Managerial Accounting exam 1

Question 1

Direct costs

Answer 1

costs that can be easily traced to the cost object

Question 2

indirect costs

Answer 2

costs that cannot be easily traced to the cost object

Question 3

Manufacturing costs

Answer 3

direct labor, direct materials, and MOH costs

Question 4

Non-manufacturing costs

Answer 4

selling and admin costs

Question 5

product costs

Answer 5

all costs associated with making a product

Question 6

period costs

Answer 6

all costs that are not associated with the making of a product

Question 7

variable costs

Answer 7

costs that vary consistently with each unit produced

Question 8

fixed costs

Answer 8

costs that remain constant regardless of the volume of production

Question 9

mixed costs

Answer 9

have both a fixed and variable component, vary by production but change per unit will not be consistant

Question 10

relevant costs

Answer 10

costs that differ between the two options and are relevant to the decision

Question 10

irrelevant costs

Answer 10

costs that are consistent between the two options and therefor are not relevant to the decision

Question 11

dollars to break even formula

Answer 11

Fixed expenses/CM ratio

Question 12

unit sales to attain a target profit

Answer 12

(target profit + fixed expenses)/Unit CM

Question 13

Dollar sales to attain target profit

Answer 13

(target profit + Fixed expenses)/CM ratio

Question 14

Margin of safety dollars

Answer 14

Sales - break even sales

Question 15

Margin of safety %

Answer 15

Margin of safety dollars/sales

Question 16

Degree of operating leverage

Answer 16

CM/NOI