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Solution Manual for Management Accounting for Decision Makers 10th Edition by Peter Atrill, Eddie McLaney A+ $14.99   Add to cart

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Solution Manual for Management Accounting for Decision Makers 10th Edition by Peter Atrill, Eddie McLaney A+

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Solution Manual for Management Accounting for Decision Makers 10th Edition by Peter Atrill, Eddie McLaney A+

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  • December 24, 2023
  • 248
  • 2023/2024
  • Exam (elaborations)
  • Questions & answers
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Instructor’s Manual
Management Accounting
for Decision Makers

Tenth edition




Peter Atrill
Eddie McLaney

, Contents

Chapters Pages

Section A: Authors’ note to tutors 4

Section B: Solutions to exercises 6

Supplementary questions 58

Progress Test 1 81

Progress Test 2 93

Tutorial/seminar questions 108

Revision questions 127



SECTION B


Solutions to exercises
Exercise 2.4 7
Exercise 2.5 8
Exercise 2.8 9
Exercise 3.2 11
Exercise 3.4 12
Exercise 3.5 14
Exercise 4.2 17
Exercise 4.3 18
Exercise 4.7 19
Exercise 5.5 20
Exercise 5.6 21
Exercise 5.8 22
Exercise 6.2 24
Exercise 6.6 25

,Exercise 6.8 28
Exercise 7.4 33
Exercise 7.6 35
Exercise 7.7 36
Exercise 8.2 38
Exercise 8.5 39
Exercise 8.6 40
Exercise 9.4 42
Exercise 9.6 43
Exercise 9.8 45
Exercise 10.5 47
Exercise 10.7 48
Exercise 10.8 49
Exercise 11.3 50
Exercise 11.7 51
Exercise 11.8 52
Exercise 12.1 54
Exercise 12.3 55
Exercise 12.5 57

, C H AP T E R 2




Relevant costs and benefits for decision making


Solution to Exercise 2.4


SJ Services Ltd


£

The relevant cost of skilled labour as such is zero because the staff will be
employed and paid irrespective of the contract. However, if the contract is
undertaken, the business will lose sales in the alternative activity. The effective cost
of this will be the lost sales revenue net of the ‘other costs’ that will be saved, which
amounts to £32 an hour (that is, £24  £8). So cost is


27 hours  £32  864

Semi-skilled staff are being paid anyway, so their wages are not relevant. The
additional cost to be incurred will be the wages paid to the unskilled labour taken on
to replace them. Thus:

14 hours  £14  196

As unskilled labour will be specifically employed for the contract, the relevant hourly
wage rate is £14. Thus:


20 hours  £14  280

General costs 250

The rental income forgone is a relevant opportunity cost. 175

The £300 already spent on the specialised study is a sunk cost and is not relevant.
The relevant cost is the forgone opportunity to sell the results: 250

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