BUS 215 FINAL EXAM – 100% correct answers.
How is managerial accounting information used? correct answers Planning, controlling, and
decision making
Why study managerial accounting correct answers Managerial accounting skills can be used
for any career, organization, and industry
CSR - Corporate Social Responsibility correct answers a concept whereby organizations
consider the needs of all stakeholders when making decisions
Direct Cost (under absorption costing) correct answers cost that can be easily and
conveniently traced to a specific cost object
Direct cost (under absorption) example correct answers Adidas' salary of sales manager in
Tokyo
Indirect cost (under absorption costing) correct answers cost that cannot be easily and
conveniently traced to a specific cost object
Indirect cost (under absorption) example correct answers Campbell soup's factory manager's
salary - because it's incurred as a consequence of running the entire factory
Product cost (under absorption) example correct answers All costs involved in acquiring or
making a product
3 types of product costs under absorption costing correct answers Direct materials, direct
labor, and manufacturing overhead
Direct materials correct answers Materials that become an integral part of a finished product
and whose costs can be conveniently traced to it.
Direct Labor correct answers factory labor costs that can be easily traced to individual units
of product
Manufacturing overhead correct answers all manufacturing costs except direct materials and
direct labor
Period cost (under absorption) example correct answers All the costs that are not product
costs
2 types of period costs under absorption costing correct answers Selling and administrative
costs
Selling costs correct answers all costs that are incurred to secure customer orders and get the
finished product or service into the hands of the customer
Administrative costs correct answers All executive, organizational, and clerical costs
associated with the general management of an organization rather than with manufacturing or
selling.
, Fixed cost (under absorption costing) correct answers Cost that remains constant, in total,
regardless of changes in the level of activity
Fixed cost (under absorption) example correct answers Nooksack expeditions rents a building
for $500/ month regardless of how many guests enter the building
Variable cost (under absorption costing) correct answers Varies, in total, in direct proportion
to changes in the level of activity
Variable cost (under absorption) example correct answers Nooksack expeditions provide
equipment fees per guest, more guests means more money
Cost behavior correct answers how a cost reacts to changes in the level of activity
Total cost = correct answers FC in total + (VC per unit/base * # units/base)
When would you use job costing versus when would you use process costing? correct
answers Job order costing is used where many different products, each with individual and
unique features, are produced each period
Process costing is used in industries that convert raw materials into homogeneous products
like bricks
Job cost sheet correct answers records the materials, labor, and manufacturing overhead costs
charged to that job
POHR = correct answers Estimated total manufacturing overhead cost / Estimated total
amount of the the allocation base
MOH applied to a specific job = correct answers POHR x allocation base used by a job
How costs flow through a job-costing system correct answers *picture in notes*
COGM = correct answers beginning WIP inventory + total manufacturing costs added to
production - ending WIP inventory
Advantages of Budgeting correct answers 1. Define goals and objectives
2. Think about and plan for the future
3. Means of allocating resources
4. Uncover potential bottlenecks
5. Coordinate activities
6. Communicate plans
Budgeted production units = correct answers budgeted unit sales + budgeted ending finished
goods inventory - budgeted beginning finished goods inventory
Budgeted RM purchases = correct answers RM needed for production + budgeted ending RM
inventory - budgeted beginning RM inventory
How is managerial accounting information used? correct answers Planning, controlling, and
decision making
Why study managerial accounting correct answers Managerial accounting skills can be used
for any career, organization, and industry
CSR - Corporate Social Responsibility correct answers a concept whereby organizations
consider the needs of all stakeholders when making decisions
Direct Cost (under absorption costing) correct answers cost that can be easily and
conveniently traced to a specific cost object
Direct cost (under absorption) example correct answers Adidas' salary of sales manager in
Tokyo
Indirect cost (under absorption costing) correct answers cost that cannot be easily and
conveniently traced to a specific cost object
Indirect cost (under absorption) example correct answers Campbell soup's factory manager's
salary - because it's incurred as a consequence of running the entire factory
Product cost (under absorption) example correct answers All costs involved in acquiring or
making a product
3 types of product costs under absorption costing correct answers Direct materials, direct
labor, and manufacturing overhead
Direct materials correct answers Materials that become an integral part of a finished product
and whose costs can be conveniently traced to it.
Direct Labor correct answers factory labor costs that can be easily traced to individual units
of product
Manufacturing overhead correct answers all manufacturing costs except direct materials and
direct labor
Period cost (under absorption) example correct answers All the costs that are not product
costs
2 types of period costs under absorption costing correct answers Selling and administrative
costs
Selling costs correct answers all costs that are incurred to secure customer orders and get the
finished product or service into the hands of the customer
Administrative costs correct answers All executive, organizational, and clerical costs
associated with the general management of an organization rather than with manufacturing or
selling.
, Fixed cost (under absorption costing) correct answers Cost that remains constant, in total,
regardless of changes in the level of activity
Fixed cost (under absorption) example correct answers Nooksack expeditions rents a building
for $500/ month regardless of how many guests enter the building
Variable cost (under absorption costing) correct answers Varies, in total, in direct proportion
to changes in the level of activity
Variable cost (under absorption) example correct answers Nooksack expeditions provide
equipment fees per guest, more guests means more money
Cost behavior correct answers how a cost reacts to changes in the level of activity
Total cost = correct answers FC in total + (VC per unit/base * # units/base)
When would you use job costing versus when would you use process costing? correct
answers Job order costing is used where many different products, each with individual and
unique features, are produced each period
Process costing is used in industries that convert raw materials into homogeneous products
like bricks
Job cost sheet correct answers records the materials, labor, and manufacturing overhead costs
charged to that job
POHR = correct answers Estimated total manufacturing overhead cost / Estimated total
amount of the the allocation base
MOH applied to a specific job = correct answers POHR x allocation base used by a job
How costs flow through a job-costing system correct answers *picture in notes*
COGM = correct answers beginning WIP inventory + total manufacturing costs added to
production - ending WIP inventory
Advantages of Budgeting correct answers 1. Define goals and objectives
2. Think about and plan for the future
3. Means of allocating resources
4. Uncover potential bottlenecks
5. Coordinate activities
6. Communicate plans
Budgeted production units = correct answers budgeted unit sales + budgeted ending finished
goods inventory - budgeted beginning finished goods inventory
Budgeted RM purchases = correct answers RM needed for production + budgeted ending RM
inventory - budgeted beginning RM inventory
