Unlock document.
This document is partially blurred.
Unlock all pages and 1 million more documents.
Get Access
Title: Question 1
QA_Ori: The managerial accountant plays an important role in preparing the information
necessary for effective planning and control decisions. One example is the budget, which
Title: Question 2
QA_Ori:
Financial Accounting Managerial Accounting
(a) Users and decision
makers
Investors, creditors, and
other users external to the
organization
Managers, employees, and
decision makers internal to
the organization
(b) Purpose of
information
Assist external users in
making investment, credit,
and other decisions
Assist managers in making
planning and control
decisions
QA_Edit:
Title: Question 3
QA_Ori: A customer orientation has led companies to adopt the principles of the lean
business model in response to consumer demands. The essence of customer orientation is
Title: Question 4
QA_Ori: Direct labor refers to the efforts of employees who physically convert materials to
Title: Question 5
QA_Ori: Factory overhead is limited to indirect costs that are incurred in the production
costs.
Title: Question 6
QA_Ori: Direct materials are raw materials that physically become part of the product and
can be clearly traced to specific units or batches of product. Indirect materials are used in
Title: Question 7
QA_Ori: Direct labor can be either a prime cost or a conversion cost.
Title: Question 8
QA_Ori:
Direct costs include: costs of materials such as tires, seats, fuel tanks, tracks and
QA_Edit:
Title: Question 9
QA_Ori: Management should be evaluated on the basis of controllable costs. This is
Title: Question 10
QA_Ori: Management usually must be able to predict financial performance to be
Title: Question 11
QA_Ori: Product costs are capitalized because they represent a future value (an asset) to
Title: Question 12
QA_Ori: A manufacturing business produces a product, whereas in a merchandising or
Title: Question 13
QA_Ori: To run a successful business, management must make predictions and estimates
Title: Question 14
QA_Ori: A manufacturing firm converts raw materials into finished products. A
manufacturing company would report three types of inventories on its balance sheet: raw
Title: Question 15
QA_Ori: Manufacturers’ balance sheets usually include small tools, factory buildings,
Title: Question 16
QA_Ori: Manufacturing firms have inventories at various states of completion.
Manufacturing a product requires raw materials, which are converted to finished goods.
Title: Question 17
QA_Ori: Manufacturing activities of a company are described in the manufacturing
Title: Question 18
QA_Ori: The three categories of manufacturing costs are: direct materials, direct labor, and
factory overhead.
Title: Question 19
QA_Ori: Examples of factory overhead costs include: indirect materials, indirect labor,
depreciation of the factory equipment and plant, amortization of patents, the cost of small
Title: Question 20
QA_Ori:
Components of Manufacturing Statement Polaris Examples
Direct material........................................................................Tracks, tires, seats
Title: Question 21
QA_Ori:
Arctic Cat
Manufacturing Statement
For Year Ended December 31, 2011
The date matches the period of the income statement. The “manufacturing statement”
QA_Edit:
Arctic Cat
Manufacturing Statement
For Year Ended December 31, 2011
Title: Question 22
QA_Ori: The income statement describes the revenues and expenses for the year.
Included in the calculation of the cost of goods sold is a line item identified as the cost of
Title: Question 23
QA_Ori: Raw materials inventory turnover and days’ sales in raw materials inventory can
be used to assess raw materials inventory management. Raw materials inventory turnover
Title: Question 24
Title: Question 25
QA_Ori:
Inventory Components ($ millions) Dell (February 3, 2012)
Production materials.............................................................. $ 753
Title: Quick Study 18-1
QA_Ori:
QA_Edit:
Title: Quick Study 18-2
QA_Ori:
1. Managerial accounting
Title: Quick Study 18-3
Title: Quick Study 18-4
Title: Quick Study 18-5
QA_Ori:
1. Indirect cost
2. Direct cost
Title: Quick Study 18-6
QA_Ori:
Title: Quick Study 18-7
QA_Ori:
Finished goods inventory, December 31, 2012............................... $ 345,000
Title: Quick Study 18-8
QA_Ori:
Answer is 3.
Cost of goods sold is computed as:
Beginning finished goods inventory........................................................ $ 500
Title: Quick Study 18-9
QA_Ori:
Title: Quick Study 18-10
QA_Ori:
Briton Company
Manufacturing Statement
For Year Ended December 31, 2013
Direct materials........................................................................................ $190,500
Direct labor .............................................................................................. 63,150
0
Title: Quick Study 18-11
QA_Ori:
1. D
QA_Edit:
Title: Quick Study 18-12
QA_Ori:
(Amounts in millions of Swiss francs)
Raw materials inventory, beginning............................................... 3,243
Title: Quick Study 18-13
QA_Ori:
(in millions of Swiss francs)
Cost of raw materials used**........................................................ 15,539
Beginning raw materials inventory................................................ 3,243
*Rounded
**Beginning RM + Purchased RM – RM used = Ending RM
Title: Exercise 18-1
QA_Ori:
Financial Accounting Managerial Accounting
1. Time
dimension
Historical information with
minimum predictions.
Many projections and estimates;
historical information also presented.
2. Users and
decision
makers
Investors, creditors and
other users external to the
organization.
Managers, employees, and decision
makers internal to the organization.
Title: Exercise 18-2
QA_Ori:
1) Short-term planning usually covers a period of one year.
Primary Information Source
Business Decision Managerial Financial
1. Determine amount of dividends to pay stockholders.......... X X
2. Evaluate a purchasing department’s performance.......... X
Title: Exercise 18-4
QA_Ori:
1. Five cost classifications are
2. Two purposes of identifying these separate cost classifications:
(b) Cost classifications are useful in different types of management analysis.
For example, cost accounting is used to evaluate employees,
