Question 1:

Explain the key differences between financial accounting and managerial accounting.

Question 2:

Following are a number of costs that are incurred in a variety of organizations.

Cost Item	Cost Behaviour
The costs of advertising a U2 rock concert in Vancouver.
Depreciation on the Hard Rock Caf building in Ottawa.
The electrical costs of running a roller coaster at West Edmonton Mall.
Property taxes on your local cinema.
The costs of synthetic materials used to make Reebok running shoes.
The costs of shipping Apple iPods to retail stores.
The cost of leasing a CT-scan diagnostic machine at the American Hospital in Paris.

Required:

Classify each cost as variable or fixed with respect to the number of units sold or services provided by the organization.

Question 3:

Kelowna Plumbing Supplies shows the following data related to its December 31, 2020 fiscal year:

Raw materials inventory, January 1, 2020	$5,000
Raw materials inventory, December 31, 2020	8,000
Work in process inventory, January 1, 2020	23,000
Work in process inventory, December 31, 2020	21,000
Finished goods inventory, January 1, 2020	16,000
Finished goods inventory, December 31, 2020	10,000
Advertising	56,000
Factory supervisor's salary	42,000
Company president's salary	85,000
Property taxes - factory	25,000
Depreciation - factory	35,000
Factory maintenance	7,000
Sales commissions	32,000
Depreciation - office	2,000
Utilities expense - factory	23,000
Utilities expense - office	11000
Purchases of raw materials	148,000
Direct labour	160,000

Required:

Based on the information above, prepare a Schedule of Cost of Goods Manufactured.

Question 4:

Outdoor Supplies manufactures gear for hunting and camping. The company shows the following data related to its December 31, 2020 fiscal year end:

Raw materials inventory, January 1, 2020	$14,000
Raw materials inventory, December 31, 2020	17,000
Work in process inventory, January 1, 2020	31,000
Work in process inventory, December 31, 2020	20,000
Finished goods inventory, January 1, 2020	84,000
Finished goods inventory, December 31, 2020	68,000
Direct labour	275,000
Factory supervisor's wages	64,000
Company president's salary	120,000
Purchases of raw materials	425,000
Depreciation (60% factory, 40% office)	240,000
Property taxes (80% factory, 20% office)	20,000
Sales commissions	100,000
Repairs and maintenance (100% relate to the factory)	15,000
Utilities expense (90% factory, 10% office)	30,000
Sales revenue	2,050,000
Advertising	215,000

Required:

Based on the information above:

1. Prepare a schedule of cost of goods manufactured.
2. Prepare a schedule of cost of goods sold.
3. Prepare an income statement (assuming a tax rate of 20%).

Question 5:

Classify the following costs as either product (inventoriable) costs or period (non-inventoriable) costs in a manufacturing company:

	Costs	Product/Period
1.	Depreciation on salespeoples cars.
2.	Rent on equipment used in the factory.
3.	Lubricants used for maintenance of factory equipment.
4.	Salaries of finished goods warehouse personnel.
5.	Soap and paper towels used by factory workers.
6.	Sales supervisors salaries.
7.	Property taxes on the factory building.
8.	Materials used in boxing units of finished product for shipment overseas. (Units are not normally boxed.)
9.	Advertising outlays.
10.	Workers compensation insurance on factory employees.
11.	Depreciation on chairs and tables in the administrative boardroom.
12.	Salary of the production quality supervisor for the company.
13.	Depreciation on a Learjet used by the companys executives.
14.	Rent on rooms at a Florida resort for a manufacturing conference.
15.	Attractively designed box for packaging breakfast cereal.