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Chapter 16: Q16-2SE-c (page 885)

The Institute of Management Accountants’ Statement of Ethical Professional Practice requires managerial accountants to meet standards regarding competence, confidentiality, integrity, and credibility. Consider the following situations. Which standard(s) is(are) violated in each situation?

c. At a company-paid conference on e-commerce, you skip the afternoon session and go sightseeing

Short Answer

Expert verified

The ethical standard violated, in this case, are competence and integrity.

Step by step solution

01

Definition of an ethics

Ethics are defined as those standards which are concerned with what is morally good or bad and right or wrong.

02

Identification of violated ethical standards

The correct option is competence and integrity standards.

In this case, the company is organizing the conference on e-commerce to train the employees of the business. Skipping continuing education sessions could violate the requirement to maintain professional competence.

If the company has paid some amount of money to attend the conference, skipping these sessions will violate the integrity standards.

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Most popular questions from this chapter

Identifying ethical standards

The Institute of Management Accountants’ Statement of Ethical Professional Practice requires managerial accountants to meet standards regarding competence, confidentiality, integrity, and credibility. Consider the following situations. Which standard(s) is(are) violated in each situation?

b. You see others take home office supplies for personal use. As an intern, you do the same thing, assuming that this is a “perk.”

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:

e. Cost of chemicals to treat the paper.

How does a manufacturing company calculate cost of goods sold? How is this different from a merchandising company?

ABC Manufacturing Company has the following data for 2019 (amounts in millions):

Direct Materials, January 1 $ 5

Direct Materials, December 31 7

Work-in-Process Inventory, January 1 12

Work-in-Process Inventory, December 31 16

Finished Goods Inventory, January 1 8

Finished Goods Inventory, December 31 6

Direct Materials Purchased, including Freight In 25

Direct Labor 36

Manufacturing Overhead 17

Prepare the schedule of cost of goods manufactured and the cost of goods sold section of the income statement for the year ended December 31, 2019.
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