Exam 15: Managerial Accounting and Cost Concepts

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.

Building depreciation is an example of a direct product cost in a manufacturing company.

From Jolier's year-end income statement,you observe that the finished goods inventory has doubled during the year.This would indicate that during the year Jolier

Assume you are the president of the business club at your school.You are thinking about creating a fundraising project to generate money for next year's operations.Develop an outline of your ideas using the various stages of the management process. Note: Student answers will vary considerably;however,they should adequately cover the four stages of the management process.An example answer is given below.

Which of the following should not be included in the computation of cost of goods manufactured?

The changes in the balance of Work in Process Inventory and the total manufacturing costs for a period are used to compute cost of goods manufactured.

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

The following are costs for a selected period: direct materials used in production,$75,000;direct labor cost of converting materials into product,$150,000;total indirect costs of manufacturing,$45,000.What is the unit cost of manufacturing 30,000 units in this period?

The terms total manufacturing costs and total cost of goods manufactured are synonymous.

Product unit cost is the sum of direct materials,direct labor,and overhead divided by the total number of units produced.

The beginning finished goods inventory of Ronald Co.was $480,125.Goods completed during the year cost $963,250.The ending finished goods inventory was dangerously low,having been reduced to $135,850.The cost of goods sold for the year for Ronald Co.was

Period cost is also called

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.

Variable costs per unit change in an inversely proportional rate to changes in volume.

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

Direct materials are the only materials used in a product.

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

Management accounting activities

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

Although the purpose of the confidentiality standard is to encourage management accountants to remain loyal to their company,failure to disclose knowledge of internal illegal acts to outside authorities can result in the accountants being charged as an accessory to the crime.