Answer the Following Questions Using the Information Below:
Globe Inc

question 69

Multiple Choice

Answer the following questions using the information below:
Globe Inc. is a distributor of DVDs. DVD Mart is a local retail outlet which sells blank and recorded DVDs. DVD Mart purchases tapes from Globe at $25.00 per DVD; DVDs are shipped in packages of 60. Globe pays all incoming freight, and DVD Mart does not inspect the DVDs due to Globe's reputation for high quality. Annual demand is 312,000 DVDs at a rate of 6,000 DVDs per week. DVD Mart earns 15% on its cash investments. The purchase-order lead time is one week. The following cost data are available:
$\begin{array} { l } \text { Relevant ordering costs per purchase order}&\$114.50 \\ \text {arrying costs per package per year: }& \\ \text {Relevant insurance, materials handling, }& \\ \text {breakage, etc., per year }&\$4.50 \\\end{array}$

-What are the relevant total costs?

• A) $14,279
• B) $18,114
• C) $16,531
• D) $14,278

Understand the role and objectives of managerial accounting.

Distinguish between financial accounting and managerial accounting.

Identify the components of managerial accounting reports and their characteristics.

Recognize and categorize the manufacturing costs including direct materials, direct labor, and factory overhead.

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Definitions:

Double-entry Bookkeeping

An accounting system that records each transaction in two accounts, debits in one and credits in another, to maintain the balance of the accounting equation.

Assets and Liabilities

A financial accounting term referring to a company's resources (assets) and obligations (liabilities).

Bookkeeping Accounts

The records of the financial transactions and positions of a business, systematically organized for reporting and analysis.

Double-entry Bookkeeping

An accounting practice where every financial transaction is entered as both a debit in one account and an equivalent credit in another, ensuring the books are always balanced.