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Taking It to the Net — BTN 14-5
1. Standards of Ethical Conduct for Management Accountants are posted
at the Web site: http://www.IMAnet.org.
These standards (in abbreviated form) are:
Competence – maintain an appropriate level of professional
competence.
2. The four overarching principles are: Honesty, Fairness, Objectivity, and
Responsibility.
3. The IMA suggests first trying to resolve ethical conflicts by applying the
policies of your organization. If this is unsuccessful, contact your
immediate supervisor (unless he or she is involved in the ethical
Teamwork in Action — BTN 14-6
Part 1
a. Materials used = Beg. Materials + Materials purchased - End. materials
b. Factory overhead
= Depreciation on factory equipment + factory supervision + factory supplies used +
factory utilities + Indirect labor + Miscellaneous production costs + Rent on factory
building + Maintenance on factory equipment
c. Total manufacturing costs
= Materials used (from a) + Direct labor + Factory overhead (from b)
d. Total cost of work in process
= Beg. WIP Inv. + Total manufacturing costs (from c)
e. Cost of goods manufactured
= Total cost of work in process (from d) - Ending WIP Inventory
Part 2
Requires that the team check answer to part (1e) with instructor before
proceeding to part (3).
Financial and Managerial Accounting, 6th Edition
Teamwork in Action (Continued)
Part 3
a. Net sales
b. Cost of goods sold
= Beg. finished goods + Cost of goods manuf. (from 1e) - End. finished goods
c. Gross profit
= Net sales (from a) - Cost of goods sold (from b)
d. Total operating expenses
= Advertising expense + Depreciation expense on office equipment +
Depreciation expense on selling equipment + Office salaries expense
+ Rent expense on office space + Rent expense on selling space +
Sales salaries expense
e. Net income before taxes
= Gross profit (from c) - Total operating expenses (from d)
Entrepreneurial Decision — BTN 14-7
1. Manufacturing costs for SunSaluter include (a) direct materials such as
solar panels and water filters, (b) direct labor to install the systems, and
2. Four goals of a total quality management (TQM) process include reduced
waste, better inventory control, fewer defects, and continuous
Financial and Managerial Accounting, 6th Edition
Hitting the Road — BTN 14-8
Instructor note: Student responses will vary depending on the restaurant chosen.
The general framework of a good response includes:
1. The usual activities are
serving customer at counter
serving customer at drive-up
2. Costs associated with each activity include
Direct and indirect materials – such as meat, bread, pickles, and
other direct and indirect material costs.
The student should observe that most available cost information is
classified by function such as rent, wages, and cleaning supplies. This
3. Answers will vary because classification of fixed or variable depends
on the costs identified in part 2.
Global Decision — BTN 14-9
1. From its 2013 annual report, Samsung reports a warranty expense
2. From its 2013 10-K report, Apple reports warranty expense (“accruals
3. Based on this one year of data, Samsung was more accurate in
estimating warranty expense. Samsung’s warranty expense for the year
was very close to its warranty claims paid during the year. Apple’s
Financial and Managerial Accounting, 6th Edition
