and motivating Controlling Decision making.
b. Financial Accounting must follow GAAP/ASPE/IFRS and summary data concerning the entire
organization. Managerial Accounting need snot follow GAAP/ASPE/IFRS and emphasizes detailed
segment reports about departments, products, and customers.
c. Financial Accounting emphasizes objectivity and verifiability and precision. Managerial Accounting is
focused on relevance and timeliness. (answers may vary)
References
Short Answer Difficulty: Medium Learning Objective: 01-03 Explain the basic
concept of enterprise risk management.
48.
Award: 10.00 points
49.
Award: 10.00 points
How much it costs a company to manufacture a particular product is one of the many questions that
reports typically provided by managerial accountants help to answer.
Required:
Comment on the usefulness of a unit product cost information in the preparation of a set of financial
statements?
Unlike a merchandising company, a manufacturing company must calculate the average unit cost of
each product it manufactures. As it will be demonstrated in subsequent chapters of the book, this
number is essentially the sum of the cost of all the factors of production incurred (that is, raw materials,
labour, and capital) divided by the total output. The resulting unit product cost information is not only
useful but essential in calculating the cost of units of the product sold required for preparing an income
statement and the cost of units of the product not sold (to be reported among the assets on the balance
sheet as ending inventory).
References
Short Answer Difficulty: Hard Learning Objective: 01-01 Describe the
functions performed by managers.
Provide three examples of common business risks faced by companies.
Some examples of common business risks include: (1) losing market share to competitors; (2) Web site
malfunctioning; (3) employees stealing assets or accessing unauthorized information; and (4) inaccurate
budget estimates causing operational problems such as excessive inventory levels or inventory
shortages.
References
Short Answer Difficulty: Medium Learning Objective: 01-03 Explain the basic
concept of enterprise risk management.