Assignment $1$ Total Marks $29$ marks worth $8\%$ of your total grade

Question $1(7$ Marks $-1$ mark for each difference$)$

List seven key differences between Managerial Accounting and Financial Accounting.$($Note for each point you need to indicate what happens under Managerial accounting and what happens under Financial accounting for the identified difference$)$

Question $2(4$ marks $-1$ mark for each point$)$

List four major potential benefits of successfully implementing a just$-$in$-$time $($JIT$)$ system in a manufacturing company.$$

Question $3(1$ Mark$)$

A manufacturing company has implemented just in time $($JIT$)$ into their process. JIT is part of:$$

A$.$the lean business model.

B$.$process re$-$engineering.

C$.$total quality management

D$.$the theory of constraints.

Question $4(1$ Mark$)$

$51.$Managerial accounting is regulated by:$$

A$.$GAAP$.$

B$.$IFRS$.$

C$.$ASPE$.$

D$.$no prescribed standards are followed.

Question $5(1$ Mark$)$

Corporate governance:$$

A$.$is a department within Canada Revenue with a mandate to ensure all corporations file annual tax returns.

B$.$if effective, should enhance stakeholders' confidence that the organization is being managed in their best interests.

C$.$ensures the personal interests of top management are fully achieved.

D$.$is only important to non$-$publicly traded companies.

Question $6(10$ Marks $-0\mathrm{.}5$ mark for each X$)$

Laco Company acquired its factory building about $20$ years ago. For several years, the company has rented out a small, unused part of the building. The renter's lease will expire soon. Rather than renewing the lease, Laco Company is considering using the space itself to manufacture a new product. Under this option, the unused space will continue to be depreciated on a straight$-$line basis, as in past years.

Direct materials and direct labour cost for the new product would be $$50$ per unit. In order to have a place to store finished units of the new product, the company would have to rent a small warehouse nearby. The rental cost would be $$2,000$ per month. It would cost the company an additional $$4,000$ each month to advertise the new product. A new production supervisor would be hired to oversee production of the new product who would be paid $$3,000$ per month. The company would pay a sales commission of $$10$ for each unit of product that is sold.

Required:

Complete the chart below by placing an $"$X$"$ under each column heading that helps to identify the costs listed to the left. There can be $"$X$\text{'}$s$"$ placed under more than one heading for a single cost. For example, a cost might be a product cost, an opportunity cost, and a sunk cost; there would be an $"$X$"$ placed under each of these headings on the answer sheet opposite the cost.

Opportunity Cost Sunk Cost Variable Cost Fixed Cost Product Cost Selling & Admin. Cost Differential Cost$*$

Rent on unused factory space

Depreciation on the factory space

Direct material and direct labour

Rental cost of the small warehouse

Advertising cost

Production supervisor's salary

Sales commissions

Question $7(5$ marks$)$

Part A

Tech Computer manufactures tablets in its plant located in Toronto and then ships the computers directly to distributors and retailers. The company's accountant has enlisted you to classify the following company's expenses:

Units of production depreciation on the factory equipment.$$

A$.$Fixed product cost.

B$.$Variable product cost.

C$.$Fixed period cost.

D$.$Variable period cost.

Part B

The delivery charges incurred when shipping the tablets to distributors and retailers.$$

A$.$Fixed product cost.

B$.$Variable product cost.

C$.$Fixed period cost.

D$.$Variable period cost.

Part C

The delivery charges incurred when shipping the tablet drives to be installed in the tablet.$$

A$.$Fixed product cost.

B$.$Variable product cost.

C$.$Fixed period cost.

D$.$Variable period cost.

Part D

The drive installed in each tablet.$$

A$.$Fixed product cost.

B$.$Variable product cost.

C$.$Fixed period cost.

D$.$Variable period cost.

Part E

Wages of factory supervisor.$$

A$.$Fixed product cost.

B$.$Variable product cost.

C$.$Fixed period cost.

D$.$Variable period cost.

Part F