Cost Accounting Ch 1-4 Assigned Book Questions

Who are the customers of the cost accounting?

Managers are the customers of cost accounting.

Title: Internal Auditor

Responsibility: Ensures procurement rules are followed

Programmer costs for a new operating system

Research & Development

Title: Treasurer

Responsibility: Determines where to invest cash balances

Title: Cost Accountant

Responsibility: Evaluates costs of products

Title: Controller

Responsibility: Maintains accounting records

Title: CFO

Responsibility: Signs off on financial statements

Distinguish between the value chain, the supply chain, and the distribution chain.

Value Chain - activities that transform raw resources into goods/services. Supply Chain - sells goods/services to firm. Distribution Chain - buys/distributes goods/services from firm.

Identify three key financial managers in an organization and their major responsibilities.

CFO - Manages entire finance & accounting function Treasurer - Manages assets, works w/ banks ect. Controller - Plans/Designs information & incentive systems Internal Auditor - ensures compliance & provides consulting/auditing. Cost Accountant - records, measures, estimates, & analyzes costs.

Determining which plant to use for production is:

Cost for decision making

Providing cost information for financial reporting is:

Costs for inventory valuation

Identifying the best store in a chain is:

Costs for performance evaluation

Call center costs for support calls i

Customer Service

Costs of memory chips to make computers

Production

Salaries for employees working on new product designs

Design

Costs to ship computers to customers

Distribution

Explain the differences between financial accounting and cost accounting. Why are these differences important?

Financial accounting is designed to provide information about the firm to external users. Cost accounting systems are designed to provide information to internal users. Differences important because it affects the design of the systems. Financial accounting systems are based on standards or rules. This allows the user to compare the results of different firms. Managerial accounting systems do not require rules. Each firm is free to develop managerial accounting systems that best serve the needs of the decision makers.

How can cost accounting information together with a classification of activities into those that are value-added and those that are nonvalue-added help managers improve an organization's performance?

Managers seek to identify & eliminate nonvalue - added activities. This can consequently reduce selling price or increase profits.

Costs to purchase advertising at university stores

Marketing

Does the passage of Sarbanes-Oxly mean that codes of ethics are no longer necessary?

No, Sox is law, but ethics is based on behavior. Having a code of ethics is still relevant.