ACC 241 exam 1 study questions with
complete solutions
Managerial Accounting
focuses on internal decision-making
Who are the internal and external users of accounting information?
Internal users include managers and employees, while external users include investors,
creditors, and regulatory agencies.
What are the three major responsibilities of a manager?
Planning, Decision Making, and Controlling.
Define direct and indirect costs
Direct costs are traceable to a specific product (e.g., raw materials, direct labor), while indirect
costs are shared across multiple products (e.g., factory rent, utilities).
What is the difference between product costs and period costs?
Product costs (DM, DL, MOH) are associated with making a product and go into inventory, while
period costs (SG&A expenses) are expensed in the period incurred.
, What are the three classifications of manufacturing costs?
Direct materials (DM), Direct labor (DL), and Manufacturing Overhead (MOH).
Direct Materials
Materials that become an integral part of a finished product and whose costs can be
conveniently traced to it.
Direct Labor
the work of factory employees that can be physically and directly associated with converting
raw materials into finished goods
Manufacturing Overhead
all manufacturing costs except direct materials and direct labor
What are prime costs and conversion costs?
Prime costs = Direct Materials + Direct Labor. Conversion costs = Direct Labor + Manufacturing
Overhead.
What is the formula for Cost of Goods Manufactured (COGM)?
COGM = Direct Materials Used + Direct Labor + Manufacturing Overhead + Beginning WIP
Inventory - Ending WIP Inventory.
complete solutions
Managerial Accounting
focuses on internal decision-making
Who are the internal and external users of accounting information?
Internal users include managers and employees, while external users include investors,
creditors, and regulatory agencies.
What are the three major responsibilities of a manager?
Planning, Decision Making, and Controlling.
Define direct and indirect costs
Direct costs are traceable to a specific product (e.g., raw materials, direct labor), while indirect
costs are shared across multiple products (e.g., factory rent, utilities).
What is the difference between product costs and period costs?
Product costs (DM, DL, MOH) are associated with making a product and go into inventory, while
period costs (SG&A expenses) are expensed in the period incurred.
, What are the three classifications of manufacturing costs?
Direct materials (DM), Direct labor (DL), and Manufacturing Overhead (MOH).
Direct Materials
Materials that become an integral part of a finished product and whose costs can be
conveniently traced to it.
Direct Labor
the work of factory employees that can be physically and directly associated with converting
raw materials into finished goods
Manufacturing Overhead
all manufacturing costs except direct materials and direct labor
What are prime costs and conversion costs?
Prime costs = Direct Materials + Direct Labor. Conversion costs = Direct Labor + Manufacturing
Overhead.
What is the formula for Cost of Goods Manufactured (COGM)?
COGM = Direct Materials Used + Direct Labor + Manufacturing Overhead + Beginning WIP
Inventory - Ending WIP Inventory.
