Chapter 15 Extra Credit Hide or show questions Calculator Mastery Problem: Introduction to Managerial Accounting Able Baker Charlie Company Charles Maxwell...

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Accounting

Chapter 15 Extra Credit

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Mastery Problem: Introduction to ManagerialAccounting
Able Baker Charlie Company
Charles Maxwell is starting a cheesecake bakery, Able Baker CharlieCompany, to produce and sell different flavored cheesecakes torestaurants and the general public. He has just begun his study ofaccounting, and is a bit confused about the many types of reportshe has read about and how they will help him run his business. Heasks you to help him clarify what the differences betweenmanagerial accounting and financial accounting are. He’s alsowondering how to set up his inventory, how to classify the costs ofhis business, and how to fill in some missing information.
Managerial vs. Financial
Select whether the following characteristics are most oftenassociated with managerial accounting or financialaccounting.
Primarily used for internal decision makingManagerial AccountingGenerally Accepted Accounting Principles (GAAP) must beusedFinancial Accounting Prepared statements usually pertain to thecompany as a whole rather than individual departments orproductsFinancial Accounting Information provided will often besubjective, such as estimated future resultsManagerial AccountingOften prepared on an as-needed basis rather than at fixedintervalsManagerial Accounting
Feedback
Review the differences between managerial andfinancial accounting, and how each type of accounting is used inthe organization and for management processes.
Cost Classification
Charles has provided some of the costs he expects to incur asfollows. Decide on the classifications that could be applied toeach of these costs using the table provided. The cost object ineach case is the cheesecake.
(Select "Yes" or "No" from the below dropdowns.)
CostProduct
CostPeriod
CostDirect
MaterialsDirect
LaborFactory
OverheadSelling
ExpenseAdministrative
ExpenseDirect
CostIndirect
CostPrime
CostConversion
CostEggs used to makecheesecakes Yes Baker’swages Yes Deliverydriverwages Yes Depreciationof officecomputers Yes Powerto run the cheesecakeovens Yes No President’ssalary Yes Salescommissions No Factorysupervisor salary Yes

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DIFFERENCE BETWEEN MANAGERIAL ACCOUNTING AND FINANCIAL ACCOUNTING In general financial accounting refers to the aggregation of accounting information into financial statements while managerial accounting refers to the internal processes used to account for business transaction There are a number of differences between financial and managerial accounting which fall into the following categories Aggregation Financial accounting reports on the results of an entire business Managerial accounting almost always reports at a more detailed level such as profits by product products line cutoners and geographic region Efficiency Financial accounting reports on the profitability and therefore the efficiency of a business whereas managerial accounting reports on specifically what is See Answer

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Chapter 15 Extra CreditHide or show questionsCalculatorMastery Problem: Introduction to ManagerialAccountingAble Baker Charlie CompanyCharles Maxwell is starting a cheesecake bakery, Able Baker CharlieCompany, to produce and sell different flavored cheesecakes torestaurants and the general public. He has just begun his study ofaccounting, and is a bit confused about the many types of reportshe has read about and how they will help him run his business. Heasks you to help him clarify what the differences betweenmanagerial accounting and financial accounting are. He’s alsowondering how to set up his inventory, how to classify the costs ofhis business, and how to fill in some missing information.Managerial vs. FinancialSelect whether the following characteristics are most oftenassociated with managerial accounting or financialaccounting.Primarily used for internal decision makingManagerial AccountingGenerally Accepted Accounting Principles (GAAP) must beusedFinancial Accounting Prepared statements usually pertain to thecompany as a whole rather than individual departments orproductsFinancial Accounting Information provided will often besubjective, such as estimated future resultsManagerial AccountingOften prepared on an as-needed basis rather than at fixedintervalsManagerial AccountingFeedbackReview the differences between managerial andfinancial accounting, and how each type of accounting is used inthe organization and for management processes.Cost ClassificationCharles has provided some of the costs he expects to incur asfollows. Decide on the classifications that could be applied toeach of these costs using the table provided. The cost object ineach case is the cheesecake.(Select "Yes" or "No" from the below dropdowns.)CostProductCostPeriodCostDirectMaterialsDirectLaborFactoryOverheadSellingExpenseAdministrativeExpenseDirectCostIndirectCostPrimeCostConversionCostEggs used to makecheesecakes Yes Baker’swages Yes Deliverydriverwages Yes Depreciationof officecomputers Yes Powerto run the cheesecakeovens Yes No President’ssalary Yes Salescommissions No Factorysupervisor salary Yes