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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

What are prime costs? Conversion costs?

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.

Calculating unit cost per service

Marx and Tyler provides hair-cutting services in the local community. In February, the business cut the hair of 190 clients, earned \(4,800 in revenues, and incurred the following operating costs:

Hair Supplies Expense \) 950

Wages Expense 548

Utilities Expense 190

Depreciation Expense—Equipment 60

What was the cost of service to provide one haircut?

Comparing managerial accounting and financial accounting

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

d. Reports must follow Generally Accepted Accounting Principles (GAAP).

Identify each cost as a period cost or a product cost. If it is a product cost, further indicate if the cost is direct materials, direct labor, or manufacturing overhead. Then determine if the product cost is a prime cost and/or a conversion cost.

7. Wages of the office receptionist in an administrative office
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