Act 222 HW Solutions 5th edition

Act 222 HW Solutions 5th edition - CHAPTER 1 Managerial...

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Unformatted text preview: CHAPTER 1 Managerial Accounting Homework Solutions ANSWERS TO QUESTIONS (4, 10, 16, 17, 18, 19, 23) 4. Budgets are prepared by companies to provide future direction. Because the budget is also used as an evaluation tool, some managers try to game the budgeting process by underestimating their divisions predicted performance so that it will be easier to meet their performance targets. On the other hand, if the budget is set at unattainable levels, managers sometimes take unethical actions to meet targets to receive higher compensation or in some cases to keep their jobs. 10. The difference in balance sheets pertains to the presentation of inventories in the current asset section. In a merchandising company, only merchandise inventory is shown. In a manufacturing company, three inventory accounts are shown: finished goods, work in process, and raw materials. 16. Raw materials inventory, beginning........................................................................... $ 12,000 Raw materials purchases ................................................................................................. 170,000 Total raw materials available for use................................................................................. 182,000 Raw materials inventory, ending ........................................................................................ 15,000 Direct materials used..................................................................................... ............... $167,000 17. Direct materials used................................................................................................. $240,000 Direct labor used ............................................................................ ................................. 200,000 Total manufacturing overhead.......................................................... ................................ 180,000 Total manufacturing costs................................................................... ......................... $620,000 18. (a) Total cost of work in process ($26,000 + $620,000) ........................................... $646,000 (b) Cost of goods manufactured ($646,000 $32,000)............................................. $614,000 19. The order of listing is finished goods inventory, work in process inventory, and raw materials inventory....
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Act 222 HW Solutions 5th edition - CHAPTER 1 Managerial...

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