ACCT 201b Exam #1 Review (chapter 1)
Questions and Correct Answers 2026-
2027 Updated.
Managerial Accounting - Answer concerned with providing information to managers within an
organization so that they can formulate plans, control operations, and make decisions.
Direct Costs - Answer Costs that can be easily and conveniently traced to a specified cost
object.
indirect costs - Answer Costs that cannot be easily and conveniently traced to a specified cost
object.
classification of manufacturing costs - Answer direct materials, direct labor, manufacturing
overhead
Direct materials - Answer Raw materials that become an integral part of the finished product
and whose costs can be conveniently traced to it.
Direct Labor - Answer Labor costs that can be easily traced to individual units of product
(sometimes called touch labor).
Manufacturing Overhead - Answer Includes all manufacturing costs except direct materials
and direct labor. These costs cannot be readily traced to finished products (also called indirect
manufacturing cost, factory overhead, and factory burden).
1. Includes indirect materials that cannot be easily or conveniently traced to specific units of
product. 2. Includes indirect labor costs that cannot be easily or conveniently traced to specific
units of product.
Other examples of manufacturing overhead include: depreciation of manufacturing equipment,
utility costs, property taxes, and insurance premiums incurred to operate a manufacturing
facility.
Prime cost - Answer Direct materials cost plus direct labor cost.
Conversion cost - Answer Direct labor cost plus manufacturing overhead costs.
Classifications of nonmanufacturing costs - Answer selling and administrative costs
Questions and Correct Answers 2026-
2027 Updated.
Managerial Accounting - Answer concerned with providing information to managers within an
organization so that they can formulate plans, control operations, and make decisions.
Direct Costs - Answer Costs that can be easily and conveniently traced to a specified cost
object.
indirect costs - Answer Costs that cannot be easily and conveniently traced to a specified cost
object.
classification of manufacturing costs - Answer direct materials, direct labor, manufacturing
overhead
Direct materials - Answer Raw materials that become an integral part of the finished product
and whose costs can be conveniently traced to it.
Direct Labor - Answer Labor costs that can be easily traced to individual units of product
(sometimes called touch labor).
Manufacturing Overhead - Answer Includes all manufacturing costs except direct materials
and direct labor. These costs cannot be readily traced to finished products (also called indirect
manufacturing cost, factory overhead, and factory burden).
1. Includes indirect materials that cannot be easily or conveniently traced to specific units of
product. 2. Includes indirect labor costs that cannot be easily or conveniently traced to specific
units of product.
Other examples of manufacturing overhead include: depreciation of manufacturing equipment,
utility costs, property taxes, and insurance premiums incurred to operate a manufacturing
facility.
Prime cost - Answer Direct materials cost plus direct labor cost.
Conversion cost - Answer Direct labor cost plus manufacturing overhead costs.
Classifications of nonmanufacturing costs - Answer selling and administrative costs
