Page 762 - Accounting Principles (A Business Perspective)

18. Managerial accounting concepts/job costing

business decisions within the company, what additional information would you need? (Remember that the income
statement may be referred to using different terminology such as statement of earnings or statement of operations.)

Company Website

Hewlett Packard Http://www.hp.com

Intel Corporation Http://www.intel.com

IBM Http://www.ibm.com

Visit the following website for Wells Fargo (a financial institution) and locate its annual report:
http://www.wellsfargo.com
Review the annual report to gain a general understanding of the company's primary business segments and

products. Write a report addressing the following questions based on your research. What products or services are
provided by the company? How does the financial information provided in the annual report (focus on the income
statement) differ from financial information used for managerial accounting purposes? As a manager making
business decisions within the company, what additional information would you need? (Remember that the income
statement may be referred to using different terminology such as statement of earnings or statement of operations.)
Visit the following website for Home Depot (a retail organization) and locate its annual report:
http://www.homedepot.com

Review the annual report to gain a general understanding of the company's primary business segments and
products. Write a report addressing the following questions based on your research. What products or services are
provided by the company? How does the financial information provided in the annual report (focus on the income
statement) differ from financial information used for managerial accounting purposes? As a manager making
business decisions within the company, what additional information would you need? (Remember that the income
statement may be referred to using different terminology such as statement of earnings or statement of operations.)

Answers to self-test
True-false
False. Managerial accounting is for internal use by managers, not external use, and gives more detailed
information than financial accounting.
True. The motors are direct materials, and they are product costs.
False. Because bottling soft drinks is a process, the plant would not use job costing.
False. The answer is the opposite. The estimated total overhead is the numerator, and the expected level of

activity is the denominator.
False. Overhead can be applied to jobs during the period.
True. Selling and administrative expenses are part of period costs under both absorption and variable costing
methods.
Multiple-choice
b. Indirect materials are included under overhead.
a. Selling and administrative expenses are period costs for financial accounting purposes.

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