Chapter 14: Serial Problem

This is quite an extensive set of questions and exercises covering multiple topics in managerial accounting. Here’s an outline on how to address each part: SP 14 - Manufacturing Costs for Business Solutions 1. Classifying Manufacturing Costs: o Determine if each cost is direct or indirect based on its association with production. For example, direct costs are directly traceable to the product, like materials and labor, whereas indirect costs, like factory rent or indirect materials, support production in general. 2. Schedule of Cost of Goods Manufactured (COGM): o Construct a schedule for January, showing beginning and ending inventory, direct materials used, direct labor, and manufacturing overhead. Add these to get the total manufacturing costs, then calculate the cost of goods manufactured by adjusting for work in process inventory. 3. Cost of Goods Sold (COGS) on Income Statement: o Use the COGM from part 2 and include it in the income statement, starting with beginning finished goods inventory, adding COGM, and subtracting ending finished goods inventory to arrive at COGS. 4. Tableau Dashboard Activities: o Activities like DA 14-1 to DA 14-3 require using Tableau for visual analytics, where you compute direct materials, analyze cost classification, and create schedules based on data. Accounting Analysis 1. Raw Materials Inventory Turnover for Apple: o This ratio measures efficiency in raw materials use and is calculated as (Cost of Goods Sold / Average Inventory). Compare turnover across two years to determine if the change is favorable or unfavorable. 2. Comparative Analysis of Apple and Google: o Similarly, compute and compare the inventory turnover for both Apple and Google for recent years. Then compare each to the industry average of 40 to determine if performance aligns with or exceeds industry standards. Extended Analysis 1. Days’ Sales in Raw Materials Inventory: o For Samsung and Apple, calculate days’ sales in inventory to assess how long they hold inventory before it’s used in production. This is found by (Ending Inventory / Cost of Sales) x 365. Discussion Questions These cover key concepts in managerial accounting: 1. Role of Managerial Accountants: o They support decision-making by providing detailed cost data, budgeting, and performance evaluations. 2. Differences Between Managerial and Financial Accounting: o Differences include purpose, user focus, reporting flexibility, and time dimension. 3. Cost Classifications: o Differentiate direct vs. indirect materials and labor, factory overhead vs. selling/admin expenses, and types of manufacturing costs. 4. Examples of Factory Overhead and Schedule Components: o Provide specific examples of manufacturing costs and overhead items in Apple’s manufacturing processes. Beyond the Numbers 1. Ethics Challenge: o Discuss correct accounting treatment for raw material purchases (record as an inventory asset rather than an expense). Also, address the ethical considerations in managing tax liabilities. 2. Communicating in Practice: o Write a memorandum detailing salary expectations for different business fields, including accounting, marketing, and finance. 3. Teamwork in Action: o Break down team tasks to compute direct materials, factory overhead, manufacturing costs, and net income for collaborative understanding. Entrepreneurial Decision 1. Cost of Goods Sold for Merchandiser: o Explain how merchandisers calculate COGS (Beginning Inventory + Purchases - Ending Inventory). For Sweet Tea Cosmetics, Teanna should monitor purchase costs, storage, and potential markdowns. 2. Total Quality Management (TQM) Goals: o Goals include customer satisfaction, continuous improvement, defect reduction, and employee engagement. If Sweet Tea Cosmetics manufactures products, TQM can enhance quality control and operational efficiency. Let me know if you’d like specific help with any part of the calculations, or further detail on any question!