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1. What is the primary purpose of managerial accounting?

Short Answer

Expert verified

Managerial accounting is a field of accounting that has the purpose of providing information to managers and employees.

Step by step solution

01

Definition of  managerial accounting

Managerial accounting is defined as the field of accounting which focus on providing information for internal decision-makers.

02

Purpose of marginal accounting

Managerial accounting has the main purpose of providing the relevant information to the managers and employees to plan, direct, and control operations.

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Most popular questions from this chapter

Comparing managerial accounting and financial accounting

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

  1. Helps investors make investment decisions

Preparing a schedule of cost of goods manufactured and an income statement for a manufacturing company

Chewy Bones manufactures its own brand of pet chew bones. At the end of December 2018, the accounting records showed the following:

Balances: Beginning Ending

Direct Materials \( 13,400 \) 10,500

Work-in-Process Inventory 0 1,500

Finished Goods Inventory 0 5,400

Other information:

Direct materials purchases $ 39,000

Plant janitorial services 900

Sales salaries 5,100

Delivery costs 1,700

Net sales revenue 115,000

Utilities for plant 1,200

Rent on plant 9,000

Customer service hotline costs 1,600

Direct labor 16,000

Requirements

1. Prepare a schedule of cost of goods manufactured for Chewy Bones for the year ended December 31, 2018.

2. Prepare an income statement for Chewy Bones for the year ended December 31, 2018.

3. How does the format of the income statement for Chewy Bones differ from the income statement of a merchandiser?

4. Chewy Bones manufactured 17,500 units of its product in 2018. Compute the companyโ€™s unit product cost for the year, rounded to the nearest cent.

Question:Classifying period costs and product costs

Lawlor, Inc. is the manufacturer of lawn care equipment. The company incurs the following costs while manufacturing weed trimmers:

โ€ข Shaft and handle of weed trimmer

โ€ข Motor of weed trimmer

โ€ข Factory labor for workers assembling weed trimmers

โ€ข Nylon thread used by the weed trimmer (not traced to the product)

โ€ข Glue to hold the housing together

โ€ข Plant janitorial wages

โ€ข Depreciation on factory equipment

โ€ข Rent on plant

โ€ข Sales commissions

โ€ข Administrative salaries

โ€ข Plant utilities

โ€ข Shipping costs to deliver finished weed trimmers to customers

Requirements

1. Describe the difference between period costs and product costs.

2. Classify Lawlorโ€™s costs as period costs or product costs. If the costs are product costs, further classify them as direct materials, direct labor, or manufacturing overhead.

Preparing a schedule of cost of goods manufactured and an income statement for a manufacturing company

Certain item descriptions and amounts are missing from the monthly schedule of cost of goods manufactured and income statement of Charlie Manufacturing Company. Fill in the blanks with the missing words, and replace the Xs with the correct amounts.

ing Direct Ending Direct Direct Manufacturing Overhead Total Costs Total Costs Ending Direct Materials Beginning Direct Materials Purchases of Direct Materials \( 26,000 \) X \( X X X (29,000) 177,000 50,000 \) X 51,000 81,000 (26,000) C

Net Sales Revenue Cost of Goods Sold Total Income Cost of Goods Sold: Gross Profit Expenses: Selling Expenses Administrative Expenses Cost of Goods Ending Beginning \( X 232,000 268,000 X 150,000 90,000 \) 118,000 X X X $ X CHARLIE MANUFACTURING COMPANY June 30

ABC Cleaning Company cleaned 45 offices and incurred costs of $2,340. What was the cost to clean each office?

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