Exam 1: Management Accounting and Corporate Governance

For a manufacturing company, product costs include all of the following except:

Reno Company provided the following information regarding its operations for the month ending September 30: Required: 1) Compute the firm's total manufacturing overhead cost.2) Prepare a schedule of inventory costs that shows total product costs, ending inventory, and cost of goods sold; and Administrative costs \ 30,000 Depreciation on factory equipment 12,000 Indirect materials 2,000 Marketing and distribution costs 24,000 Salaries for factory supervisors 20,000 Wages for production workers 26,000 Raw materials used 38,000 Sales revenue 196,000 Selling costs 18,000 Utilities for production facilities 8,000 Number of units produced 20,000 Number of units sold 15,000 3) Prepare an income statement for the month ending September 30.

Management accountants have a responsibility to be objective. What does this ethical standard require of management accountants?

Cash paid to production workers should be recorded as Wages Expense in the income statement for the period incurred.

What are period costs? How does the accounting for period costs differ from the accounting for product costs?

Howard Lumber Company mistakenly classified a product cost as an expense that totaled $20,000. The company produced 2,000 units of product and sold 1,000 of them during the year. Management is paid a bonus equal to 2% of net income. In the year in which the mistake was made:

Karen is a Certified Management Accountant and is bound by the IMA's Standards of Ethical Conduct. Her superior has asked her to try to influence the firm's outside auditors with expensive gifts and favors. If Karen complies, she will violate the competence standard.

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

Managerial accounting information is limited or restricted by which of the following authorities or principles?

The Sarbanes-Oxley Act allows, but does not require, a corporation to establish a whistleblower policy.

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: 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. Direct material costs \ 10,000 Direct labor costs 8,000 Overhead costs 4,000 Selling and administrative costs 2,000 Scenario 1: With the error Scenario 2: Without the error 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

What is the effect on the balance sheet of making cash sales of inventory to customers on profit?

What is a value chain? And what relationship is there between the value chain and activity-based management?

As a Certified Management Accountant, Steven is bound by the Institute of Management Accountant's Standards of Ethical Conduct. Describe the actions Steven should take when faced with an ethical dilemma at work.

Depreciation on manufacturing equipment is an indirect product cost, while depreciation on office equipment is a period cost.

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

Select the incorrect statement regarding costs and expenses.

Costs such as transportation-out, sales commissions, uncollectible accounts receivable, and advertising costs are sometimes called:

As a Certified Management Accountant, Derek is bound by the standards of ethical conduct issued by the Institute of Management Accountants. According to the standards, Derek has a responsibility to:

The philosophy of encouraging workers to achieve zero defects and high customer satisfaction is known as total quality management.