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2.What ifHHHplanned to purchase $44,600 of direct materials? Assume there would be no change in beginning and ending inventories of materials. What effect would this have on cost of services produced?Exercise 1.1Financial Accounting and Cost ManagementClassify each of the following actions as either being associated with the financial accounting information system (FS) or the cost management information system (CMS):4200a.Determining the total compensation of the CEO of a public companyb.Issuing a quarterly earnings reportc.Determining the unit product cost using TDABCd.FSFSCMSCMS
e.Preparing a required report for the SECf.Preparing a sales budgetg.Using cost and revenue information to decide whether to keep, or drop, a product lineh.Preparing an annual statement of financial position that conforms to generally accepted accounting principles (GAAP)i.Using cost and revenue information to decide whether to invest in a new production system or notj.Reducing costs by improving the overall quality of a productk.Using a debt-equity ratio and liquidity ratios from a balance sheet to assess thelikelihood of bankruptcyl.Using a public company's financial statements to decide whether or not to buy its stockExercise 1.2Customer Orientation, Quality, Time-Based CompetitionHepworth Communications produces cell phones. One of the four major electronic components is produced internally. The other three components are purchased from external suppliers. The electronic components and other parts are assembled (by the Assembly Department) and then tested (by the Testing Department). Any units that fail the test are sent to the Rework Department where the unit is taken apart and the failed component is replaced. Data from the Testing Department reveal that the internally produced component (made by the Component Department) is the most frequent cause of product failure. One out of every 50 phones fails because of a faulty internally produced component.Barry Norton is the manager of the Component Department. In a recent performance evaluation, the plant manager told Barry that he needed to be more sensitive to the needs of the department's FSCMSCMSFSCMSCMSFSFS