Quick Check Questions

Managerial Accounting Third Canadian Edition Instructor’s Solutions Manual 87 Copyright © 2018 Pearson Canada Inc.Chapter 2 Building Blocks of Managerial Accounting Quick Check Questions

Answers:

• b 3. a 5. c 7. b 9. b
• b 4. b 6. b 8. d 10. c

Managerial Accounting Canadian 3rd Edition Braun Solutions Manual Visit TestBankDeal.com to get complete for all chapters

88 Managerial Accounting Third Canadian Edition Instructor’s Solutions Manual Copyright © 2018 Pearson Canada Inc.Short Exercises (5 min.) S2-1 X-Treme is a merchandiser because it has a single inventory account.Y-Not? is a service company because it has no inventory.

Zesto is a manufacturer because it has three kinds of inventory:

raw materials inventory, work in process inventory, and finished goods inventory.

Managerial Accounting Third Canadian Edition Instructor’s Solutions Manual 89 Copyright © 2018 Pearson Canada Inc.(10 min.) S2-2

• Service companies generally have no inventory.
• Bombardier is a manufacturing company.
• Merchandisers’ inventory consists of the cost of

merchandise and freight-in.

d. Manufacturing companies carry three types of inventories:

raw materials inventory, work in process inventory, and finished goods inventory.

• TD Insurance is a service company.
• Two types of merchandising companies include retailers

and wholesalers.

• Direct materials are stored in raw materials inventory.
• Le Chateau is a merchandising company.
• Manufacturers sell from their stock of finished goods

inventory.

• Labour costs usually account for the highest percentage of

service companies’ costs.

• Partially completed units are kept in the work in process

inventory.

90 Managerial Accounting Third Canadian Edition Instructor’s Solutions Manual Copyright © 2018 Pearson Canada Inc.(5 min.) S2-3

• Distribution
• Design
• Marketing
• Research and Development (R&D)
• Customer Service
• Production or Purchases