Question: Define and describe two measures to assess

> Which of these statements is true regarding product and period costs? 1. Factory maintenance is a product cost and sales commission is a period cost. 2. Sales commission is a product cost and depreciation on factory equipment is a product cost. 3. Sales

> Identify whether each description most likely applies to managerial or financial accounting. 1. _______ Its primary users are company managers. 2. _______ Its information is often available only after an audit is complete. 3. _______ Its primary focus is

> Managerial accounting (choose one) 1. Is directed at reporting aggregate data on the company as a whole. 2. Provides information that is widely available to all interested parties. 3. Must follow generally accepted accounting principles. 4. Provides info

> Refer to QS 1-12 and compute raw materials inventory turnover and the number of days’ sales in raw materials inventory.

> Prepare the 2013 manufacturing statement for Briton Company using the following information. Direct materials . . . . . . . . . . . . . . . . . . . . . $190,500 Direct labor . . . . . . . . . . . . . . . . . . . . . . . . . 63,150 Factory overhead costs

> Canon manufactures digital cameras and must compete on lean manufacturing concepts. Match each of the following activities that it engages in with the lean manufacturing concept it strives to achieve. (Some activities might relate to more than one lean m

> The following calendar year-end information is taken from the December 31, 2013, adjusted trial balance and other records of Elegant Furniture. Required1. Prepare the company’s 2013 manufacturing statement. 2. Prepare the company&acirc

> Shown here are annual financial data at December 31, 2013, taken from two different companies. Required1. Compute the cost of goods sold section of the income statement at December 31, 2013, for each company. Include the proper title and format in the s

> Sharp Edges makes specialty skates for the ice skating circuit. On December 31, 2012, the company had (a) 1,500 skates in finished goods inventory and (b) 2,500 blades at a cost of $20 each in raw materials inventory. During 2013, Sharp Edges purchased 4

> The following calendar-year information is taken from the December 31, 2013, adjusted trialbalance and other records of Dahlia Company. Required1. Each team member is to be responsible for computing one of the following amounts. You are not to duplicat

> Assume that you must make a presentation to a client explaining the difference between prime and conversion costs. The client makes and sells 200,000 cookies per week. The client tells you that her sales staff also would like a clarification regarding pr

> Listed here are the total costs associated with the 2013 production of 15,000 Blu-ray Discs (BDs) manufactured by Nextgen. The BDs sell for $18 each. Required1. Classify each cost and its amount as (a) either variable or fixed and (b) either product or

> Refer to Decision Maker, Purchase Manager, in this chapter. Assume that you are the motorcycle manufacturer’s managerial accountant. The purchasing manager asks you about preparing an estimate of the related costs for buying motorcycle seats from supplie

> This chapter described the purpose of managerial accounting in the context of the current business environment. Review the home electronics section of your local newspaper; the Sunday paper is often best. Review advertisements of home electronics and ide

> Many fast-food restaurants compete on lean business concepts. Match each of the following activities at a fast-food restaurant with the lean business concept it strives to achieve. Some activities might relate to more than one lean business concept. ____

> The following calendar year-end information is taken from the December 31, 2013, adjusted trial balance and other records of DeLeon Company. Required1. Prepare the company’s 2013 manufacturing statement. 2. Prepare the companyâ&

> Shown here are annual financial data at December 31, 2013, taken from two different companies. Required1. Compute the cost of goods sold section of the income statement at December 31, 2013, for each company. Include the proper title and format in the s

> Notaro’s Boot Company makes specialty boots for the rodeo circuit. On December 31, 2012, the company had (a) 300 pairs of boots in finished goods inventory and (b) 1,200 heels at a cost of $8 each in raw materials inventory. During 2013, the company purc

> Assume that you must make a presentation to the marketing staff explaining the difference between product and period costs. Your supervisor tells you the marketing staff would also like clarification regarding prime and conversion costs and an explanatio

> Listed here are the total costs associated with the 2013 production of 1,000 drum sets manufactured by DrumBeat. The drum sets sell for $500 each. Required1. Classify each cost and its amount as (a) either variable or fixed and (b) either product or per

> Managerial accounting professionals follow a code of ethics. As a member of the Instituteof Management Accountants, the managerial accountant must comply with Standards of EthicalConduct. Required1. Identify, print, and read the Statement of Ethical

> Refer to Decision Maker, Purchase Manager, in this chapter. Assume that you are the motorcycle manufacturer’s managerial accountant. The purchasing manager asks you about preparing an estimate of the related costs for buying motorcycle seats from supplie

> This chapter explained the purpose of managerial accounting in the context of the current business environment. Review the automobile section of your local newspaper; the Sunday paper is often best. Review advertisements of sport-utility vehicles and ide

> Following are three separate events affecting the managerial accounting systems for different companies. Match the management concept(s) that the company is likely to adopt for the event identified. There is some overlap in the meaning of customer orient

> Complete the following statements by filling in the blanks.1. _______ _______ usually covers a period of one year. 2. _______ is the process of monitoring planning decisions and evaluating an organization’s activities and employees. 3. _______ is the pr

> Listed below are costs of providing an airline service. Classify each cost as (a) either variable or fixed and (b) as either direct or indirect. Consider the cost object to be a flight. Cost by Behavior Cost by Traceability Cost Variable Fixed Direct

> Customer orientation means that a company’s managers and employees respond to customers’ changing wants and needs. A manufacturer of metal parts has created a customer satisfaction survey that it asks each of its customers to complete. The survey asks ab

> Use the information in Exercise 1-12 to prepare an income statement for Shanta Company (a man ufacturer). Assume that its cost of goods manufactured is $534,390.

> Given the following selected account balances of Shanta Company, prepare its manufacturing statement for the year ended on December 31, 2013. Include a listing of the individual overhead account balances in this statement. Sales $1,250,000 Raw materi

> For each of the following accounts for a manufacturing company, place a ✔ in the appropriate column indicating that it appears on the balance sheet, the income statement, the manufacturing statement, and/or a detailed listing of factory

> The following chart shows how costs flow through a business as a product is manufactured. Some boxes in the flowchart show cost amounts. Compute the cost amounts for the boxes that contain question marks. Materials Activity Raw materials purchases $5

> Distinguish between direct labor and indirect labor.

> Compute cost of goods sold for each of these two companies for the year ended December 31, 2013. File Edit View Insert Format Tools Data Window Help S5 Halvetica loman 254% Log Homes Manufacturing 1 Viking Retail 2 3 Beginning inventory 4 Merchandise

> Using the following data, compute (1) the cost of goods manufactured (2) the cost of goods sold for both Garcia Company and Culpepper Company Culpepper Company Company Garcia Beginning finished goods inventory Beginning goods in process inventory B

> Current assets for two different companies at calendar year-end 2013 are listed here. One is a manufacturer, Salomon Skis Mfg., and the other, Sun Fresh Foods, is a grocery distribution company. (1) Identify which set of numbers relates to the manufactu

> Georgia Pacific, a manufacturer, incurs the following costs. (1) Classify each cost as either a product or a period cost. If a product cost, identify it as direct materials, direct labor, or factory overhead, and then as a prime and/or conversion cost.

> Listed here are product costs for the production of soccer balls. (1) Classify each cost (a) as either variable or fixed and (b) as either direct or indirect. (2) What pattern do you see regarding the relation between costs classified by behavior and co

> (1) Identify each of the five cost classifications discussed in the chapter. (2) List two purposes of identifying these separate cost classifications.

> Both managerial accounting and financial accounting provide useful information to decision makers. Indicate in the following chart the most likely source of information for each business decision (a decision can require major input from both sources, in

> In the following chart, compare financial accounting and managerial accounting by describing how each differs for the items listed. Be specific in your responses. Financial Accounting Managerial Accounting I. Time dimension 2. Users and decision make

> Besides inventories, what other assets often appear on manufacturers’ balance sheets but not on merchandisers’ balance sheets?

> Why does managerial accounting often involve working with numerous predictions and estimates?

> Assume that you are the managerial accountant at Infostore, a manufacturer of hard drives,CDs, and DVDs. Its reporting year-end is December 31. The chief financial officer is concerned about having enough cash to pay the expected income tax bill because

> Explain why product costs are capitalized but period costs are expensed in the current accounting period.

> Explain why knowledge of cost behavior is useful in product performance evaluation.

> Should we evaluate a manager’s performance on the basis of controllable or noncontrollable costs? Why?

> What product cost is listed as both a prime cost and a conversion cost?

> Access Dell’s annual report (10-K) for the fiscal year ended February 3, 2012, at the SEC’s EDGAR database (SEC.gov) or its Website (Dell.com). From its financial statement notes, identify the titles and amounts of its inventory components.

> Can management of a company such as Polaris use cycle time and cycle efficiency as useful measures of performance? Explain.

> Describe the relations among the income statement, the manufacturing statement, and a detailed listing of factory overhead costs.

> Prepare a proper title for the annual “manufacturing statement” of Arctic Cat. Does the date match the balance sheet or income statement? Why?

> List the four components of a manufacturing statement and provide specific examples of each for Polaris.

> Both Polaris and Arctic Cat provide warranties on the products they sell. Accurate estimatesof these future warranty claims are important. Access the annual report or 10-K for both Polaris (from Appendix A) and Arctic Cat. The Polaris report is for the

> List several examples of factory overhead.

> What are the three categories of manufacturing costs?

> Manufacturing activities of a company are described in the _______. This statement summarizes the types and amounts of costs incurred in its manufacturing _______.

> Why does a manufacturing company require three different inventory categories?

> Distinguish between direct material and indirect material.

> How do an income statement and a balance sheet for a manufacturing company and a merchandising company differ?

> Distinguish between (a) factory overhead and (b) selling and administrative overhead.

> Refer to this chapter’s Global View. Porsche AG is the manufacturer of the Porsche automobile line. Does Porsche produce in jobs or in job lots? Explain.

> An advertising agency is estimating costs for advertising a music festival. The job will require 200 direct labor hours at a cost of $50 per hour. Overhead costs are applied at a rate of $65 per direct labor hour. What is the total estimated cost for thi

> At the beginning of a period a company predicts total direct materials costs of $900,000 and total overhead costs of $1,170,000. If the company uses direct materials costs as its activity base to allocate overhead, what is the predetermined overhead rate

> A company allocates overhead at a rate of 150% of direct labor cost. Actual overhead cost for the current period is $950,000, and direct labor cost is $600,000. Prepare the entry to close over- or underapplied overhead to cost of goods sold.

> Explain how business activities and inventories for a manufacturing company, a merchandising company, and a service company differ.

> A company’s Factory Overhead T-account shows total debts of $624,000 and total credits of $646,000 at the end of a period. Prepare the journal entry to close the balance in the Factory Overhead account to Cost of Goods Sold.

> A company incurred the following manufacturing costs this period: direct labor, $468,000; direct materials, $354,000; and factory overhead, $117,000. Compute its overhead cost as a percent of (1) direct labor and (2) direct materials. Express your answer

> During the current month, a company that uses a job order cost accounting system incurred a monthly factory payroll of $175,000, paid in cash. Of this amount, $44,000 is classified as indirect labor and the remainder as direct for the production of Job 6

> During the current month, a company that uses a job order cost accounting system incurred a monthly factory payroll of $180,000, paid in cash. Of this amount, $40,000 is classified as indirect labor and the remainder as direct. Prepare entries to record

> During the current month, a company that uses a job order cost accounting system purchases $50,000 in raw materials for cash. It then uses $12,000 of raw materials indirectly as factory supplies and uses $32,000 of raw materials as direct materials. Prep

> Clemens Cars’ job cost sheet for job A40 shows that the cost to add security features to a car was $10,500. The car was delivered to the customer, who paid $14,900 in cash for the added features. What journal entries should Clemens record for the complet

> List the three types of costs that are typically recorded on a job cost sheet. How can managers use job cost sheets?

> Determine which products are most likely to be manufactured as a job and which as a job lot. 1. Hats imprinted with company logo. 2. Little League trophies. 3. A hand-crafted table. 4. A 90-foot motor yacht. 5. Wedding dresses for a chain of stores. 6

> Record the journal entry to close over- or underapplied factory overhead to Cost of Goods Sold for each of the independent cases below. Marsh Concert Ellis Home Promotions Builders Actual indirect materials costs $22,000 $ 12,500 Actual indirect labo

> Refer to information in Exercise 2-7. Prepare the journal entry to allocate (close) overapplied orunderapplied overhead to Cost of Goods Sold.

> Identify the usual changes that a company must make when it adopts a customer orientation.

> Use information in Exercise 2-7 to prepare journal entries for the following events for the month of May. 1. Factory overhead excluding indirect materials and indirect labor (record credit to Other Accounts). 2. Application of overhead to goods in proces

> Use information in Exercise 2-7 to prepare journal entries for the following events for the month of May. 1. Factory payroll costs in cash. 2. Direct labor usage. 3. Indirect labor usage.

> Use information in Exercise 2-7 to prepare journal entries for the following events for the month of May. 1. Raw materials purchases for cash. 2. Direct materials usage. 3. Indirect materials usage.

> Lorenzo Company uses a job order cost accounting system that charges overhead to jobs on the basis of direct material cost. At year-end, the Goods in Process Inventory account shows the following. 1. Determine the overhead rate used (based on direct ma

> In December 2012, Shire Computer’s management establishes the year 2013 predetermined overhead rate based on direct labor cost. The information used in setting this rate includes estimates that the company will incur $747,500 of overhea

> The left column lists the titles of documents and accounts used in job order cost accounting. The right column presents short descriptions of the purposes of the documents. Match each document in the left column to its numbered description in the right c

> The following information is from the materials requisitions and time tickets for Job 9-1005 completed by Great Bay Boats. The requisitions are identified by code numbers starting with the letter Q and the time tickets start with W. At the start of the y

> Match the terms below with their definitions. 1. Cost accounting system 2. Target cost 3. General accounting system 4. Job 5. Job order production 6. Job lot a. Production of products in response to customer orders. b. A system that records manufacturing

> A recent balance sheet for Porsche AG shows beginning raw materials inventory of €83 million and ending raw materials inventory of €85 million. Assume the company purchased raw materials (on account) for €3,108 million during the year. (1) Prepare journa

> Hansel Corporation has requested bids from several architects to design its new corporate headquarters. Frey Architects is one of the firms bidding on the job. Frey estimates that the job will require the following direct labor. Frey applies overhead t

> Distinguish between managerial and financial accounting on a. Users and decision makers. b. Purpose of information. c. Flexibility of practice. d. Time dimension. e. Focus of information. f. Nature of information.

> Describe the managerial accountant’s role in business planning, control, and decision making.

> Referring to the citation only, determine which court issued these decisions. a. 716 F.2d 693 (CA–9, 1983). b. 92 T.C. 400 (1998). c. 70 U.S. 224 (1935). d. 3 B.T.A. 1042 (1926). e. T.C.Memo. 1957–169. f. 50 AFTR2d 92–6000 (Ct. Cl., 1992). g. Ltr.Rul. 90

> What is the difference between the Federal income tax on individuals and that imposed on corporations?

> Is there an automatic right to appeal to the U.S. Supreme Court? If so, what is the process?

> Elijah and Anastasia are husband and wife who have five married children and nine minor grandchildren. For 2017, what is the maximum amount they can give to their family (including the sons- and daughters-in-law) without using any of their unified transf

> In the citation Schuster’s Express, Inc., 66 T.C. 588 (1976), aff’d 562 F.2d 39 (CA–2, 1977), nonacq., to what do the 66, 39, and nonacq. refer?

> Address the following issues: a. What is the purpose of the unified transfer tax credit? b. Is the same amount available for both the Federal gift tax and the estate tax? Explain. c. Does the use of the credit for a gift affect the amount of credit avail

> Marvin is the executor and sole heir of his aunt’s estate. The estate includes her furnished home, which Marvin is considering converting to rental property to generate additional cash flow. What are some of the tax problems Marvin may confront?

> In assessing the validity of a prior court decision, discuss the significance of the following on the taxpayer’s issue: a. The decision was rendered by the U.S. District Court of Wyoming. Taxpayer lives in Wyoming. b. The decision was rendered by the U.S

> Jake (age 72) and Jessica (age 28) were recently married. To avoid any transfer taxes, Jake has promised to leave Jessica all of his wealth when he dies. Is Jake under some misconception about the operation of the Federal gift and estate taxes? Explain.

> Marcie is divorced, and her married son, Jamie (age 25), and his wife, Audrey (age 18), live with her. During the year, Jamie earned $4,800 from a part-time job and filed a joint return with Audrey to recover his withholdings. Audrey reports zero gross i

> Lynn Swartz’s husband died three years ago. Her parents have an income of over $200,000 a year and want to ensure that funds will be available for the education of Lynn’s 8-year-old son, Eric. Lynn is currently earning $45,000 a year. Lynn’s parents have

> Distinguish between an estate tax and an inheritance tax. a. Do some states impose both? Neither? b. Which, if either, does the Federal government impose?