ACC 241 Exam 1 questions and
correct answers
Planning, directing, and controlling are a manager's three primary responsibilities - correct
answer ✔✔ True
In the manufacturing firm, manufacturing costs and product costs are the same - correct answer
✔✔ True
If the finished goods inventory decreases between the beginning and the end of a period, then
the cost of goods manufactured for the period is larger than the cost of goods sold - correct
answer ✔✔ False
A plant-wide overhead rate is calculated by dividing the estimated total manufacturing
overhead costs for the year by estimated total amount of the allocation base for the year -
correct answer ✔✔ True
Claire Corporation allocates (applies) Overhead based on direct labor hours. Here is selected
data from the Jacob Corporation:
Estimated MOH = $500,000
Actual MOH = $480,000
Estimated Direct Labor hours = 50,000
Actual DL hours = 55,000
Since actual MOH is $20,000 less than estimated MOH, then overhead must have been over-
allocated by $20,000 - correct answer ✔✔ False
-----
Applied Overhead = $500,000 Est. MOH / 50,000 Est. DLH = $10/DLH (PDOR)
, $10 PDOR * 55,000 actual DLH = $550,000 Applied
Actual MOH - Applied MOH
$480,000 - $550,000
= $70,000 OVER-applied
Choosing the method of allocating costs to products (i.e., plant-wide vs. ABC) can have an
impact on the total manufacturing costs - correct answer ✔✔ False
-----
Direct Costs do not change, MOH potentially change at individual product level but not overall
Traditional overhead allocation methods the use unit-based cost drivers are never accurate -
correct answer ✔✔ False
Cost distortion occurs when products are overcosted while other products are undercoated by
the cost allocation system - correct answer ✔✔ True
As output decreases, fixed costs per unit will also decrease - correct answer ✔✔ False
The relevant range is the range of activity for which the assumed cost relationships are valid -
correct answer ✔✔ True
Which of the following statements correctly distinguishes between financial and managerial
accounting?
A. Managerial accounting uses both financial and non-financial measures of performance
B. Financial accounting is oriented toward the future
C. Managerial accounting focuses on the whole organization
D. Financial accounting is primarily concerned with providing information for internal users
correct answers
Planning, directing, and controlling are a manager's three primary responsibilities - correct
answer ✔✔ True
In the manufacturing firm, manufacturing costs and product costs are the same - correct answer
✔✔ True
If the finished goods inventory decreases between the beginning and the end of a period, then
the cost of goods manufactured for the period is larger than the cost of goods sold - correct
answer ✔✔ False
A plant-wide overhead rate is calculated by dividing the estimated total manufacturing
overhead costs for the year by estimated total amount of the allocation base for the year -
correct answer ✔✔ True
Claire Corporation allocates (applies) Overhead based on direct labor hours. Here is selected
data from the Jacob Corporation:
Estimated MOH = $500,000
Actual MOH = $480,000
Estimated Direct Labor hours = 50,000
Actual DL hours = 55,000
Since actual MOH is $20,000 less than estimated MOH, then overhead must have been over-
allocated by $20,000 - correct answer ✔✔ False
-----
Applied Overhead = $500,000 Est. MOH / 50,000 Est. DLH = $10/DLH (PDOR)
, $10 PDOR * 55,000 actual DLH = $550,000 Applied
Actual MOH - Applied MOH
$480,000 - $550,000
= $70,000 OVER-applied
Choosing the method of allocating costs to products (i.e., plant-wide vs. ABC) can have an
impact on the total manufacturing costs - correct answer ✔✔ False
-----
Direct Costs do not change, MOH potentially change at individual product level but not overall
Traditional overhead allocation methods the use unit-based cost drivers are never accurate -
correct answer ✔✔ False
Cost distortion occurs when products are overcosted while other products are undercoated by
the cost allocation system - correct answer ✔✔ True
As output decreases, fixed costs per unit will also decrease - correct answer ✔✔ False
The relevant range is the range of activity for which the assumed cost relationships are valid -
correct answer ✔✔ True
Which of the following statements correctly distinguishes between financial and managerial
accounting?
A. Managerial accounting uses both financial and non-financial measures of performance
B. Financial accounting is oriented toward the future
C. Managerial accounting focuses on the whole organization
D. Financial accounting is primarily concerned with providing information for internal users
