BUS A 100 EXAM 1 Questions with Answers (100%
Correct Answers)
What is the formula for a contribution margin income statement?
Ans✅ ✅: Sales-variable cost=Contribution Margin;Contribution Margin-Fixed Costs=Net
income
What is the formula for a single step income statement?
Ans✅ ✅: Revenue-expenses=net income(or loss)
What is the formula for a multi step income statement?
Ans✅ ✅: Sales-cost of goods sold=Gross profit;gross profit-operating expenses=net
income(or loss)
What is included in the total product cost?
Ans✅ ✅: Direct Materials+Direct Labor+Manufacturing overhead
What is the difference between inventoriable vs non inventoriable costs?
Ans✅ ✅: Inventoriable directly relates to production,capitalized as inventory until sold non
inventoriable not directly tied to production expensed in the period incurred
What are two main strategies companies use to compete in the market?
Ans✅ ✅: Product differentiation,price based competition
What is an example of product differentiation
Ans✅ ✅: BMW differentating its cars from other cars in their speed handling
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, What is an example of price based competition
Ans✅ ✅: Walmart selling products at a lower price
Three types of inventory accounts in a manufacturing firm
Ans✅ ✅: Raw materials inventory,work in process inventory, finished goods inventory
What does raw material inventory represent?
Ans✅ ✅: Materials purchased but not yet used in production
What does work in process inventory represent?
Ans✅ ✅: Costs accumulated during production but before completion
What does finished goods inventory represent?
Ans✅ ✅: Completed products ready for sale
Three types of manufacturing costs
Ans✅ ✅: direct material, direct labor, manufacturing overhead
What are direct materials
Ans✅ ✅: Raw materials that are directly used in production
What is direct labor
Ans✅ ✅: labor costs for employees who directly work on converting raw materials into
finished products
What is manufacturing overhead?
Ans✅ ✅: All other factory related costs
© 2025 All rights reserved
Correct Answers)
What is the formula for a contribution margin income statement?
Ans✅ ✅: Sales-variable cost=Contribution Margin;Contribution Margin-Fixed Costs=Net
income
What is the formula for a single step income statement?
Ans✅ ✅: Revenue-expenses=net income(or loss)
What is the formula for a multi step income statement?
Ans✅ ✅: Sales-cost of goods sold=Gross profit;gross profit-operating expenses=net
income(or loss)
What is included in the total product cost?
Ans✅ ✅: Direct Materials+Direct Labor+Manufacturing overhead
What is the difference between inventoriable vs non inventoriable costs?
Ans✅ ✅: Inventoriable directly relates to production,capitalized as inventory until sold non
inventoriable not directly tied to production expensed in the period incurred
What are two main strategies companies use to compete in the market?
Ans✅ ✅: Product differentiation,price based competition
What is an example of product differentiation
Ans✅ ✅: BMW differentating its cars from other cars in their speed handling
© 2025 All rights reserved
, What is an example of price based competition
Ans✅ ✅: Walmart selling products at a lower price
Three types of inventory accounts in a manufacturing firm
Ans✅ ✅: Raw materials inventory,work in process inventory, finished goods inventory
What does raw material inventory represent?
Ans✅ ✅: Materials purchased but not yet used in production
What does work in process inventory represent?
Ans✅ ✅: Costs accumulated during production but before completion
What does finished goods inventory represent?
Ans✅ ✅: Completed products ready for sale
Three types of manufacturing costs
Ans✅ ✅: direct material, direct labor, manufacturing overhead
What are direct materials
Ans✅ ✅: Raw materials that are directly used in production
What is direct labor
Ans✅ ✅: labor costs for employees who directly work on converting raw materials into
finished products
What is manufacturing overhead?
Ans✅ ✅: All other factory related costs
© 2025 All rights reserved
