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Ch 1 2
What are the basic differences in orientation between financial and managerial Accounting ? Managerial accounting is concerned with providing information to managers for use within the organization. Financial accounting is concerned with providing information to stockholders, creditors, and others outside of the organization. What are the major differences between financial and managerial accounting?
Subject 6.Comparison of Financial and Managerial Accounting Financial Accounting 1. Time focus 3. Precision versus timeliness 5. Users 2. GAAP 7. Verifiability versus relevance 4. 1-2 Managerial Accounting Managers who plan for and control an organization Future emphasis Emphasis on relevance for planning and control Emphasis on timeliness Focuses on segments of an organization Need not follow GAAP or any prescribed format Not Mandatory . Requirement External persons who make financial decisions Historical perspective Emphasis on verifiability Emphasis on precision Primary focus is on the whole organization Must follow GAAP and prescribed formats Mandatory for external reports Exh.
providing services and assistance to other parts of the organization.Review Ch.1 Distinguish between line and staff positions in an organization. A line position is directly related to the achievement of the basic objectives of the organization. it is supportive. rather. A staff position is not directly related to the achievement of those objectives. .
Review Ch. (3) throughput time. (2) space requirements. . and (4) defects.1 What are the major benefits of JIT System? The main benefits of a successful JIT system are reductions in: (1) funds tied up in inventories.
Benefits of a JIT System Reduced inventory costs Freed-up funds Higher quality products Greater customer satisfaction More rapid response to customer orders Increased throughput .
1 Why is Process reengineering a more radical approach to improvement than total quality management? TQM generally approaches improvement in a series of small steps that are planned and implemented by teams of front-line workers. .Review Ch. Process Reengineering involves completely redesigning business processes from the ground up—often with the use of outside consultants.
30 Exercise 1-1 .1 See your book P.Review Ch.
Controller 11.Decentralization 7.Staff 6. Financial accounting 9.Directing and motivating 3.Chief Financial Officer .Managerial accounting.Budgets 4.Precision.Planning 5.Feedback 10. Line 2.Performance report 12. Exercise 1-1 1. Nonmonetary data 8.
and manufacturing overhead.Review Ch.2 What are the three major elements of product costs in a manufacturing company ? The three major elements of product costs in a manufacturing company are direct materials. direct labor. Distinguish between the following : Direct material Indirect material Direct labor Indirect labor Manufacturing overhead .
e. materials handlers. Indirect labor includes the labor costs of janitors. c. supervisors. Indirect materials are ordinarily classified as manufacturing overhead. Direct labor is also called “touch labor. Direct materials are an integral part of a finished product and their costs can be conveniently traced to it. They may be an integral part of a finished product but their costs can be traced to the product only at great cost or inconvenience. Direct labor includes those labor costs that can be easily traced to particular products. Manufacturing overhead includes all manufacturing costs except direct materials and direct labor.Review Ch.2 a. . b. and other factory workers that cannot be conveniently traced to particular products.” d. Indirect materials are generally small items of material such as glue and nails. These labor costs are incurred to support production. but the workers involved do not directly work on the product.
Review Ch. and manufacturing overhead. these costs consist of direct materials. A period cost is a cost that is taken directly to the income statement as an expense in the period in which it is incurred .2 Explain the differences between a product cost and a period cost A product cost is any cost involved in purchasing or manufacturing goods. In the case of manufactured goods. direct labor.
Review Ch.2 What is meant by the term cost behavior ? Cost behavior refers to how a cost will react or respond to changes in the level of activity. .
opportunity cost. A differential cost is a cost that differs between alternatives in a decision.2 Define the following terms : differential cost. A sunk cost is a cost that has already been incurred and cannot be altered by any decision taken now or in the future.Review Ch. An opportunity cost is the potential benefit that is given up when one alternative is selected over another. . and sunk cost.
Data for the most recent month's operations appear below : Beginning raw material Inventory $60000 Purchase for raw material $690000 Ending raw material Inventory $45000 Direct Labor $135000 Manufacturing overhead $370000 Beginning work in process Inventory $120000 Ending work in process Inventory $130000 Required: Prepare a schedule of cost of goods Manufactured for the company for the month .2 Lompac products manufactures a variety of products in its factory.Review Ch.
........ $ 60...................000 $1. Total manufacturing costs .....................000 $ 705.........000 750.......... Cost of goods manufactured ...200..........000 370.. Deduct: Ending raw materials inventory .....Review Ch........000 45....000 1....000 135.2 Lompac Products Schedule of Cost of Goods Manufactured Direct materials: Beginning raw materials inventory .... Add: Purchases of raw materials ..000 130..000 1.....000 690......... Deduct: Ending work in process inventory...................... Manufacturing overhead ...000 .. Add: Beginning work in process inventory ....330..000 120....... Raw materials used in production . Direct labor ....................210...... Raw materials available for use...................
000 28.000 92.000 540.000 186. unless otherwise noted: Work-in-process inventory (January 1) Work-in-process inventory (March 31) Finished goods inventory (January 1) Finished goods inventory (March 31) Direct materials used Indirect materials used Direct manufacturing labor Indirect manufacturing labor Property taxes on manufacturing plant building Salespersons' company vehicle costs Depreciation of manufacturing equipment Depreciation of office equipment Miscellaneous plant overhead Plant utilities General office expenses Marketing distribution costs $ 140.000 123.000 .000 264.400 305.000 378.000 84.800 12.600 135.400 171.000 480.400 30.000 510.Messinger Manufacturing Company had the following account balances for the quarter ending March 31.
b. .Required: a. Prepare a cost of goods sold schedule for the quarter. Prepare a cost of goods manufactured schedule for the quarter.
200 Total Manufacturing costs incurred $1.200 .000 Manufacturing overhead Depreciation of manufacturing equipment $264.000 Miscellaneous plant overhead 135.800 Total Manufacturing overhead 790.000 Indirect materials 84.000 Plant utilities 92. Messinger Manufacturing Company Cost of Goods Manufactured Schedule for quarter ending March 31 Direct materials used $ 378.Answer: a.000 Indirect manufacturing labor 186.648.400 Property taxes on building 28.000 Direct manufacturing labor 480.
648.400 $1.600 171.Work-in-process Statement Beginning work-in-process inventory Add Total Manufacturing costs incurred = Total work-in-process for the period Less ending work-in-process inventory = Cost of goods manufactured a.200 $1.600 . 140.788.000 $1.617.
617.Finished goods Statement b.647.600 2. Messinger Manufacturing Company Cost of Goods Sold Schedule For the quarter ending March 31 Beginning finished goods inventory Cost of goods manufactured Cost of goods available for sale Ending finished goods inventory $ 540.000 1.600 (510.157.000) Cost of goods sold $1.600 .
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