Essay Acc 202 Mid-Term Study Guide
65 of them are the MidTerm. No answers are provided in the study guide (since the whole idea is for you to” review and study” the material to prepare for the test).
True or False
1. Much of managerial accounting is directed at gathering useful information about costs for planning and control decisions.
2. Direct materials are not usually easily traced to a product.
3. A variable cost changes in proportion to changes in the volume in activity.
4. 34. Product costs are expenditures necessary and integral to finished products.
5. Cost concepts such as variable, fixed, mixed, direct and indirect apply only to manufacturers …show more content…
35. As the level of output activity increases, the variable cost per unit remains constant.
36. The margin of safety is the amount that sales can drop before the company incurs a loss.
37. Unit contribution margin is the amount each unit contributes to both fixed costs and net income.
38. The extent, or relative size, of fixed costs in the total cost structure is known as operating leverage.
39. The break-even point is the sales level at which a company neither earns a profit nor incurs a loss.
40. Cost-volume-profit analysis cannot be used when a firm produces and sells more than one product.
41. Product costs consist of direct labor, direct materials and overhead.
42. Manufacturing overhead are those which can be traced directly to the product.
43. The traditional costing approach assigns all manufacturing costs to products.
44. The use of absorption costing can result in misleading product cost information.
45. Variable costing treats fixed overhead cost as a period cost.
46. If a company has excess capacity, increases in production level will increase variable production costs but not fixed production costs.
47. Contribution margin is another way to refer to gross margin.
48. Contribution margin is another way to refer to gross margin.
49. An opportunity cost is:
A. A cost