Chapter 16 - CHAPTER 16 (FIN MAN); CHAPTER 1 (MAN)...

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Unformatted text preview: CHAPTER 16 (FIN MAN); CHAPTER 1 (MAN) INTRODUCTION TO MANAGERIAL ACCOUNTING AND JOB ORDER COST SYSTEMS CLASS DISCUSSION QUESTIONS 1. Managerial accounting and financial ac- counting are different in several ways. Ma- nagerial accounting is concerned with the in- formation needs of internal decision makers, rather than external decision makers. As such, managerial accounting is not subject to a defined set of reporting rules. Manage- ment accountants have reasonable latitude in providing information that is useful to managers. Managerial accounting has very few set rules to govern how it is done. The idea of different costs for different needs suggests that there isn’t just one way to view business events. Like financial ac- counting, managerial accounting reports can be prepared periodically. In addition, mana- gerial accounting reports can also be pre- pared at any time to support a decision. Like financial accounting, managerial accounting reports provide information about the busi- ness as a whole. Also, managerial account- ing reports provide information about any level of the organization as required by man- agement. 2. a. A line department is directly involved in the basic objectives of the organization, while a staff department provides ser- vice, assistance, or advice to line de- partments or other staff departments. b. (1) Sales Department (2) Personnel Department 3. a. The role of the controller is to provide financial and accounting advice and as- sistance to management. b. The controller has a staff responsibility. 4. Memory chips would be considered a direct materials cost for a desktop computer. 5. Product cost information is used by man- agers to (1) establish product prices, (2) control operations, and (3) develop financial statements. 6. a. Job order cost system and process cost system. b. The job order cost system provides a separate record of each quantity of product that passes through the factory. c. Process cost systems accumulate costs for each department or process within a factory. 7. Job order costing is used by firms that sell custom goods and services to customers. The job order system is frequently associ- ated with firms that will produce a product or service specifically to a customer order. 8. No. A job order cost system is not appropri- ate because workers could not physically differentiate between the products being worked on in different orders. 9. Materials should not be issued by the store- keeper without a properly authorized materi- als requisition. Both the storekeeper and the recipient of the materials should initial the materials requisition when the materials are issued to indicate release of the proper amount of materials from the storeroom....
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This note was uploaded on 05/03/2008 for the course ACCT 1B taught by Professor Llorente during the Spring '08 term at CSU Fullerton.

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Chapter 16 - CHAPTER 16 (FIN MAN); CHAPTER 1 (MAN)...

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