CengageNOWv2, 1 term Printed Access Card for Warren's Survey of Accounting, 8th
8th Edition
ISBN: 9781305961982
Author: Carl Warren
Publisher: Cengage Learning
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Chapter 10, Problem 10.2C
To determine
Concept Introduction:
A Manager and shareholder can't use same information for making their decision. Theirs decisions are different. A shareholder need not to decide on day to day basis while a manager have to do same. A manager require more information than a shareholder for working.
To Prepare:
To decide whether statement of vice president is correct or not.
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Which of the following statements are true?
a. Screening projects of the company and determining whether they are profitable or not is part of the financial manager’s investing role.
b. A financial manager emphasizes that one of the roles of their department is to transact in the financial markets.
c. In an organizational chart, a financial manager who is concerned with determination of product cost and cost control function must be under the Treasurer’s Function.
d. A financial manager who is tasked to assessment the company’s credit capacity. In an organizational chart, he must be under the controller.
Todd Johnson is the vice president of Finance for Boz Zeppelin Industries, Inc. At a recent finance meeting, Todd made the following statement: “The managers of a company should use the same information as the shareholders of the firm. When managers use the same information to guide their internal operations as shareholders use in evaluating their investments, the managers will be aligned with the stockholders’ profit objectives.” Prepare a one-half page memo to Todd discussing any concerns you might have with his statement.
The corporate disclosure practice will help all the stakeholders to understand and measure business operation. Annual financial statement and particularly income statement is one of the most important ones. However, a company's reported profits will be impacted by different factors, including when particular transactions and events are recognised and how such transactions and events are measured.
Question : Using earning management concept, discuss why the timing of recognising events that impact income, revenue or profit or expenses are important for managers?
Chapter 10 Solutions
CengageNOWv2, 1 term Printed Access Card for Warren's Survey of Accounting, 8th
Ch. 10 - Which 01 the following is not considered a cost of...Ch. 10 - Which of the following costs would be included as...Ch. 10 - A company estimated $420,000 of factory overhead...Ch. 10 - If the factory overhead account has a negative...Ch. 10 - When using job order costing for a professional...Ch. 10 - List three differences in how managerial...Ch. 10 - For a company that produces desktop computers,...Ch. 10 - How is product cost information used by managers?Ch. 10 - a.Name two principal types of cost accounting...Ch. 10 - What kind of firm would use a job order cost...
Ch. 10 - Prob. 6CDQCh. 10 - Prob. 7CDQCh. 10 - Describe the Source 01 the data for increasing...Ch. 10 - Prob. 9CDQCh. 10 - a.How is a predetermined factory overhead rate...Ch. 10 - a.What is (1) overapplied factory overhead and (2)...Ch. 10 - At the end of the fiscal year, there s a...Ch. 10 - What is the difference between a product cost and...Ch. 10 - Prob. 14CDQCh. 10 - Prob. 15CDQCh. 10 - How can activity based costing be used in service...Ch. 10 - Classifying costs as materials, labor, or factory...Ch. 10 - Classifying costs as materials, labor, or factory...Ch. 10 - Classifying costs as factory overhead Which of the...Ch. 10 - Classifying costs as product or period costs For...Ch. 10 - Prob. 10.5ECh. 10 - Transactions in a job order cost system Five...Ch. 10 - Cost flow relationships The following information...Ch. 10 - Cost of materials issuances An incomplete...Ch. 10 - Recording issuing of materials Materials issued...Ch. 10 - Amounts for materials Big Timber Furniture Company...Ch. 10 - Prob. 10.11ECh. 10 - Recording factory labor costs The weekly time...Ch. 10 - Recording direct labor and factory overhead...Ch. 10 - Factory overhead rates and account balances...Ch. 10 - Predetermined factory overhead rate Novus Engine...Ch. 10 - Predetermined factory overhead rate Mt Ellis...Ch. 10 - Recording jobs completed The following account...Ch. 10 - Determining manufacturing costs Wagner Printing...Ch. 10 - Financial statements of a manufacturing firm The...Ch. 10 - Job order cost accounting entries for a service...Ch. 10 - Prob. 10.21ECh. 10 - Prob. 10.22ECh. 10 - Just-in-time principles Jupiter Shirt Company...Ch. 10 - Activity-based costing for a hospital Deer Lodge...Ch. 10 - Activity-based costing in an insurance company...Ch. 10 - Classifying costs The following is a list of costs...Ch. 10 - Schedules for unfinished jobs and completed jobs...Ch. 10 - Schedules for unfinished jobs and completed jobs...Ch. 10 - Schedules for unfinished jobs and completed jobs...Ch. 10 - Schedules for unfinished jobs and completed jobs...Ch. 10 - Schedules for unfinished jobs and completed jobs...Ch. 10 - Schedules for unfinished jobs and completed jobs...Ch. 10 - Job cost sheet Hallmark Furniture Company...Ch. 10 - Job cost sheet Hallmark Furniture Company...Ch. 10 - Analyzing manufacturing cost accounts Summer...Ch. 10 - Analyzing manufacturing cost accounts Summer...Ch. 10 - Flow of costs and income statement R-Tunes Inc. is...Ch. 10 - Flow of costs and income statement R-Tunes Inc. is...Ch. 10 - Unit cost analysis The management of Colfax...Ch. 10 - Prob. 10.2MBACh. 10 - Prob. 10.3MBACh. 10 - Prob. 10.4MBACh. 10 - Prob. 10.1CCh. 10 - Prob. 10.2CCh. 10 - Prob. 10.3.1CCh. 10 - Classifying costs Reboot Inc. provides computer...Ch. 10 - Prob. 10.4.1CCh. 10 - Factory overhead rate Fabricator Inc., a...Ch. 10 - Factory overhead rate Fabricator Inc., a...Ch. 10 - Prob. 10.5CCh. 10 - Just-in-time principles Warm Space Inc....
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- Which of the following groups would have access to managerial accounting information? A. bankers B. investors C. competitors of the business D. managersarrow_forwardManagers in decentralized organizations make decisions relating to all of the following except_______. A. the companys stock price B. equipment purchases C. personnel D. prices to charge customersarrow_forwardAn important goal of a responsibility accounting framework is to help ensure which of the following? A. decision-making is made by the top executives. B. investments made by each segment are minimized. C. identification of operating segments that should be closed. D. segment and company financial goals are congruent.arrow_forward
- Assume you have been hired by Cabelas Sporting Goods. As part of your new role in the accounting department, you have been tasked to set up a responsibility accounting structure for the company. As your first task, your supervisor has asked you to give an example of a cost center, profit center, and an investment center within the Cabelas organization. Your supervisor is a little unsure of the difference between a profit center and investment center and would like you to explain the difference.arrow_forwardAssume you have been hired by Hilton Hotels and Resorts. As part of your new role in the accounting department, you have been tasked to set up a responsibility accounting structure for the company. As your first task, your supervisor has asked you to give an example of a cost center, profit center, and an investment center within the Hilton organization. Your supervisor is a little unsure of the difference between a profit center and investment center and would like you to explain the difference.arrow_forwardFinancial information for Lighthizer Trading Company for the fiscal year-ended September 30, 20xx, was collected. As part of a management training session, you have been asked to prepare an income statement format that will be used to distribute to management. Subtotals and totals are included in the information, but you will need to calculate the values. A. In the correct format, prepare the income statement using this information: B. Calculate the profit margin, return on investment, and residual income. Assume an investment base of $42,000 and 8% cost of capital. C. Prepare a short response to accompany the income statement that explains why uncontrollable costs are included in the income statement.arrow_forward
- Managerial accounting produces information: to meet the needs of external users that is often focused on the future to meet the needs of investors that follows the rules of GAAParrow_forwardConsider the dilemma you might someday face if you are the CFO of a company that is struggling to satisfy investors, creditors, stockholders, and internal company managers. All of these financial statement users are clamoring for higher profits and more net assets (also known as equity). If at some point, you suddenly found yourself not meeting the internal and external earnings and equity targets that these parties expect, you would probably search for some way to make the financial statements look better. What if your boss, the CEO, suggested that maybe you should make just one simple journal entry to record all the goods that your company is holding on consignment, as if that significant amount of goods were owned by your company? She might say that this action on your part would fix a lot of problems at once, since adding the consigned goods to merchandise inventory would simultaneously increase net assets on the balance sheet and increase net income on the income statement (since it would decrease cost of goods sold). How would you respond to this request? Write a memo, detailing your willingness or not to embrace this suggestion, giving reasons behind your decision. Remember to exercise diplomacy, even if you must dissent from the opinion of a supervisor. Note that the challenge of the assignment is to keep your integrity intact while also keeping your job, if possible.arrow_forwardPeople affected by decisions made by a company, including Investors, creditors, employees, managers, regulators, customers, suppliers, and laypeople, are known as ________. A. quantitative factors B. qualitative factors C. stakeholders D. stockholdersarrow_forward
- Indicate whether each statement describes financial accounting or managerial accounting. The information is directed at external users who are making decisions pertaining to investing, extending credit, and other decisions. The principal users are the organizations managers. The key focus is on the entity as a whole. The rules and principles are very flexible. The information gathered is usually available after an independent audit has been completed.arrow_forwardThe corporate disclosure practice will help all the stakeholders to understand and measure business operation. Annual financial statement and particularly income statement is one of the most important ones. However, a company's reported profits will be impacted by different factors, including when particular transactions and events are recognised and how such transactions and events are measured.1) Using earning management concept, discuss why the timing of recognising events that impact income, revenue or profit or expenses are important for managers?arrow_forwardWhat is one of the ways that accounting is used to direct and control the manager of a corporation? a.Threatening to tell shareholders a mangers income if a manager makes a ‘poor financial’ decision. b.Linking of a mangers performance to a bonus that depends on accounting profit. c.Making decisions based on the accounting information regardless of managerial input. d.Using income smoothing to assure a manager that they can invest in a low risk investment.arrow_forward
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