TEST BANK FOR Managerial Accounting Tools for Business Decision Making 9th Edition by Jerry J. Weygandt, Paul D. Kimmel, Jill E. Mitchell

TEST BANK FOR Managerial Accounting Tools for Business Decision Making 9th Edition by Jerry J. Weygandt, Paul D. Kimmel, Jill E. Mitchell
HAPTER 1
MANAGERIAL ACCOUNTING
CHAPTER LEARNING OBJECTIVES
1. Identify the features of managerial accounting and the functions of management. The
primary users of managerial accounting reports, issued as frequently as needed, are internal
users, who are officers, department heads, managers, and supervisors in the company. The
purpose of these reports is to provide special-purpose information for a particular user for a
specific decision. The content of managerial accounting reports pertains to subunits of the
business. It may be very detailed, and may extend beyond the accrual accounting system.
The reporting standard is relevance to the decision being made. No independent audits are
required in managerial accounting.
The functions of management are planning, directing, and controlling. Planning requires
management to look ahead and to establish objectives. Directing involves coordinating the
diverse activities and human resources of a company to produce a smooth-running
operation. Controlling is the process of keeping the activities on track.
2. Describe the classes of manufacturing costs and the differences between product and
period costs. Manufacturing costs are typically classified as either (1) direct materials, (2)
direct labor, or (3) manufacturing overhead. Raw materials that can be physically and directly
associated with the finished product during the manufacturing process are called direct
materials. The work of factory employees that can be physically and directly associated with
converting raw materials into finished goods is considered direct labor. Manufacturing
overhead consists of costs that are indirectly associated with the manufacture of the finished
product. Manufacturing costs are typically incurred at the manufacturing facility.
Product costs are costs that are a necessary and integral part of producing the finished
product. Product costs are also called inventoriable costs. These costs do not become
expenses until the company sells the finished goods inventory.
Period costs are costs that are identified with a specific time period rather than with a salable
product. These costs relate to nonmanufacturing costs and therefore are not inventoriable
costs. They are expensed as incurred.
3. Demonstrate how to compute cost of goods manufactured and prepare financial
statements for a manufacturer. Companies add the cost of the beginning work in process
inventory to the total manufacturing costs for the current year to arrive at the total cost of
work in process for the year. They then subtract the ending work in process inventory from
the total cost of work in process to arrive at the cost of goods manufactured.
The difference between a merchandising and a manufacturing balance sheet is in the current
assets section. The current assets section of a manufacturing company's balance sheet
12-2 Test Bank for Managerial Accounting, Ninth Edition
presents three inventory accounts: finished goods inventory, work in process inventory, and
raw materials inventory.
The difference between a merchandising and a manufacturing income statement is in the
cost of goods sold section. A manufacturing cost of goods sold section shows beginning and
ending finished goods inventories and the cost of goods manufactured.
4 Discuss trends in managerial accounting. Managerial accounting has experienced many
changes in recent years, including a shift toward service companies as well as emphasis on
ethical behavior. Improved practices include a focus on managing the value chain through
techniques such as just-in-time inventory, total quality management, activity-based costing,
and theory of constraints. The balanced scorecard is now used by many companies in order
to attain a more comprehensive view of the company's operations, and companies are now
evaluating their performance with regard to their corporate social responsibility. Finally, data
analytics and data visualizations are important tools that help businesses identify problems
and opportunities, and then make informed decisions
TRUE-FALSE STATEMENTS
1. Reports prepared in financial accounting are general-purpose reports while reports
prepared in managerial accounting are usually special-purpose reports.
Ans: T, LO: 1, Bloom: C, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: None, AICPA FC: Reporting, AICPA PC: Communication, IMA: Reporting
2. Managerial accounting information generally pertains to an entity as a whole and is highly
aggregated.
Ans: F, LO: 1, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: None, AICPA FC: Reporting, AICPA PC: Communication, IMA: Reporting
3. All forms of business organizations need managerial accounting information.
Ans: T, LO: 1, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: None, AICPA FC: Reporting, AICPA PC: Communication, IMA: Reporting
4. Determining the unit cost of manufacturing a product is an output of financial accounting.
Ans: F, LO: 1, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: None, AICPA FC: Measurement Analysis and Interpretation, AICPA PC:
None, IMA: FSA
5. Managerial accounting internal reports are prepared more frequently than financial
statements that are distributed externally.
Ans: T, LO: 1, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: None, AICPA FC: Reporting, AICPA PC: Communication, IMA: Reporting
6. The management function of organizing and directing is mainly concerned with setting
goals and objectives for the entity.
Ans: F, LO: 1, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Process and Resource Management Perspectives, AICPA FC: None, AICPA
PC: Leadership, IMA: Decision Analysis
7. The controller of a company is responsible for all of the accounting and finance issues a
company faces.
Ans: F, LO: 1, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Ethics, AICPA BB: None, AICPA FC: Reporting, AICPA PC: None, IMA: Reporting
8. Controlling is the process of determining whether planned goals are being met.
Ans: T, LO: 1, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Process and Resource Management Perspectives, AICPA FC: None, AICPA
PC: Leadership, IMA: Internal Controls
9. Decision-making is an integral part of the planning, directing, and controlling functions.
Ans: T, LO: 1, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Strategic Perspective, AICPA FC: None, AICPA PC: Leadership, IMA:
Decision Analysis

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