Financial and Managerial Accounting

Business

Quiz 16 :

Management Accounting: a Business Partner

Quiz 16 :

Management Accounting: a Business Partner

Question Type
search
arrow
Describe the three principles guiding the design of management accounting systems.
Free
Essay
Answer:

Answer:

a. Managerial accounting information is intended for use by managers of the business (insiders), whereas financial accounting information is distributed to outsiders as well as to managers. These outsiders include stockbrokers, creditors, potential investors, and the general public.
b. Managerial accounting information is intended to assist managers in planning and controlling both the short-run and long-run activities of the business. Financial accounting information is primarily intended to present the operating results and financial position of the business entity as an aid to resource allocation decisions made by outside investors. Financial accounting information is also used for income tax purposes.

Tags
Choose question tag
close menu
arrow
River Queen Corporation began operations early in the current year, building luxury boats. During the year, the company started and completed 40 boats at a cost of $80,000 per unit. Of these, 30 were sold for $ 130,000 each and 10 remain in finished goods inventory. In addition, the company had five partially completed units in its factory at year-end. Total costs for the year (summarized alphabetically ) were as follows: img Instructions Compute the following for the current year: a. Total manufacturing costs charged to work in process during the period. b. Cost of finished goods manufactured. c. Cost of goods sold. d. Gross profit on sales. e. Ending inventories of ( 1 ) work in process and ( 2 ) finished goods.
Free
Essay
Answer:

Answer:

a.
img b.
img c.
img d.
img e.
img

Tags
Choose question tag
close menu
arrow
Briefly explain what is meant by the term management accounting.
Free
Essay
Answer:

Answer:

Management Accounting is the design and use of accounting information systems inside the company to achieve the company's objectives. Management Accounting will assist managers for planning, decision making and controlling of all its business operations.

Tags
Choose question tag
close menu
arrow
Calculating Cost of Goods Manufactured Pfizer, Inc. , develops and manufactures various pharmaceutical products. Visit its home page at the following address: http://www.pfizer.com From the home page, access the most recent financial report by clicking on the investors' tab. Instructions a. What categories of inventory does Pfizer show in its inventories footnote under "Notes to Consolidated Financial Statements"? b. Using the income statement and inventory information from the footnote, calculate the cost of finished goods manufactured for the most recent year. c. What elements of manufacturing overhead can you identify using the annual report?
Essay
Answer:
Tags
Choose question tag
close menu
arrow
Listed below are eight technical accounting terms introduced or emphasized in this chapter: img Each of the following statements may (or may not) describe one of these technical terms. For each statement, indicate the accounting term described, or answer "None" if the statement does not correctly describe any of the terms. a. The preparation and use of accounting information designed to assist managers in planning and controlling the operations of a business. b. All manufacturing costs other than direct materials used and direct labor. c. Direct materials and direct labor used in manufacturing a product. d. A manufacturing cost that can be traced conveniently and directly to manufactured units of product. e. The account debited at the time that the Manufacturing Overhead account is credited. f. The amount transferred from the Work in Process Inventory account to the Finished Goods Inventory account. g. Costs that are debited directly to expense accounts when the costs are incurred.
Essay
Answer:
Tags
Choose question tag
close menu
arrow
The flow of manufacturing costs through the ledger accounts of Interior Safes, Inc., in the current year is illustrated below in summarized form: img Instructions Indicate the amounts requested below. Some amounts are shown in the T accounts above: others require short computations. (Show all computations.) a. Purchases of direct materials. b. The cost of direct materials used. c. Direct labor costs assigned to production. d. The year-end liability for direct wages payable. e. The overhead as a percentage of direct labor costs. f. Total manufacturing costs charged to the Work in Process Inventory account during the current year. g. The cost of finished goods manufactured. h. The year-end balance in the Work in Process Inventory account. i. The cost of goods sold. j. The total amount of inventory listed in the year-end balance sheet.
Essay
Answer:
Tags
Choose question tag
close menu
arrow
Briefly distinguish between management and financial accounting information in terms of ( a ) the intended users of the information and ( b ) the purpose of the information.
Essay
Answer:
Tags
Choose question tag
close menu
arrow
An Introduction to Product Costs Pinning, Inc., manufactures dowhats. The manufacturing costs incurred during its first year of operations are as follows: img During the year, 110 completed dowhats were manufactured, of which 90 were sold. (Assume that the amount of the ending inventory of finished goods and the cost of goods sold are determined using the average'per-unit cost of manufacturing a completed dowhat.) Instructions a. Compute each of the following and show all computations: 1. The average per-unit cost of manufacturing a completed dowhat during the current year. 2. The year-end balances of the following inventories: materials, work in progress, and finished goods. 3. The cost of goods sold during the year. b. For the current year, the costs of direct materials purchased, direct labor, and manufacturing overhead total $1,180,000. Is this the amount of manufacturing costs deducted from revenue in the current year? Explain fully.
Essay
Answer:
Tags
Choose question tag
close menu
arrow
Prescott Manufacturing operates several plants, each of which produces a different product. Early in the current year. John Walker was hired as the new manager of the Meadowbrooke Plant. At year-end, all the plant managers are asked to summarize the operations of their plants at a meeting of the company's board of directors. John Walker displayed the following information on a chart as he made his presentation: img Walker made the following statements to the board: "As you know, sales volume has remained constant for the Meadowbrooke Plant. Both this year and last, our sales amounted to 100,000 units. We have made real gains, however, in controlling our manufacturing costs. Through efficient plant operations, we have reduced our cost of finished goods manufactured by over $100,000. These economies are reflected in a reduction of the manufacturing cost per unit sold from $10.20 last year ($1,020,000 ÷ 100,000 units) to $9.09 in the current year ($909,000 ÷ 100,000 units)." Father Alan Carter is president of St. Mary's University and is a member of Prescott Manufacturing's board of directors. However, Father Carter has little background in the accounting practices of manufacturing companies, and he asks you for assistance in evaluating Walker's statements. Instructions a. As a preliminary step to your analysis, compute the following for the Meadowbrooke Plant in each of the two years: 1. Cost of goods sold. 2. Number of finished units manufactured. 3. Average cost per unit manufactured. 4. Average cost per unit sold. b. Evaluate the statements made by Walker. Comment specifically on Walker's computation of the manufacturing cost of units sold and on whether it appears that the reduction in the cost of finished goods sold was in fact achieved through more efficient operations.
Essay
Answer:
Tags
Choose question tag
close menu
arrow
Indicate whether each of the following should be considered a product cost or a period cost. If you identify the item as a product cost, also indicate whether it is a direct or an indirect cost. For example, the answer to item 0 is "indirect product cost." Begin with item a. 0. Property taxes on factory building. a. Cost of disposal of hazardous waste materials to a chemical plant. b. Amounts paid by a mobile home manufacturer to a subcontractor who installs plumbing in each mobile home. c. Depreciation on sales showroom fixtures. d. Salaries of security guards in an administrative office building. e. Salaries of factory security guards. f. Salaries of office workers in the credit department. g. Depreciation on the raw materials warehouse. h. Income taxes on a profitable manufacturing company.
Essay
Answer:
Tags
Choose question tag
close menu
arrow
William Nelson, the chief accountant of West Texas Guitar Company, was injured in an automobile accident shortly before the end of the company's first year of operations. At year-end, a clerk with a very limited understanding of accounting prepared the following income statement, which is unsatisfactory in several respects: img You are asked to help management prepare a corrected income statement for the first year of operations. Management informs you that 60 percent of the rent, insurance, and utilities applies to factory operations, and that the remaining 40 percent should be classified as period expenses. Also, the correct ending inventories are as follows: img As this is the first year of operations, there were no beginning inventories. Instructions a. Identify the shortcomings and errors in the above income statement. Based on the shortcomings you have identified. explain whether you would expect the company's actual net income for the first year of operations to be higher or lower than the amount shown. b. Prepare schedules to determine: 1. The cost of direct materials used. 2. Total manufacturing overhead. c. Prepare a schedule of cost of finished goods manufactured during the year. (Use the amounts computed in part b as the costs of direct materials used and manufacturing overhead.) d. Prepare a corrected income statement for the year, using a multiple-step format. Assume that income tax expense amounts to 30 percent of income before income taxes.
Essay
Answer:
Tags
Choose question tag
close menu
arrow
Hula's Heavyweights, Inc., is a company that manufactures forklifts. During the year, Hula's purchased $1,450,000 of direct materials and placed $1,525,000 worth of direct materials into production. Hula's beginning balance in the Materials Inventory account was $320,000. What is the ending balance in Hula's Materials Inventory account?
Essay
Answer:
Tags
Choose question tag
close menu
arrow
The flow of manufacturing costs through the ledger accounts of Superior Locks, Inc., in the current year is illustrated below in summarized form. img Instructions Indicate the amounts requested below. Some amounts are shown in the illustrated T accounts; others require short computations. (Show all computations.) a. Purchases of direct materials. b. The cost of direct materials used. c. Direct labor costs assigned to production. d. The year-end liability for direct wages payable. e. Total manufacturing costs charged to the Work in Process Inventory account during the current year. f. The cost of finished goods manufactured. g. The year-end balance in the Work in Process Inventory account. h. The cost of goods sold. i. The total amount of inventory listed in the year-end balance sheet.
Essay
Answer:
Tags
Choose question tag
close menu
arrow
A company that assembles trucks produces 60 trucks during the current year and incurs $3 million of material, labor, and overhead costs. Fifty-three trucks were sold during the year and each is allocated the same amount of costs. How much of the $3 million assembly costs should appear on the company's income statement for the current year?
Essay
Answer:
Tags
Choose question tag
close menu
arrow
Aqua-Marine manufactures fiberglass fishing boats. The manufacturing costs incurred during its first year of operations are shown as follows: img During the year, 112 completed boats were manufactured, of which 100 were sold. (Assume that the amount of the ending inventory of finished goods and the cost of goods sold are determined using the average per-unit cost of manufacturing a completed boat.) Instructions a. Compute each of the following and show all computations: 1. The average per-unit cost of manufacturing a completed boat during the current year. 2. The year-end balances of the inventories of materials, work in process, and finished goods. 3. The cost of goods sold during the year. b. For the current year, the costs of direct materials purchased, direct labor assigned to production, and actual manufacturing overhead total $775,000. Is this the amount of manufacturing costs deducted from revenue in the current year? Explain fully.
Essay
Answer:
Tags
Choose question tag
close menu
arrow
During the year, Coronado Boat Yard has incurred manufacturing costs of $420,000 in building three large sailboats. At year-end, each boat is about 70 percent complete. How much of these manufacturing costs should be recognized as expense in Coronado Boat Yard's income statement for the current year? Explain.
Essay
Answer:
Tags
Choose question tag
close menu
arrow
Code of Conduct at Coca-Cola Many companies have established business codes of conduct that outline procedures for employees, suppliers, and customers to alert management about suspected accounting, internal control, or auditing problems. As discussed in this chapter, one potential violation of GAAP would be to capitalize period costs, inflating the value of inventory and understating the expenses on the income statement for the period. Coca-Cola Company provides a "Code of Business Conduct" at http://www.thecoca-colacompany.com/investors/code-of-business-conductthat identifies the code and what constitutes a violation. Also provided are examples of what employees and others can do if they suspect ethics or fraud violations at Coca-Cola. Go to the above website and find the following information: a. Identify the accounting-related components of the code. b. Review the section titled "Administration of the Code." Identify the steps that an employee would take if he or she wanted to report capitalization of period costs by a bottling plant manager. c. Identify the types of disciplinary actions the company can impose on employees who are found to be in violation of the company's code of conduct. d. Identify how the violation might be recorded and who would be notified about the violation. Internet sites are time and date sensitive. It is the purpose of these exercises to have you explore the Internet. You may need to use the Yahoo! search engine http://www.yahoo.com (or another favourite search engine) to find a company's current web address.
Essay
Answer:
Tags
Choose question tag
close menu
arrow
Into which of the three elements of manufacturing cost would each of the following be classified? a. Tubing used in manufacturing bicycles. b. Wages paid by an automobile manufacturer to employees who test-drive completed automobiles. c. Property taxes on machinery. d. Gold bullion used by a jewelry manufacturer. e. Wages of assembly-line workers who package frozen food. f. Salary of plant superintendent. g. Electricity used in factory operations. h. Salary of a nurse in a factory first-aid station.
Essay
Answer:
Tags
Choose question tag
close menu
arrow
Road Ranger Corporation began operations early in the current year, building luxury motor homes. During the year, the company started and completed 50 motor homes at a cost of $60,000 per unit. Of these, 48 were sold for $95,000 each and two remain in finished goods inventory. In addition, the company had six partially completed units in its factory at year-end. Total costs for the year (summarized alphabetically) were as follows: img Instructions Compute the following for the current year: a. Total manufacturing costs charged to work in process during the period. b. Cost of finished goods manufactured. c. Cost of goods sold. d. Gross profit on sales. e. Ending inventories of ( 1 ) work in process and ( 2 ) finished goods.
Essay
Answer:
Tags
Choose question tag
close menu
arrow
Direct Materials Used During the current year, the cost of direct materials purchased by a manufacturing firm was $325,000, and the direct materials inventory increased by $65,000. What was the cost of direct materials used during the year?
Essay
Answer:
Tags
Choose question tag
close menu
Showing 1 - 20 of 60