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Chapter 16: Q4RQ (page 884)

Explain the differences between planning, directing, and controlling.

Short Answer

Expert verified

The planning setting up of a goal, directing is working towards the goal, and controlling is checking whether the work is done as per the planning.

Step by step solution

01

Managerial Accounting Function

Business managers need the information to plan, direct and control the operations of the business led by them.

02

Difference between planning, directing, and controlling

Planning is defined as the process of choosing goals and deciding how to achieve them

Directing usually involves running the day-to-day operations of the business.

Controlling is the process of monitoring the day-to-day operations and keeping the company in check.

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Most popular questions from this chapter

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

c. Cost of electricity at the paper mill

Computing cost of goods manufactured

Use the following inventory data for Caddy Golf Company to compute the cost of goods manufactured for the year:

Direct Materials Used $ 12,000

Manufacturing Overhead 21,000

Work-in-Process Inventory:

Beginning Balance 1,000

Ending Balance 5,000

Direct Labor 9,000

Finished Goods Inventory:

Beginning Balance 18,000

Ending Balance 4,000

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

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 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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