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Solution Manual For Cost Accounting, 15th Edition

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Solution Manual For Cost Accounting, 15th Edition - Page 1 preview imageSolutions ManualCOSTACCOUNTINGFifteenth EditionCharles T. HorngrenSrikant M. DatarMadhav V. Rajan
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Solution Manual For Cost Accounting, 15th Edition - Page 2 preview image
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Solution Manual For Cost Accounting, 15th Edition - Page 3 preview imageiiiTABLE OF CONTENTSPrefaceivDedication ........................................................................................................................................vSupplements Available for 15th EditionviAlternative Suggested Chapter SequencesviiiCategorization of Assignment MaterialxiiPresentation of SolutionsxxviiiMajor Changes in Text for the 15th EditionxxixChanges in Assignment Material for the 15th EditionxxxvChapter Solutions1The Manager and Management Accounting1-12An Introduction to Cost Terms and Purposes2-13Cost-Volume-Profit Analysis3-14Job Costing4-15Activity-Based Costing and Activity-Based Management5-16Master Budget and Responsibility Accounting6-17Flexible Budgets, Direct-Cost Variances, and Management Control7-18Flexible Budgets, Overhead Cost Variances, and Management Control8-19Inventory Costing and Capacity Analysis9-110Determining How Costs Behave10-111Decision Making and Relevant Information11-112Strategy, Balanced Scorecard, and Strategic Profitability Analysis12-113Pricing Decisions and Cost Management13-114Cost Allocation, Customer-Profitability Analysis, and Sales-Variance Analysis14-115Allocation of Support-Department Costs, Common Costs, and Revenues15-116Cost Allocation: Joint Products and Byproducts16-117Process Costing17-118Spoilage, Rework, and Scrap18-119Balanced Scorecard: Quality, Time, and the Theory of Constraints19-120Inventory Management, Just-in-Time, and Simplified Costing Methods20-121Capital Budgeting and Cost Analysis21-122Management Control Systems, Transfer Pricing, and Multinational Considerations22-123Performance Measurement, Compensation, and Multinational Considerations23-1
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Solution Manual For Cost Accounting, 15th Edition - Page 4 preview imageivPREFACEThe keys to the success of a course in cost accounting are the assignment and discussion ofprovocative problem material. The gathering of high-quality assignment material has been acrucial phase of this book’s preparation—not a painful afterthought.Please review the preface in the text in conjunction with examining the suggestions in thisSolutions Manual. Please also read all the front matter of this manual.Anna Jensen, Barbara Durham, and Tola Lawal assisted us greatly with contributing, critiquing,and checking of the problems and their solutions. We thank them for their many wonderfulcontributions.We appreciate the support of Caroline Roop. Her ability to cheerfully respond to our challengesmade our tasks much more manageable. We further appreciate the technical support for dataanalysis provided by DeYett Law.We are thankful to Ellen Geary and Andra Skaalrud at Pearson for providing continual support inpreparing this Solutions Manual.SRIKANT M. DATARMADHAV V. RAJAN
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Solution Manual For Cost Accounting, 15th Edition - Page 5 preview imagevIn memory of Charles T. Horngren 1926–2011Chuck Horngren revolutionized cost and management accounting. He loved newideas and introduced many new concepts. He had the unique gift of explaining theseconcepts in simple and creative ways. He epitomized excellence and never tiredof details, whether it was finding exactly the right wordor working and reworking assignment materials.He combined his great intellect with genuine humility and warmth and a humantouch that inspired others to do their best. He taught us many lessons aboutlife through his amazing discipline, his ability to make everyonefeel welcome, and his love of family.It was a great privilege, pleasure, and honor to have knownChuck Horngren. Few individuals will have the enormous influence thatChuck had on the accounting profession. Fewer still will be able to do it with theclass and style that was his hallmark. He was unique, special, and amazingin many, many ways and, at once, a role model, teacher, mentor, and friend.He will be deeply missed.Srikant M. DatarHarvard UniversityMadhavV. RajanStanford University
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Solution Manual For Cost Accounting, 15th Edition - Page 6 preview imageviSUPPLEMENTS AVAILABLE FOR THE 15TH EDITIONA complete package of supplements is available to assist students and instructors in usingHogren,Cost Accounting, 15th edition.MyAccountingLabMyAccountingLab is an online homework and assessment tool designed to help students practicecost accounting problems and concepts and to give their instructors feedback on studentperformance.Itletscostaccountingprofessorsassignahomeworkdeliverablethatisautomatically graded but that also serves as a tutorial experience for students.BasedonPearson’sMathXLplatform,whichhasgradedmillionsofassignments,MyAccountingLab provides a strong, reliable platform with a rock solid performance history. Tolearn more, visitwww.myaccountinglab.com.For InstructorsInstructor Resource Center (IRC)These password-protected resources are accessible fromwww.pearsonhighered.comforCostAccounting, 15th ed. Resources include the following:•Solutions Manual•Test Bank in Word and in TestGen, including algorithmic questions•Instructor’s Manual•PowerPoint Presentations•Image LibraryInstructor’s ManualBy Sandra J. Cereola© 2015 |0-13-342875-3 | OnlineThe chapter-by-chapter manual offers helpful classroom suggestions and teaching tips.Test Item File© 2015 |0-13-342872-9 | OnlineThis collection of tests for each chapter offers an array of questions ranging from easy todifficult. An electronic version of these questions is also available. TheTest Item FilenowsupportsAssociationtoAdvanceCollegiateSchoolsofBusiness(AACSB)InternationalAccreditation.
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Solution Manual For Cost Accounting, 15th Edition - Page 7 preview imageviiSolutions Manual© 2015 |0-13-342877-X | OnlineThis manual contains the fully worked-out and accuracy-checked solutions for every question,exercise, and problem in the text.PowerPoint Presentations© 2015 | 0-13-342876-1 | OnlineThese chapter-by-chapter presentations provide you with a slide show ready for classroom use.Use the slides as they are or edit them to meet your classroom needs.For StudentsIn addition to this textbook and MyAccountingLab, a companion Web site is available forstudents at www.pearsonhighered.com/horngren.
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Solution Manual For Cost Accounting, 15th Edition - Page 8 preview imageviiiALTERNATIVE SUGGESTED CHAPTER SEQUENCESThe Preface toCost Accountingnoted that our aim in organizing the material was to present amodular, flexible organization that permits a course to be custom tailored. This section presentssix possible sequences for a first course in cost accounting. For each of these six sequences, wealso present the sequence of a second course that would result in coverage of many or all of thetopics inCost Accounting. Outlines I–V all include Chapters 1 to 9 in varying orders ofsequence. Outline VI has a strong (almost exclusive) focus on the decision making role of costaccounting.We analyzed the sequences of chapters assigned by many users of the 14th edition. Althoughmany instructors tended to follow the sequence in the text, other instructors tailored sequences tofit their particular desires. These tailored sequences varied considerably. By far the most populardeparture was to assign the chapter on process costing (Chapter 17) immediately after thecoverage of job costing (Chapter 4) and activity-based costing (Chapter 5). The next mostpopular departure was to assign Chapter 10 after Chapter 2 or 3. All the accompanyingalternative assignment schedules have an optional provision to facilitate tailoring a course.Obviously, instructors should alter any suggested sequence to suit their preferences.OUTLINE I: This basic course provides a balance of topics between the major purposes of costaccounting:1. Calculating the cost of products, services, and other cost objects2. Obtaining information for planning and control and performance evaluation3. Analyzing relevant information for making decisionsFinishing the first course with Chapters 11 and 13 means that topics with less proceduralemphasis are highlighted in the last weeks of the course; these two chapters also introduce topicscovered in more detail in a second course. Some instructors may assign Chapter 10 without usingthe Appendix on “Regression Analysis,” preferring to delay use of the Appendix until the secondcourse (especially if many students have not been exposed to regression analysis at the time ofthe basic course).OUTLINE II: This basic course covers the same chapters as Outline I but assigns Chapter 10(Determining How Costs Behaves) immediately after Chapter 3 (Cost Volume-Profit Analysis).It also assigns Chapter 12 on Strategy, Balanced Scorecard, and Strategic Profitability Analysis.This first part of the second course emphasizes cost management and performance evaluationbefore covering the six chapters (14–20) on cost allocation and other aspects of costing systems.OUTLINE III: After covering Chapters 1 to 9 and 11 in the basic course, this sequence finisheswith a chapter on strategic issues (Chapter 12) and two chapters on cost allocation topics(Chapters 14 and 15). Some instructors view it as important that students who take only one costaccounting course become aware of how pervasive cost allocation issues are in practice.
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Solution Manual For Cost Accounting, 15th Edition - Page 9 preview imageixOUTLINE IV: This basic course is similar to Outline II with one key exception: Chapter 17(Process Costing) is covered immediately after Chapter 5. Many instructors prefer to cover jobcosting and process costing in sequence so that their differences are highlighted.OUTLINE V: This basic course emphasizes technical cost accounting topics more than the otherfive outlines. Chapters 17 and 18 extend Chapters 4 and 5; covering 4, 5, 17, and 18 as a singlesection of the course provides students with a solid understanding of product costing alternatives.OUTLINE VI: This basic course is adopted by instructors who wish to put most emphasis on thedecision making and performance evaluation aspects of cost accounting. Finishing the basiccourse with Chapters 22 and 23 means that behavioral issues are highlighted in the final weeks ofthe course.
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Solution Manual For Cost Accounting, 15th Edition - Page 10 preview imagexOUTLINE IOUTLINE IIOUTLINE IIIBASICCOURSEChapterNumber ofSessionsChapterNumber ofSessionsChapterNumber ofSessions1(1)1(1)1(1)2(2)2(2)2(2)3(2)3(2)3(2)4(3)10(2)4(3)5(3)4(3)5(3)6(2)5(3)6(2)7(2)6(2)7(2)8(2)7(2)8(2)9(2)8(2)9(2)10(2)9(2)11(2)11(2)11(2)12(2)13(2)12(2)14(2)13(2)15(2)Tests(3)Tests(3)Tests(3)Optional(4)Optional(2)Optional(2)323232SECONDCOURSEChapterNumber ofSessionsChapterNumber ofSessionsChapterNumber ofSessions12(3)21(3)10(2)14(2)22(2)13(2)15(2)23(2)21(3)16(2)14(3)15(2)17(2)15(2)17(3)18(2)16(2)18(2)19(2)17(3)19(2)20(2)18(2)20(3)21(2)19(2)22(2)22(2)20(2)23(2)23(2)Tests(3)Tests(3)Tests(3)Optional(6)Optional(6)Optional(6)323232
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Solution Manual For Cost Accounting, 15th Edition - Page 11 preview imagexiOUTLINE IVOUTLINE VOUTLINE VIBASICCOURSEChapterNumber ofSessionsChapterNumber ofSessionsChapterNumber ofSessions1(1)1(1)1(1)2(2)2(2)2(2)3(2)3(2)3(2)10(2)4(3)10(2)4(2)5(3)4(2)5(2)17(3)5(2)17(2)18(2)6(2)6(2)6(3)11(2)7(2)7(2)12(2)8(2)8(2)13(3)9(2)9(2)22(2)11(2)23(2)13(2)Tests(3)Tests(3)Tests(3)Optional(4)Optional(4)Optional(5)323232SECONDCOURSEChapterNumber ofSessionsChapterNumber ofSessionsChapterNumber ofSessions12(3)10(2)7(2)21(3)11(2)8(2)22(2)12(2)9(2)23(2)13(3)17(3)14(3)21(3)18(2)15(2)14(2)19(2)16(2)15(2)20(2)18(2)16(2)21(3)19(2)19(2)14(2)20(2)20(2)15(2)22(2)16(2)23(2)Tests(3)Tests(3)Tests(3)Optional(6)Optional(3)Optional(5)323232
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Solution Manual For Cost Accounting, 15th Edition - Page 12 preview imagexiiCATEGORIZATION OF ASSIGNMENT MATERIALThe assignment material in the 15th edition has been developed to offer instructors a broad rangeof options in developing a challenging and interesting course. The following exhibits assistinstructors in selecting assignment material.Exhibits P-l and P-2 show assignment material that is based on service or nonprofit and onmerchandising (retail, wholesale, or distribution) sectors of the economy. Although many of theassignments in the 15th edition are based in the manufacturing sector, Exhibits P-l and P-2provide many examples for instructors who wish to either select assignment material from abroad range of sectors or intend to concentrate on sectors outside manufacturing.1.SERVICE AND NONPROFIT SECTORS: These assignments include settings such asaccounting firms, law firms, advertising agencies, bank and finance companies, lodgingcompanies, transportation companies, and government agencies2.MERCHANDISING SECTORS: These assignments include settings such as distributors,wholesalers, and retailersThere is growing demand from instructors for assignment material in three specific areas—ethics,globalorinternational,andmoderncostmanagement.ExhibitsP-3toP-5showassignment material in the 15th edition on these three topics.3.ETHICS. The second-to-last problem of many chapters incorporates an ethical issuefacing a management accountant or a manager. Examples include pressure for cookingthebooks,concealingunfavorableinformation,andconflictsofinterestbetweenmanagement incentives and company values. Many of these problems require students toconsider the IMA Statement of Ethical Professional Practice on p.18 of the text.4.GLOBAL AND INTERNATIONAL DIMENSIONS. These assignments include materialbased outside the United States or problems pertaining to companies with operations inmore than one country.5.MODERN COST MANAGEMENT FRONTIER IDEAS. These assignments includematerial that an instructor can use to highlight areas such as customer focus, key successfactors, balanced scorecard, value-chain analysis, strategic analysis of operating income,JIT, and continuous improvement. Assignment material related to activity-based costing(ABC), activity-based management (ABM), and cost drivers is found in many chapters.
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Solution Manual For Cost Accounting, 15th Edition - Page 13 preview imagexiiiEXHIBIT P-1ASSIGNMENT MATERIAL FROM SERVICE AND NOT-FOR-PROFIT SECTORSChapterNumberContext11-18Fast-food restaurants; value chain, cost classification1-20Construction services; key success factors1-24House-painting service; five-step decision-making process1-27Internet company; planning and control1-35Publishing company; ethics; end-of-year actions1-36Shipping company; ethical challenges22-18Marketing research; classification of costs2-21Phone contract; fixed and variable costs2-26Food and music service; total costs and unit costs33-18Travel agency; CVP analysis3-22Restaurant; CVP analysis3-29Music Society; CVP analysis3-33Tourism; CVP analysis3-34Daycare; CVP analysis, target operating income3-35Tax preparer; CVP analysis, margin of safety3-40Printing company; breakeven; alternative cost structures, uncertainty, sensitivity3-47Museum of art; gross margin, contribution margin44-18Residential construction; job costing, normal, actual4-21Consulting firm, job costing4-24University press; job costing, journal entries4-28Canadian accounting firm; actual, normal and variation from normal costing4-29Web-design firm; actual, normal, and variation from normal costing4-32Law firm; job costing4-33Law firm; job costing4-39Printing; allocation and proration of overhead4-41Music contracting agency; job costing55-17Testing labs; activity-based costing, cost hierarchy5-18Professional services firm; alternative allocation bases5-22Architectural firm; department costing based on activities5-23Printing company; activity-based costing5-28Custom framing; activity-based costing5-29Banking; activity-based costing, product costing, cross-subsidization5-30Law firm; job costing, single direct- and indirect-cost categories5-31Law firm; job costing, multiple direct- and single indirect-cost categories5-32Law firm; job costing, multiple direct- and indirect-cost categories5-34Lawn care, landscaping; first-stage allocation, ABC5-35Radiology center; department, activity-cost rates5-38Health care; activity-based costing system
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Solution Manual For Cost Accounting, 15th Edition - Page 14 preview imagexivEXHIBIT P-1 (Continued)ChapterNumberContext66-16Environmental testing; sales budget6-23Window-washing; budgeted cost of jobs6-28Tour company; responsibility accounting, stretch targets6-34Restaurant; purchasing agent responsibility accounting6-42Hair salon; human aspects of budgeting77-287-31Student loan financing; static and flexible budgetsCar detailing; variance analysis88-248-258-27Food delivery service; overhead variancesAircraft maintenance; total overhead, 3-variance analysisBack office services; overhead variances8-37Publishing company; activity-based costing8-408-41Pet food inspection; non-financial variancesCloud services provider; overhead variances99-30Printing press; metrics to minimize inventory buildups9-39Hospital chain; cost allocation, downward demand spiral9-40Hospital chain; cost allocation, responsibility accounting, ethics1010-17Car rental contracts; variable-, fixed- and mixed-cost functions10-22Travel services; estimating a cost function, high-low method10-23Customer-service costs; estimating a cost function, high-low method10-24Consulting services; linear cost approximation10-26Catering company; regression analysis10-31Produce club; high-low method, regression analysis10-32Restaurant; sales and advertising, high-low method, regression analysis10-34Agricultural transportation; interpreting regression analysis10-37Nonprofit hospital; regression, choosing among models10-38Nonprofit hospital; multiple regression1111-24Hospital; relevant costs, decision on closing surgery centers11-26Printing press; choosing customers11-27Pizza restaurant; relevance of equipment costs11-33Limousine service; opportunity costs, relevant costs11-42Fishing tours; dropping and adding tours1212-26Consulting firm; strategy, balanced scorecard12-27Consulting firm; strategic analysis of operating income12-28Consulting firm; analysis of growth, price-recovery, and productivitycomponents12-29Consulting firm; identifying and managing unused capacity12-38Cable and internet services; balanced scorecard, social performance12-39Airline; balanced scorecard, environmental and social performance
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Solution Manual For Cost Accounting, 15th Edition - Page 15 preview imagexvEXHIBIT P-1 (Continued)ChapterNumberContext1313-16Tool repair shop; value-added, nonvalue-added costs13-17Architects; target operating income, value-added costs13-20Energy audits; target costs, effect of process-design changes on servicecosts13-21Hotel management; cost-plus target return on investment pricing13-24Hotel; price discrimination13-27Amusement park; value-engineering, target costing, ABC13-29Repair services; cost-plus, time and materials, ethics13-30Temp labor agency; cost-plus and market-based pricing13-31Testing labs; cost-plus and market-based pricing13-32Industrial site cleanup; life-cycle costing13-33Airline; price discrimination13-34Airline; anti-trust laws, pricing13-35Interior decoration; preparing a bid, pricing, ethics1414-16Hospitals; cost allocation14-18Repair service; customer profitability14-21Hotel; cost allocation to divisions14-23Sports team; variance analysis, multiple products14-31Interior design; customer-cost hierarchy and profitability analysis1515-19Management consulting; direct and step-down support department costallocation15-20Management consulting; reciprocal method support department costallocation15-23Allocation of common living costs15-24Consulting services; allocation of common travel costs15-29University; fixed cost allocation15-35Hotel; revenue allocation, bundled products15-36Organized tours; direct, step-down, reciprocal support departmentallocation1717-38Publishing company; transferred-in costs, weighted-average method17-39Publishing company; transferred-in costs, FIFO method1919-21Conference center; quality improvement, relevant costs and revenues19-23University; waiting time19-24University; waiting time, relevant costs, student satisfaction19-28Pizza delivery; quality improvement, Pareto diagram, cause-and-effectdiagram19-34Healthcare group; waiting time, patient satisfaction, compensation2020-31Deli sandwich shop; supplier evaluation, costs of quality, timely deliveries
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Solution Manual For Cost Accounting, 15th Edition - Page 16 preview imagexviEXHIBIT P-1 (Continued)ChapterNumberContext2121-18Hospital; capital budgeting methods, no income taxes21-19Hospital; capital budgeting methods, income taxes21-2221-33Construction company; payback and NPV methods, no income taxesLaundromat; payback methods, even and uneven cash flows21-24Bakery; new equipment purchase, income taxes21-35Entertainment center; recognizing cash flows for capital investmentprojects2222-16Theme parks; management control systems, balanced scorecard2323-1723-2023-23Educational services; DuPont methodReinsurance and financial services; ROI, RI, EVAVenture capital; Capital budgeting, RI23-29Restaurants; ROI, measurement alternatives for performance measures23-31Media group; ROI, RI, DuPont method, investment decisions, balancedscorecard23-32Media group; division managers' compensation, levers of control23-33Bank; executive compensation, balanced scorecard23-37Health spas; RI, EVA, measurement alternatives, goal congruence
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Cost Accounting by Charles T. Horng...

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