Questions and Answers of Managerial Accounting

Manufacturing Cost Terms. Indicate whether each of the following costs associated with production would be classified as direct materials, direct labor, or manufacturing overhead.1. Salaried
Enterprise Resource Planning (ERP) System. Enterprise resource planning (ERP) systems are designed to record and share information across functional and geographical areas on a real-time basis.
Finance and Accounting Personnel. Determine whether the chief financial officer, controller, treasurer, internal auditor, managerial accountant, financial accountant, or tax accountant would perform
Planning and Control. Three young professionals recently started a firm that develops applications for smart phones. The first month was just completed, and the owners are in the process of comparing
Financial Versus Managerial Accounting. Julia is the loan officer at a local bank that lends money to Sports Outlet, a small sporting goods retail store. She requests several quarterly financial
Accounting Information at Sportswear Company. Refer to the dialogue between the president and accountant at Sportswear Company presented at the beginning of the chapter. Why can’t the president
How does a merchandising company income statement differ from a manufacturing company income statement?
Describe the inventory cost flow equation and how it applies to the three schedules shown in Figure 1.7.
What are the names and dollar amounts of the inventory accounts appearing on the balance sheet? What is the total amount of product costs recorded as an expense on the income statement for the year
When is the cost of goods sold account (often called cost of sales) used, and how is the dollar amount recorded in this account determined?
What are the three categories of product costs that flow through the work-in-process inventory account? Describe each one.
Describe the three inventory accounts used to record product costs.
Provide two examples of selling costs and two examples of general and administrative costs at PepsiCo.
Why are items such as the hull, engine, transmission, carpet, and seats classified as direct materials and items such as glue, paint, and screws classified as indirect materials?
How does the timing of recording expenses differ between product and period costs?
Why are the terms product costs and period costs used to describe manufacturing costs and non-manufacturing costs?
Describe the difference between direct materials and direct labor versus indirect materials and indirect labor.
Describe manufacturing costs and non-manufacturing costs. Provide examples of each.
Why do manufacturing companies use product costing systems to track costs throughout the production process?
What is an enterprise resource planning system?
Why is improving ethics a top priority for businesses, such as Home Depot and Hewlett-Packard?
Why would the company’s former employees improperly record information as described here?
Briefly summarize the Institute of Management Accountants (IMA) Statement of Ethical Professional Practice shown in Figure 1.2. What is the purpose of this statement?
Explain why ethical behavior is so important for finance and accounting personnel.
How do the treasurer’s responsibilities differ from those of the controller?
What is the controller’s primary responsibility?
Describe the planning and control functions performed by most managers?
What are nonfinancial measures of performance? Provide several examples.
The balance in Taylor Company’s raw materials inventory account was $110,000 at the beginning of September. Raw materials purchased during the month totaled $50,000. Taylor used $17,000 in direct
Brenner Company expects to incur $3,000,000 in manufacturing overhead costs this year. During the year, it expects to use 50,000 direct labor hours at a cost of $600,000 and 80,000 machine
Yamamoto, Inc., had the following activity for the year ended December 31.Required:Prepare an income statement for year ended December 31. Sales revenue $3,050,000 $ 575,000 $ 330,000 Selling
The balance in Preston Company’s finished goods inventory account was $650,000 at the beginning of March. Cost of goods manufactured for the month totaled $445,000, and cost of goods sold totaled
The balance in Sly Company’s raw materials inventory account was $45,000 at the beginning of April. Raw materials purchased during the month totaled $55,000. Sly used $48,000 in direct materials
Refer to the job cost information in Figure 2.10. Why is Custom Furniture Company comparing estimated product costs to actual product costs for each of the three jobs? Briefly summarize the results
Provide the account name commonly used by service companies for each of the following accounts used in a manufacturing environment.1. Raw materials inventory 2. Work-in-process inventory 3.
The balance in the work-in-process inventory account of Quest, Inc., was $900,000 at the beginning of May. Manufacturing costs for the month are as follows:Required:a. Prepare separate journal
The following information is for Rockville, Inc., for the year ended December 31, 2016.Of the total raw materials placed in production for the year, $72,000 was for indirect materials.Required:a.
The following financial information is for Caravelli Company. Of the total raw materials placed in production for the year, $36,000 was for indirect materials. The company had $3,795,000 in
The following financial information is for Leeward Company. (Note that the most current financial information is presented in the first column.)Of the total raw materials placed in production for the
The balance in Mesa Company’s raw materials inventory account was $45,000 at the beginning of April and $38,000 at the end of April. Raw materials purchased during the month totaled $55,000. Mesa
Home Depot€™s annual report appears as follows in summary form. (This information was obtained from the company€™s Web site, www.homedepot.com.Required:a. The financial
Boulder Products, Inc., had the following activity for the month of October.Required:Prepare an income statement for the month of October. Sales revenue Selling expenses General and administrative
The balance in Amber Company€™s work-in-process inventory account was $400,000 at the beginning of September and $320,000 at the end of September. Manufacturing costs for the month
The balance in Tahoma Company’s raw materials inventory account was $150,000 at the beginning of June and $135,000 at the end of June. Raw materials purchased during the month totaled $50,000.
The income statement from Ford€™s annual report appears as follows in summary form. (This information was obtained from the company€™s Web site,www.ford.com.)Required:a. The
Leighton, Inc., incurred costs for the following items.1. Janitorial services in the production facility 2. Personnel department
Burns Company incurred costs for the following items.1. Salary of chief financial officer2. Factory insurance3.
Which accountant (financial or managerial) would prepare each of the following reports:a. Income statement for the Gatorade division of PepsiCob. Balance sheet for Walmart prepared in accordance
Describe the characteristics of managerial accounting and financial accounting.

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