Week 1 Cost Acc

Exercise 1-23

1 . In the case provided in the question at hand , Maloney the divisional manager is exerting pressure on Miller the controller to infringe the accounting policy concerning the recognition of revenue . In such a stance Miller is in an ethical dilemma . On one side there is the direct of the manager , while on the other hand , there is the ethical principle of duty of care . Such ethical concept encompasses reporting faithfully to interested users in to safeguard their best interest . These users in this instance are the other management of

the organization . If Miller abides with the request of Maloney , window dressing will be carried out in to meet the budget is very harmful for the company , because it may lead to incorrect decisions . Therefore Miller should consider carefully the duty of care ethical principle before recording such revenue transaction

2 . If a direct is given to book the 200 ,000 sale , Miller should refrain from abiding with such request . This is done in light of the ethical principle outlined above . Miller ought to explain to Maloney that such transaction cannot be booked in advance in view of the accounting principle relevant to revenue recognition adopted by the organization . In case of any intimidation exerted by Maloney on Miller Miller should inform the executive management of Ramses Shoe Company in to ensure that such unethical pressure is hindered and manipulation of accounting figures is thus refrained . The accounting scandal of Enron and other similar scandals have led to increasing favoring of whistle blowers in the business and legal scenario

Exercise 2-27

1 . The manufacturing-sector encompasses the production of goods , which entails the transformation of raw materials into finished products through the manufacturing process . The merchandising-sector comprises the retail of the finished products manufactured in the production division to the client . In this respect under this sector no change is made in the form of the product . The service-sector is completely different because the commodity offered in the market is of an intangible nature . For instance , the recommendation provided by a financial analyst concerning an investment comprises a service , which cannot be touched and examined prior purchase

2 . Inventoriable costs as their name implies are expenditure that can be identified to a particular product or production process and are thus included in the stock valuation . In a nutshell inventoriable costs comprise expenditure in the manufacturing of the product or purchase of good in case of merchandising companies . Period costs , on the contrary are expenses that does not form part in the stock valuation and are written off as expenditure once incurred

3 . a . Inventoriable Costs - form part of the product sold

b . Inventoriable Costs - overheads that comprise part of the manufacturing division

c . Inventoriable Costs - directly related to service provided

d . Inventoriable Costs - directly relevant to product sold

e . Inventoriable Costs - equipment forming part of manufacturing

f . Period Costs - does not form part of the manufacturing area or product purchased

g . Inventoriable Costs - directly...