ACG 4341 Cost & Managerial Accounting
Full Finals Exam Review (Qns & Ans)
2025
1. Multiple Choice
A company incurs the following costs: direct materials $50,000,
direct labor $30,000, and manufacturing overhead $20,000. What
is the total prime cost?
A. $50,000
B. $80,000
C. $100,000
D. $30,000
ANS: B. $80,000
©2025
, Rationale: Prime costs include direct materials and direct labor.
Total prime cost = $50,000 (direct materials) + $30,000 (direct
labor) = $80,000.
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2. Fill-in-the-Blank
_ costs are those that vary in total directly and proportionately
with changes in the level of activity.
ANS: Variable
Rationale: Variable costs fluctuate with the level of activity,
such as raw materials or direct labor.
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3. True/False
Contribution margin is the amount remaining after variable costs
have been deducted from sales revenue.
ANS: True
©2025
, Rationale: Contribution margin is calculated as sales revenue
minus variable costs and contributes to covering fixed costs and
profit.
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4. Multiple Response
Which costs are considered period costs in managerial
accounting? (Select all that apply.)
A. Administrative salaries
B. Factory rent
C. Marketing expenses
D. Office supplies
ANS: A, C, D
Rationale: Period costs include expenses not tied to
manufacturing, such as administrative and marketing costs, while
factory rent is a product cost.
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5. Multiple Choice
©2025
, A company wants to compute its breakeven sales in dollars.
Which formula should it use?
A. Fixed Costs ÷ Contribution Margin per Unit
B. Total Sales ÷ Total Expenses
C. Fixed Costs ÷ Contribution Margin Ratio
D. Variable Costs ÷ Fixed Costs
ANS: C. Fixed Costs ÷ Contribution Margin Ratio
Rationale: Breakeven sales in dollars are calculated by dividing
fixed costs by the contribution margin ratio.
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6. Fill-in-the-Blank
The _ method allocates overhead costs to products based on
multiple cost drivers rather than a single predetermined rate.
ANS: Activity-based costing (ABC)
Rationale: ABC uses multiple cost drivers to allocate overhead
more accurately compared to traditional methods.
---
©2025
Full Finals Exam Review (Qns & Ans)
2025
1. Multiple Choice
A company incurs the following costs: direct materials $50,000,
direct labor $30,000, and manufacturing overhead $20,000. What
is the total prime cost?
A. $50,000
B. $80,000
C. $100,000
D. $30,000
ANS: B. $80,000
©2025
, Rationale: Prime costs include direct materials and direct labor.
Total prime cost = $50,000 (direct materials) + $30,000 (direct
labor) = $80,000.
---
2. Fill-in-the-Blank
_ costs are those that vary in total directly and proportionately
with changes in the level of activity.
ANS: Variable
Rationale: Variable costs fluctuate with the level of activity,
such as raw materials or direct labor.
---
3. True/False
Contribution margin is the amount remaining after variable costs
have been deducted from sales revenue.
ANS: True
©2025
, Rationale: Contribution margin is calculated as sales revenue
minus variable costs and contributes to covering fixed costs and
profit.
---
4. Multiple Response
Which costs are considered period costs in managerial
accounting? (Select all that apply.)
A. Administrative salaries
B. Factory rent
C. Marketing expenses
D. Office supplies
ANS: A, C, D
Rationale: Period costs include expenses not tied to
manufacturing, such as administrative and marketing costs, while
factory rent is a product cost.
---
5. Multiple Choice
©2025
, A company wants to compute its breakeven sales in dollars.
Which formula should it use?
A. Fixed Costs ÷ Contribution Margin per Unit
B. Total Sales ÷ Total Expenses
C. Fixed Costs ÷ Contribution Margin Ratio
D. Variable Costs ÷ Fixed Costs
ANS: C. Fixed Costs ÷ Contribution Margin Ratio
Rationale: Breakeven sales in dollars are calculated by dividing
fixed costs by the contribution margin ratio.
---
6. Fill-in-the-Blank
The _ method allocates overhead costs to products based on
multiple cost drivers rather than a single predetermined rate.
ANS: Activity-based costing (ABC)
Rationale: ABC uses multiple cost drivers to allocate overhead
more accurately compared to traditional methods.
---
©2025
