Ethics & Trend in Managerial Accounting
What three factors must exist for a person to commit fraud?
opportunity, financial pressure and rationalization
Answer true or false – Total fixed cost does not change when activity change
True
True or false – Period costs are not expensed in the period in which they are incurred
False
What are the 3 inventories of a manufacturing company?
Raw Material, work in process and finished goods
What are somethings a corporation need to consider in order to maximize shareholders value?
The demands of other stakeholders, including employees, suppliers, and society in general (financial, social and environmental).
Name 2 changes in managerial accounting as it evolves
Customer orientation ; lean practices; value chain ; global economy; ecommerce; service economy
I am traceable to single cost object eg. Material and labor cost for a product. What am I?
Direct Cost
Classify the following cost as fixed or variable cost, period cost or product cost, and whether it is direct or indirect cost: Advertising Cost; Factory rent: Sales Commission
Advertising Cost - Fixed; Indirect cost; period cost
Factory Rent - Fixed; indirect; product
Sales commission – Variable; Indirect; period cost
Adopting this practice means that all systems and procedures must be realigned? Which practice is this?
The Lean practice
What is the formula for raw material inventory turnover?
Raw Materials used divided by average raw material inventory
Seek and uncover waste in a company is linked to what strategy?
Total Quality Management
Name some examples of indirect cost
Maintenance expenditure benefiting two or more departments
Define direct material costs
Direct material costs are the expenditures for direct materials that are separately and readily traced through the manufacturing process to finished goods.
A retail bread company uses a series of activities that adds value to the company’s products and services. What type of system does the company use?
Value Chain
How would you calculate days sales in raw material inventory?
Ending raw material inventory divided by raw material used multiply by 365
Company A only acquires inventory and produces only when goods are needed. What kind of system does Company A use?
Just in Time System (JIT)
Name the three cost elements that make up product cost
direct material costs, direct labor cost and factory overhead costs
Answer true or false - The purpose of Managerial Accounting information is to help external users make investment decisions.
False
How many parts is the Manufacturing Statement divided into and what are they?
Four parts: direct materials, direct labor, overhead, and computation of cost of goods manufactured.
What would a manager use the days sales in raw material inventory to do?
To determine whether there is adequate raw material inventory to meet demand.
what is the focus of Total Quality Management?
Total quality management focuses on quality improvement to its business activities.
Write a short definition for period cost and give two examples
Period costs are non-production costs and are usually more associated with activities linked to a time period than with completed products.
Eg. salaries of sales staff, wages of maintenance workers, advertising expenses, and depreciation on office furniture and equipment
What are the cost elements of conversion cost?
Direct labor and Manufacturing Over head
What are the primary difference in the inventory on the Balance Sheet of a Merchandiser and a Manufacturer?
Merchandisers have one category of inventory called Merchandise Inventory. Manufacturers have three major categories of inventory: Raw Materials, Work in Process, also called goods in process, and Finished Goods.
Name 2 of the key differences between Financial Accounting and Managerial Accounting
Financial Accounting is structured and often controlled by GAAP; Managerial Accounting has no GAAP constraints.
Financial Accounting Reports are often available to investors after an audit; Managerial Accounting reports are available quickly without an audit.