Managerial Accounting
3rd Edition
ISBN: 9780077826482
Author: Stacey M Whitecotton Associate Professor, Robert Libby, Fred Phillips Associate Professor
Publisher: McGraw-Hill Education
expand_more
expand_more
format_list_bulleted
Concept explainers
Videos
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.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Please do not give solution in image format ?
You have been employed as a cost accountant by Pared Inc. The president, I.M. Pared, is having a hard time understanding the flow of costs through the cost accounting system. Beginning with the purchase of material and ending with the transfer to cost of goods sold briefly flow chart (draw) and describe (write out) how the costs will travel through the cost accounting system
explain this for me?
Convert
Insert
MANAGEMENT SCIENCE
ASSESSMENT TASKS
PROBLEM 1.
For each of the following costs, indicate whether the cost would be an out-of-pocket carrying cost (C), or a cost of
placing an order (P). If the item does not qualify for either of these categories, note that it as none of the above (N)
Assume that wages vary with the level of work while salaries are fixed for a monthly or longer time period.
1. Hourly fee for inventory audit.
2 Salary of purchasing supervisor.
3. Costs to audit purchase orders and invoices, on a per-order basis.
4. Taxes on inventory.
5. Stockout costs.
6. Storage costs charged per unit in inventory.
7. Fire insurance on inventory.
8. Fire insurance on warehouse.
9. Obsolescence costs on inventory. |
10. Shipping costs per shipment.
PROBLEM 2
The Strawberry Bread Company buys and then sells (as bread) 2.6 million bushels of wheat annually. The wheat must
be purchased in multiples of 2,000 bushels. Ordering costs, which include grain elevator removal…
Chapter 1 Solutions
Managerial Accounting
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...
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- What will you use to allocate the cost of the purchasing department? a.Number of purchase orders generated b.Number of machines c.None of the answers are correct d.Number of employeesarrow_forwardPLEASE I NEED FROM THE COGM SCHEDULE: BEGGINING WORK IN PROCESS INVENTORY TOTAL MANUFACTURING COSTST O ACCOUNT FOR AND COST OF GOODS MANUFACTURED I just asked this question a while ago and Idk from where they took a different data to sole the problem. please check the data before giving back an answer because it seem that the prevoius person took the answers from a similar problem without checking if the info matches with the question that I am aking for. Thank youarrow_forwardPlease explain your answer why your options is correct and why other options is not correctarrow_forward
- Don't give solution in image format..arrow_forwardWhat are the most important factors tor instolling a cost accounting system? O The Industry in which business is operating. O Obtaining the complete knowiedge of the production process. O The lowest installation price is a good reoson tor installing the cost accounting system. O Inatypical business organisation accounts department needs to satisty bank requirements while installing o cost system. O Cost apportionment can be done on the basis that can be easily changed to save the cost. O Costing system should fultil the requirement of difforent level of manogement. O Nature of product determines the type of costing system to be implemented. O The costing system should repeat the same system as the mojor competitor has.arrow_forwardDarrow_forward
- 26. Which of the following sentence not related to ‘purchasing by requirement’? a.Purchasing goods, which are not regularly required. b.Market situation is constantly studied. c.Purchase of emergency goods. d.Knowledge of the suppliers of such goods. 28. Identify the journal entry for normal wastage. a.Dr.Material inventory, Cr.Work in process inventory b.Dr.Material inventory, Cr.Production overheads c.Dr.Costing profit and loss account, Cr.Work in process inventory d.Dr.Production overheads, Cr.Work in process inventoryarrow_forward(c) Which of the following statements are true? (You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer. Any boxes left with a question mark will be automatically graded as incorrect.) If a customer orders more frequently, but orders the same total number of units over the course of a year, the customer margin under activity based costing will decrease. If a customer orders more frequently, but orders the same total number of units over the course of a year, the product margin under a traditional costing system will decrease. k nt If a customer orders more frequently, but orders the same total number of units over the course of a year, the customer margin under activity based costing will be unaffected. ences If a customer orders more frequently, but orders the same total number of units over the course of a year, the product margin…arrow_forwardnot use ai please don'tarrow_forward
- good morning, I ask help with this preblem in the photos. I also ask if you can explain me how the COGS and finished good cost are computed? with all the precise steps(please!). thank you very much. ps. this exercise is also on this website, but i still don't get how the Cogs and finished goods cost are computed (from "fundamental of cost accounting" 6th ed., CH.7 problem: 22E).arrow_forwardPlease do not give solution in image format thankuarrow_forwardWrite “TRUE” if the statement is true, “FALSE” if the statement is false. _____1. One purpose of a JIT inventory system is to have goods ready just when the customerneeds them. _____2. Under JIT, materials are “pushed” from one workstation to another to ensure timely completion of finished products. _____3. A company will typically have fewer suppliers under JIT than a traditional system. _____4. The most effective way to achieve total quality control is to have an InspectionDepartment that inspects all incoming raw materials, and inspects goods as they movealong the product flow line. _____5. The predetermined overhead rate is an amount obtained by dividing the total overheadfor the past period by the total overhead allocation base for the coming period. _____6. When the underapplied overhead is assigned to Cost of Goods Sold the effect is toincrease the balance on the Cost of Goods Sold account. _____7. Overapplied overhead occurs when actual overhead is less than applied overhead.…arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Managerial AccountingAccountingISBN:9781337912020Author:Carl Warren, Ph.d. Cma William B. TaylerPublisher:South-Western College Pub
Financial And Managerial AccountingAccountingISBN:9781337902663Author:WARREN, Carl S.Publisher:Cengage Learning,
Principles of Accounting Volume 2AccountingISBN:9781947172609Author:OpenStaxPublisher:OpenStax College
Principles of Cost AccountingAccountingISBN:9781305087408Author:Edward J. Vanderbeck, Maria R. MitchellPublisher:Cengage Learning
Excel Applications for Accounting PrinciplesAccountingISBN:9781111581565Author:Gaylord N. SmithPublisher:Cengage Learning
Auditing: A Risk Based-Approach (MindTap Course L...AccountingISBN:9781337619455Author:Karla M Johnstone, Audrey A. Gramling, Larry E. RittenbergPublisher:Cengage Learning
Managerial Accounting
Accounting
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:South-Western College Pub
Financial And Managerial Accounting
Accounting
ISBN:9781337902663
Author:WARREN, Carl S.
Publisher:Cengage Learning,
Principles of Accounting Volume 2
Accounting
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax College
Principles of Cost Accounting
Accounting
ISBN:9781305087408
Author:Edward J. Vanderbeck, Maria R. Mitchell
Publisher:Cengage Learning
Excel Applications for Accounting Principles
Accounting
ISBN:9781111581565
Author:Gaylord N. Smith
Publisher:Cengage Learning
Auditing: A Risk Based-Approach (MindTap Course L...
Accounting
ISBN:9781337619455
Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
Publisher:Cengage Learning
INVENTORY & COST OF GOODS SOLD; Author: Accounting Stuff;https://www.youtube.com/watch?v=OB6RDzqvNbk;License: Standard Youtube License