Exam 1: Management Accounting and Corporate Governance

If product costs are misclassified as selling costs,the average cost per unit will be understated.

During its first year of operations,Connor Company paid $50,000 for direct materials and $36,000 in wages for production workers.Lease payments and utilities on the production facilities amounted to $14,000.General,selling,and administrative expenses were $16,000.The company produced 5,000 units and sold 4,000 units for $30.00 a unit.The average cost to produce one unit is which of the following amounts?

Which of the following costs should be recorded as an expense?

Managerial accounting focuses primarily on the performance of the company as a whole.

Product costs flow from the balance sheet to the income statement.

Discuss the regulation of financial accounting,and compare to the level of regulation of managerial accounting information.

The Carson Company was started at the beginning of the current year when it acquired $20,000 by issuing common stock to its owners.During the year,the company incurred the following cash costs: Direct material costs \ 10,000 Direct labor costs 8,000 Overhead costs 4,000 Selling and administrative costs 2,000 The company produced 5,000 units of product and sold 4,500 units.The average selling price was $7.00 per unit.The accountant who prepared the firm's financial statements misclassified the selling and administrative costs as product costs. Required: Demonstrate the impact of the error on the company's financial statements by completing the following schedule. Income statement: Revenue Less: Cost of goods sold Gross margin Less: Selling, general, and administrative expenses Net income Balance sheet: Assets Cash Inventory Total assets Equity Common stock Retained earnings Total equity Scenario 1: With the error Scenario 2: Without the error

As a Certified Management Accountant,Grace is bound by the standards of ethical conduct issued by the Institute of Management Accountants.If she accepts an expensive gift from a vendor trying to win a contract with her firm,which of the following standards will she violate?

As a Certified Management Accountant,Suzanne is bound by the standards of ethical conduct issued by the Institute of Management Accountants.During the course of business,Suzanne learned that her company has decided to discontinue a major product line.If she mentions this fact to her brother,who is a stockbroker,Suzanne could be in violation of the:

Select the incorrect statement regarding the relationship between type of user and type of information.

Which of the following costs is not considered to be a period cost?

The Giga Company produces tablet computers.The following information is provided: Required: Classify each of the company's costs as a period cost (general,selling,and administrative cost)or as a direct or indirect product cost.Enter the dollar amount of the cost in the appropriate column.After entering all amounts,calculate the total general,selling,and administrative cost,the total direct product cost,and the total indirect product cost. Item Period cost Direct product cost Indirect product cost a) b) c) d) e) f) g) h) i) i) k) l) m) Total

Assuming that the number of units produced exceeds the number of units sold,misclassifying period costs as product costs will overstate net income relative to what net income would be without this error.

Why do accountants normally calculate cost per unit as an average?

Which of the following costs would be classified as a direct cost for a company that produces motorcycles?

During its first year of operations,a company that incurred $1,000 in production costs reported cost of goods sold of $800 and selling costs of $100.Its ending finished goods inventory was $300.

A systematic problem-solving philosophy that encourages front line workers to achieve zero defects is known as:

Which of the following is not a provision of the Sarbanes-Oxley Act of 2002?

Certified Management Accountants (CMA)must complete a specified number of continuing professional education credits each reporting period.Which of the four standards of ethical conduct issued by the Institute of Management Accountants likely motivated this requirement?

During her first year with the company,Ann mistakenly accumulated some of the company's period costs in ending inventory.Which of the following indicates how this error affects the company's financial statements assuming number of units produced exceeded number of units sold during the period?