Able Baker Charlie Company Charles Maxwell is starting a cheesecake bakery, Able Baker Charlie Company, to produce and sell different flavored cheesecakes to restaurants and the general public. He has just begun his study of accounting, and is a bit confused about the many types of reports he has read about and how they will help him run his business. He asks you to help him clarity what the differences between managerial accounting and financial accounting are. He's also wondering how to set up his inventory, how to classify the costs of his business, and how to 5 in some missing information. Required: 1. Choose whether the characteristics on the Managerial vs. Financial panel are most often associated with managerial accounting or financial accounting 2. Charles has provided some of the costs he expects to incur on the Cost Classification panel. Decide on the classifications that could be applied to each of these costs using the table provided. The cost object in each case is the cheesecake 3. Charles found some sample income statements and balance sheets on the Internet, and asked which of them might be most appropriate for a manufacturing business (ke his. Review income statements A and B on the Income Statements panel, and balance sheets C and D on the Balance Sheets panel. Determine which income statement and balance sheet would be most appropriate for a manufacturing business like Able Baker Charlie. Then, on the Financial Statements panel denote which income statement and balance sheet would be most appropriate for a manufacturing business 4. At the end of February, after the second month of operations of Able Baker Charlie Company, Charles shows you the data he's collected, but he was unable to figure out some of the amounts. On the Costs and Balances panel, determine the missing amounts. Note: it may be helpful to use T accounts to map the flow of the amounts through the manufacturing accounts and solve for the missing dollar values Choose whether the following characteristics are most often associated with managerial accounting or financial accounting Primarily used for internal decision making Generally Accepted Accounting Principles (GAAP) must be used Prepared statements usually pertain to the company as a whole rather than individual departments or products Information provided will often be subjective, such as estimated future results Often prepared on an as-needed basis rather than at foxed intervals Use principles of the Sustainability Accounting Standards Board (SASB) to provide sustainability information to external financial statement users Consideration of sustainability practices to contribute to the company's long-term success Using eco-efficiency.measures to reduce expenses Managerial Accounting Financial Accounting 0 0 D B D CO D D D D D Cost Cost Product Period Direct Materials Direct Factory Labor Overhead Selling Administrative Direct Indirect Prime Conversion Expense Expense Cost Cost Cost Cost Charles has provided some of the costs he expects to incur as follows. Decide on the classifications that could be applied to each of these costs using the table provided. The cost object in each case is the cheesecake. 9 D D D D D D D C D D D D D. D D D D D D D Cost Eggs used to make cheesecakes Baker's wages Delivery driver wages Depreciation of office computers Power to run the cheesecake ovens President's salary Sales commissions Factory supervisor salary D DOD < Data for February Decrease in materials inventory Materials inventory on Feb. 28 Direct materials purchased Direct materials used Total manufacturing costs fhcurred in period Total manufacturing costs incurred in period Total manufacturing costs incurred in period $3,600 50% of materials inventory on Jan. 31 $11,700 3 times the direct labor incurred $27,300 70% of Cost of Goods Manufactured $10,000 less than Cost of Goods Sold Account Balances Account Materials Inventory Work in Process Inventory Einished Goods Inventory Jan. 31 Feb. 28 Costs Incurred 27,000 Direct Materials Used Direct Labor Incurred 15,500 Factory Overhead Incurred Cost of Goods Sold