5. What does the statement “costs can be assets or expenses” mean? 6. Why are the salaries of production workers accumulated in an inventory account instead of being expensed on the income statement? 7. How do product costs affect the financial statements? How does the classification of product cost (as an asset vs. an expense) affect net income?
| Business Applications Case
| Financial versus managerial accounting
| The following information was taken from the 2008 and 2009 Form 10-Ks for Dell, Inc.Required a. Explain whether each line of information in the table above would best be described as being primarily financial accounting or managerial accounting in nature. b. Provide some additional examples of managerial and financial accounting information that could apply to Dell. c. If you analyze only the data you identified as financial in nature, does it appear that Dell's 2009 fiscal year was better or worse than its 2008 fiscal year? Explain. d. If you analyze only the data you identified as managerial in nature, does it appear that Dell's 2009 fiscal year was better or worse than its 2008 fiscal year? Explain
10. How is the relevant range of activity related to fixed and variable cost? Give an example of how the definitions of these costs become invalid when volume is outside the relevant range. 12. When would the high-low method be appropriate for estimating variable and fixed costs? When would least-squares regression be the most desirable? 13. Which cost structure has the greater risk? Explain.
6. When would the customer be willing to pay a premium price for a product or service? What pricing strategy would be appropriate under these circumstances? 7. What are three alternative approaches to determine the break-even point? What do the results of these approaches show? 8. What is the equation method for determining the break-even point? Explain how the results of this method differ from those...
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