Chapter 15 Extra Credit

Hide or show questions

Calculator

Mastery Problem: Introduction to Managerial Accounting 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 clarify what the differences between managerial accounting and financial accounting are. Hes also wondering how to set up his inventory, how to classify the costs of his business, and how to fill in some missing information.

Managerial vs. Financial Select whether the following characteristics are most often associated with managerial accounting or financial accounting. Primarily used for internal decision makingManagerial Accounting Generally Accepted Accounting Principles (GAAP) must be usedFinancial Accounting Prepared statements usually pertain to the company as a whole rather than individual departments or productsFinancial Accounting Information provided will often be subjective, such as estimated future resultsManagerial Accounting Often prepared on an as-needed basis rather than at fixed intervalsManagerial Accounting

Feedback

Review the differences between managerial and financial accounting, and how each type of accounting is used in the organization and for management processes.

Cost Classification 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. (Select "Yes" or "No" from the below dropdowns.) CostProduct CostPeriod CostDirect MaterialsDirect LaborFactory OverheadSelling ExpenseAdministrative ExpenseDirect CostIndirect CostPrime CostConversion CostEggs used to make cheesecakes Yes Bakers wages Yes Delivery driver wages Yes Depreciation of office computers Yes Power to run the cheesecake ovens Yes No Presidents salary Yes Sales commissions No Factory supervisor salary Yes