Reference no: EM132979472

CASE - Alzokzay is planning to open new production line in Kabul, where they are going to produce variety of juices. They are hiring staff for the production unit like workers, cost accountants, production manager and managerial accountants. You are interested in the position of managerial accountant as they are offering good package. After your submitting application for the position you are called for an interview. In order to impress the interviewers, you are required to provide effective answers for the following questions asked during interview:

1. Ohmie Manufacturing has beginning raw materials inventory $12,000, ending raw materials inventory $15,000, raw materials purchases $170,000, Insurance in transit $2,000, Return of raw material $ 3,000, purchase discount $ 3,000, and transportation $10,000. What is the cost of direct materials used?

2. Why is manufacturing overhead considered an indirect cost of a unit of product? Explain with help of appropriate example.

3. How does the content of reports and the verification of reports differ between managerial and financial accounting?

4. If management chooses to reduce its selling price to match that of a competitor, how will the break-even point be affected?

5. William claims that the distinction between direct and indirect materials is based entirely on physical association with the product. Is William correct? Why?

6. Company A's costs are mostly variable, whereas Company B's costs are mostly fixed. When sales increase, which company will tend to realize the greatest increase in profits? Explain.