One difference between financial and managerial accounting is that the external users that use financial information must plan a company's future, but the internal users of managerial accounting information generally must decide whether to invest in or lend to a company. Answer True False Newly completed units are combined with beginning finished goods inventory to make up total ending goods in process inventory.Direct costs are incurred for the benefit of more than one cost object.Cost concepts such as variable, fixed, mixed, direct and indirect apply only to manufacturers and not to service companies.When the attitude of continuous improvement exists throughout an organization, every manager and employee seeks to continuously experiment with new and improved business practices.

The management concept of customer orientation causes a company to spend large amounts on advertising to convince customers to buy the company's standard products. Period costs are incurred by purchasing merchandise or manufacturing finished goods. Answer True False Although direct labor and raw materials costs are treated as manufacturing costs and therefore make up part of the finished goods inventory cost, factory overhead is charged to expense as it is incurred because it is a period cost. Answer True False Direct materials are not usually easily traced to a product. A manufacturer's cost of goods manufactured is the sum of direct materials, direct labor, and factory overhead costs incurred in producing products.