ACC 241 FINAL EXAM UPDATED QUESTIONS AND
ANSWERS SURE A+
✔✔Prime costs - ✔✔Includes DL and DM.
✔✔Conversion costs - ✔✔Includes MOH and DL.
✔✔Fringe benefits are expensed as what? - ✔✔Expensed as period costs for non-
manufacturing employees.
✔✔All inventoriable costs should what? - ✔✔Should stay in the inventory until it is sold
which then becomes cogs.
✔✔Cost of goods manufactured - ✔✔Cost of goods that were completed and moved
into finished goods.
✔✔Differential costs - ✔✔The difference of costs between 2 alternatives.
✔✔Direct labor is treated as what kind of cost? - ✔✔Variable cost.
✔✔MOH includes what kind of costs? - ✔✔Variable and fixed costs.
✔✔What is the formula to calculate total cost? - ✔✔TOTAL FIXED COST + (VARIABLE
COST PER UNIT X NUMBER OF UNITS)
✔✔The average cost per unit is not for predicting what? - ✔✔The total costs at different
level of outputs.
✔✔What is the formula to calculate total inventoriable costs? - ✔✔DL + DM + MOH
✔✔What is the formula to calculate DM used? - ✔✔Beginning raw materials
+ Purchases of DM
= Materials available for use
- Ending raw materials
= DM used
✔✔What is the formula to calculate cost of goods manufactured? - ✔✔Beginning WIP
+ DL
+ DM
+ MOH
= Total manufacturing costs
- Ending WIP
= Cost of goods manufactured
, ✔✔What is the formula to calculate COGS? - ✔✔Beginning FG
+ Cost of goods manufactured
= Cost of goods available
- Ending FG
= COGS
✔✔Mixed costs includes what? - ✔✔Consists of fixed cost and a variable component.
✔✔Step costs - ✔✔Doesn't change steadily with changes in activity volume but rather
at discrete points.
✔✔For a merchandising company, how do they arrive at operating income? - ✔✔Sales
+ COGS
= Gross profit
- Operating expense
= Operating income
✔✔For a merchandising company, how do they arrive at cogs? - ✔✔Beginning
inventory
+ import duties/tariffs
+ purchases
+ freight in
= Cost of goods available for use
- Ending inventory
= Cogs
✔✔For a manufacturing company, how do they arrive at operating income? - ✔✔Sales
- COGS
= Gross profit
- Operating expense
= Operating income
✔✔Process costing - ✔✔Used by companies that produce a large number of identical
products through a series of uniform steps.
✔✔Job costing - ✔✔Used by companies that produce unique custom-ordered products.
✔✔What is the formula to calculate the predetermined overhead rate? - ✔✔TOTAL
ESTIMATED MOH COSTS/TOTAL ESTIMATED ALLOCATION BASE
✔✔What is the formula to allocate MOH to individual jobs? - ✔✔POHR X ACTUAL
TOTAL ALLOCATION BASE
✔✔Management will use job cost information for what? - ✔✔- Control costs
- Improve efficiency
ANSWERS SURE A+
✔✔Prime costs - ✔✔Includes DL and DM.
✔✔Conversion costs - ✔✔Includes MOH and DL.
✔✔Fringe benefits are expensed as what? - ✔✔Expensed as period costs for non-
manufacturing employees.
✔✔All inventoriable costs should what? - ✔✔Should stay in the inventory until it is sold
which then becomes cogs.
✔✔Cost of goods manufactured - ✔✔Cost of goods that were completed and moved
into finished goods.
✔✔Differential costs - ✔✔The difference of costs between 2 alternatives.
✔✔Direct labor is treated as what kind of cost? - ✔✔Variable cost.
✔✔MOH includes what kind of costs? - ✔✔Variable and fixed costs.
✔✔What is the formula to calculate total cost? - ✔✔TOTAL FIXED COST + (VARIABLE
COST PER UNIT X NUMBER OF UNITS)
✔✔The average cost per unit is not for predicting what? - ✔✔The total costs at different
level of outputs.
✔✔What is the formula to calculate total inventoriable costs? - ✔✔DL + DM + MOH
✔✔What is the formula to calculate DM used? - ✔✔Beginning raw materials
+ Purchases of DM
= Materials available for use
- Ending raw materials
= DM used
✔✔What is the formula to calculate cost of goods manufactured? - ✔✔Beginning WIP
+ DL
+ DM
+ MOH
= Total manufacturing costs
- Ending WIP
= Cost of goods manufactured
, ✔✔What is the formula to calculate COGS? - ✔✔Beginning FG
+ Cost of goods manufactured
= Cost of goods available
- Ending FG
= COGS
✔✔Mixed costs includes what? - ✔✔Consists of fixed cost and a variable component.
✔✔Step costs - ✔✔Doesn't change steadily with changes in activity volume but rather
at discrete points.
✔✔For a merchandising company, how do they arrive at operating income? - ✔✔Sales
+ COGS
= Gross profit
- Operating expense
= Operating income
✔✔For a merchandising company, how do they arrive at cogs? - ✔✔Beginning
inventory
+ import duties/tariffs
+ purchases
+ freight in
= Cost of goods available for use
- Ending inventory
= Cogs
✔✔For a manufacturing company, how do they arrive at operating income? - ✔✔Sales
- COGS
= Gross profit
- Operating expense
= Operating income
✔✔Process costing - ✔✔Used by companies that produce a large number of identical
products through a series of uniform steps.
✔✔Job costing - ✔✔Used by companies that produce unique custom-ordered products.
✔✔What is the formula to calculate the predetermined overhead rate? - ✔✔TOTAL
ESTIMATED MOH COSTS/TOTAL ESTIMATED ALLOCATION BASE
✔✔What is the formula to allocate MOH to individual jobs? - ✔✔POHR X ACTUAL
TOTAL ALLOCATION BASE
✔✔Management will use job cost information for what? - ✔✔- Control costs
- Improve efficiency
