Chapter 16: Q2RQ (page 859)
Question: What is an annual report? Briefly describe the key parts of the annual report.
Answer
An annual report is all about the financial performance and other activities of an organization in the last preceding years
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Comparing managerial accounting and financial accounting For each of the following, indicate whether the statement relates to managerial accounting (MA) or financial accounting (FA):
b. Provides detailed reports on parts of the company.
Explain the difference between line positions and staff positions.
Computing cost of goods manufactured and cost of goods sold
Use the following information for a manufacturer to compute cost of goods manufactured and cost of goods sold:
Balances: Beginning Ending
Direct Materials \( 27,000 \) 28,000
Work-in-Process Inventory 40,000 32,000
Finished Goods Inventory 18,000 25,000
Other information:
Purchases of direct materials $ 73,000
Direct labor 88,000
Manufacturing overhead 43,000
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:
• Shaft and handle of weed trimmer
• Motor of weed trimmer
• Factory labor for workers assembling weed trimmers
• Nylon thread used by the weed trimmer (not traced to the product)
• Glue to hold the housing together
• Plant janitorial wages
• Depreciation on factory equipment
• Rent on plant
• Sales commissions
• Administrative salaries
• Plant utilities
• Shipping costs to deliver finished weed trimmers to customers
Requirements
1. Describe the difference between period costs and product costs.
2. Classify Lawlor’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.
Identify the following characteristics as primarily related to financial accounting (FA) or managerial accounting (MA):
5. Summary reports prepared quarterly or annually.
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