Question 1: Explain the key differences between financial accounting and managerial accounting. Question 2: Following are a number of costs that are incurred in a variety of organizations. Cost Item Cost Behaviour The costs of advertising a U2 rock concert in Vancouver. Depreciation on the Hard Rock Cafe building in Ottawa. The electrical costs of running a roller coaster at West Edmonton Mall. Property taxes on your local cinema. The costs of synthetic materials used to make Reebok running shoes. The costs of shipping Apple iPods to retail stores. The cost of leasing a CT-scan diagnostic machine at the American Hospital in Paris. Required: Classify each cost as variable or fixed with respect to the number of units sold or services provided by the organization. -- Continued on Next Page -- Question 3: Kelowna Plumbing Supplies shows the following data related to its December 31, 2020 fiscal year: Raw materials inventory, January 1, 2020 $5,000 Raw materials inventory, December 31, 2020 8,000 Work in process inventory, January 1, 2020 23,000 Work in process inventory, December 31, 2020 21,000 Finished goods inventory, January 1, 2020 16,000 Finished goods inventory, December 31, 2020 10,000 Advertising 56,000 Factory supervisor's salary 42,000 Company president's salary 85,000 Property taxes - factory 25,000 Depreciation - factory 35,000 Factory maintenance 7,000 Sales commissions 32,000 Depreciation - office 2,000 Utilities expense - factory 23,000 Utilities expense - office 1000 Purchases of raw materials 148,000 Direct labour 160,000 Required: Based on the information above, prepare a Schedule of Cost of Goods Manufactured. -- Continued on Next Page ---- Continued on Next Page -- Question 4: Outdoor Supplies manufactures gear for hunting and camping. The company shows the following data related to its December 31, 2020 fiscal year end: Raw materials inventory, January 1, 2020 $14,000 Raw materials inventory, December 31, 2020 7,000 Work in process inventory, January 1, 2020 31,000 Work in process inventory, December 31, 2020 20,000 Finished goods inventory, January 1, 2020 34.000 Finished goods inventory, December 31, 2020 68,000 Direct labour 275,000 Factory supervisor's wages 54,000 Company president's salary 120,000 Purchases of raw materials 425,000 Depreciation (60% factory, 40% office) 240,000 Property taxes (80% factory, 20% office) 20,000 Sales commissions 100,000 Repairs and maintenance (100% relate to the factory 15,000 Utilities expense (90% factory, 10% office) 30,000 Sales revenue 2,050,000 Advertising 215,000 Required: Based on the information above: a.) Prepare a schedule of cost of goods manufactured. b.) Prepare a schedule of cost of goods sold. c.) Prepare an income statement (assuming a tax rate of 20%). -- Continued on Next Page -- Question 5: Classify the following costs as either product (inventoriable) costs or period (non-inventoriable) costs in a manufacturing company: Costs Product/Period Depreciation on salespeople's cars. 2. Rent on equipment used in the factory. Lubricants used for maintenance of factory equipment. Salaries of finished goods warehouse personnel. Soap and paper towels used by factory workers. Sales supervisors' salaries. Property taxes on the factory building Materials used in boxing units of finished product for shipment overseas. (Units are not normally boxed.) Advertising outlays. 10. Workers' compensation insurance on factory employees. Depreciation on chairs and tables in the administrative boardroom. Salary of the production quality supervisor for the company. 13. Depreciation on a Learjet used by the company's executives. 14. Rent on rooms at a Florida resort for a manufacturing conference. 15. Attractively designed box for packaging breakfast cereal
