Managerial Accounting Tools for Business Decision Making,7th Edition, Solution Manual

Managerial Accounting Tools for Business Decision Making,7th Edition, Solution Manual

CHAPTER 7

Incremental Analysis

ASSIGNMENT CLASSIFICATION TABLE

Learning Objectives
Questions Brief
Exercises
Do It!
Exercises A
Problems

1. Describe management’s
decision-making process and incremental analysis. 1, 2, 3, 4 1, 2 1 1, 18

2. Analyze the relevant costs in accepting an order at a special price. 5 3 2 2, 3, 4, 18 1A

3. Analyze the relevant costs in a make-or-buy decision. 6, 7 4 3 5, 6, 7, 8, 18 2A

4. Analyze the relevant costs in determining whether to sell or process materials further. 8, 9, 10 5, 6 4 9, 10, 11, 12, 18 3A

5. Analyze the relevant costs to be considered in repairing, retaining or replacing equipment. 11 7 5 13, 14, 18 4A

6. Analyze the relevant costs in deciding whether to eliminate an unprofitable segment. 12 8 6 15, 16, 17, 18 5A

ASSIGNMENT CHARACTERISTICS TABLE

Problem
Number
Description Difficulty
Level Time
Allotted (min.)

1A Use incremental analysis for special order and identify nonfinancial factors in the decision. Simple 20–30

2A Use incremental analysis related to make or buy,
consider opportunity cost, and identify nonfinancial
factors. Moderate 30–40

3A Determine if product should be sold or processed further. Moderate 30–40

4A Compute gain or loss, and determine if equipment should be replaced. Moderate 30–40

5A Prepare incremental analysis concerning elimination of divisions. Moderate 30–40