MANAGERIAL ACCOUNTING W/CONNECT
3rd Edition
ISBN: 9781260817553
Author: Whitecotton
Publisher: MCG
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Textbook Question
Chapter 1, Problem 14E
Explaining Effects of Cost Misclassification Donna is a cost accountant for Northwind Corp. She is very efficient and hard-working; however, she occasionally transposes numbers when recording transactions. While working late recently, accident any recorded $19,000 of advertising cost instead of the correct $91,000. The
transaction was correctly in all other respects.
Required:
Explain how Donna's error will affect the following:
1.
2. Inventory.
3. Cost of Goods Sold.
4. Period Expenses.
5. Net Income.
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An employee accidentally overstated the year’s advertising expense by $50,000. Which of the following statement is correct regarding the consequence of this error?
Multiple Choice
Cost of goods sold (COGS) will be overstated by $50,000
COGS will be overstated by $50,000 and COGM will be understated by $50,000
None of the answers provided is correct
Both COGM and COGS will be overstated by $50,000.
Cost of goods manufactured (COGM) will be overstated by $50,000
1. What is the major advantage of using a perpetual inventory system?
a. It provides efficient internal control over materials.
b. It avoids inventory shortages and overages.
c. It avoids losses due to theft.
d. It minimizes error in posting receipts and issues of materials.
2. If the 300 defective bolts(normal spoilage) were repaired and management wanted to be sure the incremental costs did not exceed the cost of producing new units, how would the rework costs be accounted for:
a. Charged to overhead and spread over the costs of all products.
b. Expensed as extraordinary.
c. Charged to those belts repaired.
d. As normal materials, labor and overhead.
How do i compute cost of goods manufactured for this one? Please explain me step by step as i am getting confused on the finished good inventory here.
Materials used in product
$123,900
Advertising expense
$49,200
Depreciation on plant
65,100
Property taxes on plant
15,000
Property taxes on store
7,290
Delivery expense
24,600
Labor costs of assembly-line workers
119,700
Sales commissions
43,100
Factory supplies used
31,700
Salaries paid to sales clerks
54,100
Work in process inventory was $12,000 at January 1 and $16,600 at December 31. Finished goods inventory was $68,500 at January 1 and $47,900 at December 31.
Chapter 1 Solutions
MANAGERIAL ACCOUNTING W/CONNECT
Ch. 1 - What is the primary difference between financial...Ch. 1 - Prob. 2QCh. 1 - Why are traditional, GAAP-based financial...Ch. 1 - Prob. 4QCh. 1 - consider the area within a 3-mile radius of your...Ch. 1 - What are the three basic functions of management?Ch. 1 - How are the three basic management functions...Ch. 1 - What are ethics and why is ethical behavior...Ch. 1 - Prob. 9QCh. 1 - Prob. 10Q
Ch. 1 - Prob. 11QCh. 1 - Prob. 12QCh. 1 - Why are businesses starting to incorporate...Ch. 1 - What factors does sustainability accounting...Ch. 1 - Think about your activities over the last week....Ch. 1 - Prob. 16QCh. 1 - Why is it important for managers to be able to...Ch. 1 - Prob. 18QCh. 1 - Prob. 19QCh. 1 - Explain the difference between relevant and...Ch. 1 - Prob. 21QCh. 1 - What are prime costs? Why have they decreased in...Ch. 1 - Prob. 23QCh. 1 - Why can't prime cost and conversion cost be added...Ch. 1 - Prob. 25QCh. 1 - Prob. 26QCh. 1 - Prob. 27QCh. 1 - Prob. 28QCh. 1 - Prob. 29QCh. 1 - Prob. 1MCCh. 1 - Prob. 2MCCh. 1 - Prob. 3MCCh. 1 - Prob. 4MCCh. 1 - Prob. 5MCCh. 1 - What is Garcia's total manufacturing cost? a....Ch. 1 - Prob. 7MCCh. 1 - What is Garcia's manufacturing overhead? a....Ch. 1 - Prob. 9MCCh. 1 - Which of the following would not be treated as a...Ch. 1 - MINI-EXERCISES Comparing Financial and Managerial...Ch. 1 - Prob. 4MECh. 1 - Prob. 5MECh. 1 - Prob. 6MECh. 1 - Prob. 8MECh. 1 - Prob. 9MECh. 1 - Prob. 10MECh. 1 - Identifying Direct and Indirect Costs for a...Ch. 1 - Prob. 12MECh. 1 - Identify sustainability issues affecting the...Ch. 1 - Classifying Costs Seth's Skateboard Company incurs...Ch. 1 - Calculation Costs Cotton White, Inc., makes...Ch. 1 - Prob. 7ECh. 1 - Prob. 8ECh. 1 - Classifying Costs Blockett Company makes...Ch. 1 - Prob. 10ECh. 1 - Prob. 12ECh. 1 - Prob. 13ECh. 1 - Explaining Effects of Cost Misclassification Donna...Ch. 1 - Prob. 4.1GAPCh. 1 - Prob. 4.2GAPCh. 1 - Prob. 4.3GAPCh. 1 - Prob. 3.1GBPCh. 1 - Prob. 3.2GBPCh. 1 - Classifying Costs, Calculating Total Costs, and...Ch. 1 - Prob. 4.2GBPCh. 1 - Classifying Costs, Calculating Total Costs, and...
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