gerial For each of the following indicate whether the statem

gerial For each of the following, indicate whether the statement relates to mana accounting (MA) or financial accounting (FA) Problem 1: (5 points) Applies to MA or FA tatement fow reports will afect mloyeebehavior aFA concen Summary reports are prepared primarily on the company as a whole, usually on a Relevant information and focus on the ture. ry users include investors, creditors, d government authorities. ere is no requirement to follow GAAP Problem 2. (10 points) The following information relates to Wagner, Inc.: $10,600 17,600 Advertising Costs Administrative Salaries Delivery Vehicle Depreciation Factory Repair and Maintenance ndirect Labor direct Materials 10,500 10,000 anufacturing Equipment Depreciation fice Rent 1000 51,0 2500 530,000 4700 ident\'s Salary Sales Revenue Sales Salary How much were Wagner\'s period costs? low much were Wagner\'s product costs?

Solution

Problem 1:

How reports will affect an employee behavior is a concern: Manaagement Accounting(Management accounting reporting and recording of internal information, which could help employees to take appropriate decisions in their day to day performance of duty)

Summary reports are prepared primarily on the company as a whole, usually on a quarterly or annual basis: Financial Accoounting(Financial accounting prepares information statement on overall performance of the organisation through financial statements, and is generally prepared for a certain period).

Relevant information and focus on the future: Management Accounting(Management account deals with info from within the organisation and is focussed on to preparation of budgets and tools for taking future decisions by the management)

Primary users include investors, creditors, and government authority: Financial Accounting(Financial accounting information is primarily used for its stakeholders, who can use the information to make judgements and analysis of the company. The most important being the investors creditors whether to make investment into the company or not, and govt needs info for appropriate tax calculation)

There is no requirement to follow GAAP: Management Accounting (Financial accounting is required to follow standards and practices like GAAP and IFRS, management accounting is prepared for internal purpose, so no mandation from the govt.)

Period cost is the recording of costs which are not directly responsible for the production of goods.

Wagner\'s period cost = 10,600 (Administrative cost) + 17600(Administrative salaries) + 1300(delivery vehicle depreciation+51000(Office rent) +2500(president salary) + 4700 (Sales Salary) = $87,700

Wagner\'s Product cost = 200 (Factory repairs and maintenance)+ 10500(Indirect labour) + 10,000(Indirect materials)+ 1000(Manufacturing equipmeent depreciation) = $21,700