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Chapter 16: 16-1SE_c (page 885)

Comparing managerial accounting and financial accounting

For each of the following, indicate whether the statement relates to managerial accounting (MA) or financial accounting (FA):

c. Helps in planning and controlling operations

Short Answer

Expert verified

Managerial Accounting helps in planning and controlling the business operations.

Step by step solution

01

Definition of planning

Planning is defined as the process of choosing the organizational objective and deciding the steps to achieve it.

02

Identification of accounting

The planning and controlling operations are the functions of managerial planning. Planning is the choosing the organization’s goal and deciding how to achieve it and controlling is checking whether the plans are implemented accordingly

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Most popular questions from this chapter

Comparing managerial accounting and financial accounting

Match the following terms to the appropriate statement. Some terms may be used more than once, and some terms may not be used at all.

Directing Managerial

Creditors Managers

Controlling Planning

Financial Stockholders

a. Accounting systems that must follow GAAP.

b. External parties for whom financial accounting reports are prepared.

c. The role managers play when they are monitoring day-to-day operations and keeping the company on track.

d. Internal decision makers.

e. Accounting system that provides information on a company’s past performance.

f. Accounting system not restricted by GAAP.

g. The management function that involves choosing goals and deciding how to achieve them

Identifying product costs and period costs Classify each cost of a paper manufacturer as either a product cost or a period cost:

a. Salaries of scientists studying ways to speed forest growth.

How is cost of goods manufactured calculated?

Determining the flow of costs through a manufacturer’s inventory accounts

True Fit Shoe Company makes loafers. During the most recent year, True Fit incurred total manufacturing costs of \(21,900,000. Of this amount, \)2,600,000 was direct materials used and \(14,800,000 was direct labor. Beginning balances for the year were Direct Materials, \)700,000; Work-in-Process Inventory, \(1,500,000; and Finished Goods Inventory, \)1,100,000. At the end of the year, balances were Direct Materials, \(800,000; Work-in-Process Inventory, \)2,000,000; and Finished Goods Inventory, $1,080,000.

Requirements Analyze the inventory accounts to determine:

1. Cost of direct materials purchased during the year.

2. Cost of goods manufactured for the year.

3. Cost of goods sold for the year.

Identifying product costs and period costs Classify each cost of a paper manufacturer as either a product cost or a period cost:

f. Cost of TV ads.
See all solutions

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