goods or services.
14.
Differential costs are important for managerial decision making, but other cost data can provide
management with additional important information. For example, inventory values and costs of goods sold
are important for income tax and financial reporting purposes as well as for most bonus and cost-plus
contracting purposes. Costs for performance evaluation are not necessarily differential costs. Companies try
to recover all costs, hence some estimate of total costs is needed. (This could be an opportunity to discuss
short-run and long-run costs with students, noting that in the long run, all costs must be covered.)
The McGraw-Hill Companies, Inc., 1997
Solutions Manual, Chapter 1 1
15.
Costs that could be shared among housemates might include a share of the rent, food, utilities, and other
related costs. Costs that would differ with the addition of another person are the differential costs. These
differential costs might include food. It would be necessary to negotiate an agreement between you and the
other person considering all factors. For example, should you split the total costs or charge only the
differential costs of the additional person.
Businesses are often faced with similar decisions on finding the appropriate cost base for splitting costs.
There are no generally accepted accounting rules for determining appropriate shared costs in either
situation. Hence, it is important to specify arrangements about costs precisely when agreements are made.
16.
Performance evaluation systems are designed for a specific company's needs. The systems should be
flexible to adapt to the circumstances which exist in that company. A common set of accounting principles
would tend to reduce flexibility and usefulness of these systems. As long as all parties know the accounting
basis used by the system, the exact rules can be designed in whatever manner the parties deem
appropriate.
17.
Most utilities are characterized by the need to install a substantial amount of equipment to meet peak loads.
The peak load for the telephone company is during business hours, particularly in the mid-morning. At other
times this equipment is operating at less than capacity. That is, there are lines available for use. By
encouraging users to shift their usage from the peak times to such off-peak hours as evenings, nights and
weekends, less equipment is required and the existing equipment is utilized more heavily.
The considerations in the decision would include: (a) the savings from not having to purchase more
equipment; (b) the revenues that could be generated on off-peak hours when existing equipment would be
sufficient; (c) the revenues that could be generated from telephone calls that would not be made at all at the
higher prices; and (d) the costs of operating the telephone system in off-peak hours. Offsetting these
benefits would be the reduction in revenues from calls that would be made during off-peak hours even if full
rates were in effect. Apparently the telephone company has found that the benefits outweigh the loss in
revenues from using off-peak rates.
18.
While a manager, and not the controller, has the business expertise to make management decisions, the
decisions will not be good ones if the manager does not understand the data used to make them. For
example, the manager may be working with the costs of a product, and not realize which costs are fixed and
which are variable. The controller understands the types of data that are available, the rules used to
accumulate the data, and the limitations that exist on the data. Therefore, the manager and the controller
need to interact in the decision-making process. The controller can provide the manager with the relevant
data, and an explanation of its suitable uses. The manager then can make better decisions.
The McGraw-Hill Companies, Inc., 1997
2 Cost Accounting, 5/e
May 7, 2013 Performance Management and Salary Adjustment Processes Administrative and Professional Faculty Information Technology The goals of performance management processes are to provide feedback on an annual, systematic basis to Administrative and Professional (A/P) faculty members, and to ensure that Information Technology upper management …
96. Operations Management 10e William J. Stevenson Solutions manual 96. Operations Management 10e William J. Stevenson Solutions manual Source: http://newsgroups.derkeiler.com/Archive/Sci/sci.engr/2009-05/msg00015.html From: "solutionsservice@xxxxxxxxxxx" Date: Mon, 25 May 2009 09:43:56 -0700 (PDT) solutions manual and Test Bank contact with , solutionsservice (at) hotmail.com (my email address,solutionsservice@xxxxxxxxxxx ), …
Solutions Manual for COST ACCOUNTING Creating Value for Management Fifth Edition MICHAEL MAHER University of California, Davis Table of Contents Chapter 1 Chapter 15 Cost Accounting: How Managers User Using Differential Analysis for Cost Accounting Information Production Decisions Chapter 2 Chapter 16 Cost Concepts and …
Principles of accounting J. Ireland 2790025 2005 Undergraduate study in Economics, Management, Finance and the Social Sciences This guide was prepared for the University of London External Programme by: Jennifer Ireland, Department of Accounting and Finance, London School of Economics and Political Science. This is …
COMPTROLLER OF THE CURRENCY BANK ACCOUNTING ADVISORY SERIES December 2008 This edition of the Bank Accounting Advisory Series expresses the Office of the Chief Accountant's current views on accounting topics of interest to national banks. Banks prepare their Consolidated Reports of Condition and Income (call …