Exam 17: Managerial Accounting and Cost Concepts

Cost of goods manufactured appears on the income statement of a manufacturing company in a similar manner as purchases appear on the income statement of a merchandising company.

Factory employees' wages are recorded into the Work in Process Inventory account.

Depreciation expense could be

Management accounting information is determined objectively and is verifiable,whereas financial accounting is more subjective.

As the management accountant for Bynami Enterprises Inc. ,you have been asked to prepare a statement of cost of goods manufactured at the end of the second quarter.Account balances at that time were as follows: June 30 inventories were as follows: materials,$540,200;work in process,$795,400;and finished goods,$604,100.Prepare the statement of cost of goods manufactured for the second quarter.

Which of the following is included in prime costs?

The management process and management accounting are identical.

Complete the following chart by placing an "X" under the applicable column heading.Classify each cost as a fixed cost or variable cost and as either a direct or indirect product cost or a period cost.

Management accounting complements each stage of the management process.

To calculate the total cost of goods manufactured from total manufacturing costs

Which of the following accounts decreases when cost of goods manufactured is recorded?

Suppose a management accountant becomes aware of a confidential but illegal act that has occurred within her company.The management accountant must consider what she is ethically bound to do about this situation.Three alternative responses to this situation are given below.State whether you agree or disagree with each,and briefly detail your reasons. a.The accountant must remain loyal to the company at all times and should report the occurrence only to appropriate officials within the company. b.The accountant is bound to inform officials only if she stands to personally gain (make money)from knowledge of the illegal act. c.The accountant must exercise personal judgment;a clear-cut answer does not exist given the limited information provided.

Total variable costs remain constant within a defined time period or range of activity.

In a manufacturing company,an accountant's salary is a value-adding cost.

The overriding goal of a business is to increase the value of the stakeholders' interest in the business.

If a management accountant gives information about a future merger of his or her company to a relative,the accountant has acted ethically.

Prime costs is the sum of

Some period costs can be found in inventory accounts on the balance sheet.

All ethical conflicts are resolved by the accountant of a company.

Accountants must have high professional ethics.List and briefly describe five ethical standards that management accountants subscribe to that,in your opinion,help maintain the impression that accountants are highly ethical. The student should list any five of the following ethical standards: