47) ) For each of the following, indicate whether the statement reflects managem
ID: 2518923 • Letter: 4
Question
47) ) For each of the following, indicate whether the statement reflects management accounting (MA) or financial accounting (FA). Annual reports must be audited by certified public accountants. Helps investors and creditors make decisions. Helps in planning and controlling operations. Provides information that affects employee behavior Are prepared using GAAP. 48) Indicate whether each of the following costs is a product cost or a period cost. A) B) C) D) E) F) G) H) direct materials used factory utilities salespersons' commissions salary of plant manager indirect materials used depreciation on store equipment indirect labor incurred advertising expense direct labor incurred factory machinery repairs and maintenance depreciation on factory machinery store supplies used plant insurance expired J) K) L) M)Explanation / Answer
PART-1)
1) Annual reports must be audited by certified public accountants..Financial accounting
2) Helps investors and creditors make investment decisions..Financial accounting
3) Helps in planning and controlling operations...Management accounting
4) Provides information that affects employee behviour...Management accounting
5) Are prepared using GAAP..Financial accounting
Explanation: Financial accounting disclose the right information to stakeholders to ensure they can make informed decisions whereas management accounting is confidential & limited to the internal management for the purposes of planning, controlling and making decisions.
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PART-2)
A
Direct material used
Product cost
B
Factory utilities
Product cost
C
Sales person commissions
Period cost
D
Salary of planat manager
Product cost
E
Indirect material used
Product cost
F
Depreciation on store equipment
Period cost
G
Indirect labor incurred
Product cost
H
Advertising expense
Period cost
I
Direct labor incurred
Product cost
J
factory machinery repair and maintenance
Product cost
K
Depreciation on factory machnery
Product cost
L
Store supples used
Period cost
M
Plant insurance expired
Product cost
Explanation: The product costs of direct labor, direct materials, and manufacturing overhead are also "inventoriable" costs, becuase these are the necessary costs of product manufacturing. Conversely, period costs are not a necessary part of the process of product manufacturing
A
Direct material used
Product cost
B
Factory utilities
Product cost
C
Sales person commissions
Period cost
D
Salary of planat manager
Product cost
E
Indirect material used
Product cost
F
Depreciation on store equipment
Period cost
G
Indirect labor incurred
Product cost
H
Advertising expense
Period cost
I
Direct labor incurred
Product cost
J
factory machinery repair and maintenance
Product cost
K
Depreciation on factory machnery
Product cost
L
Store supples used
Period cost
M
Plant insurance expired
Product cost
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