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Practice Problems 1 - Chapter 1 Assignments 1 Briefly...

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Chapter 1 Assignments : 1. Briefly discuss financial and management accounting. Discuss the differences between them. Management accounting differs from financial accounting in the following major ways: (1) an internal focus; (2) emphasis on the future; (3) freedom from GAAP and other mandatory rules; (4) multidisciplinary and broader in scope; (5) evaluates individual segments within the firm and (6) provides more detailed information. 2. Describe the connection between planning, controlling, and feedback. Planning established performance standards, feedback compares actual performance with planned performance, and control uses feedback to evaluate deviations from plans. 3. You are a management accountant for the Gene Division of Lowden Company. Your longtime friend, Brad, is the Gene Division manager. Brad was instrumental in helping you obtain your current position. Because Brad’s annual bonus is based on the amount of profit the Gene Division reports for the year, Brad has asked you to ‘massage the numbers’ to make the Gene Division appear more profitable. Considering the Standards of Ethical Conduct for Management accountants, found in your text (page 16), how would you respond to Brad’s request? Management accountancies have a responsibility to ‘perform their professional duties in accordance with relevant laws, regulations, and technical standards’ according to the Standards of Ethical Conduct for Management Accountants. Therefore, if massaging the numbers involves violating any laws, regulations, or technical standards, it would violate the stated rules. In addition, the Standards indicate hat management accountants have a responsibility to communicate information fairly and objectively and to communicate unfavorable as well as favorable information. 4. Apple Computers incurs the following costs: a. Transportation costs for shipping computers to retail stores Distribution b. Utilities costs incurred by the facility assembling Apple computers Production c. Salaries for personnel developing the next line of computers Research & Development d. Cost of Apple employee’s visit to a major customer to illustrate computer capabilities Customer Service e. Payment for design of packaging materials for computers Design of products, services or processes f. Cost of advertising Marketing Required : classify each of the above cost items into one of the business functions on the value chain.
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Chapter 2 Assignments : 1. Information from the records of Paper Place, Inc. for December 2009 is as follows: Sales $ 820,000 Marketing salaries $ 49,000 Distribution costs $ 38,000 Customer service costs $ 22,000
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