BUS 209 Final Exam Questions with Verified Solutions Latest Update 2025/2026
What is managerial accounting? Does it focus on the past or future? How is the information
presented? - Answers -accounts financial information for internal company
-future
-budgets
What are internal controls? What are the three separate functions of them? - Answers -policies a
company sets to protect their assets
-authorization of transaction, custody of asset, record keeping
What is collusion? - Answers when 2 or more people agree to a dishonest practice
What is embezzlement? - Answers unlawful taking of property by someone to whom it was
entrusted
What are the three cost components of a manufacturing company? - Answers direct materials,
direct labor, overhead
What are direct materials? - Answers materials that are directly traceable into a finished good
What is direct labor? Give examples and non-examples. - Answers -labor costs that are directly
associated with a finished good
-example: people who directly put products together
-non example: supervisors, custodians, etc.
What is overhead? - Answers includes indirect materials, indirect labor, and all costs associated
with manufacturing the product (taxes, depreciation, etc.)
What are product costs? - Answers costs that occur in the factor. classified as either direct
materials, direct labor, or overhead
What are period costs? - Answers selling and administrative costs
What are the three types of inventory in a manufacturing setting? - Answers raw material
inventory, work-in-process inventory, and finished goods inventory
What is raw material inventory? - Answers purchased but not processed
What is work-in-process inventory? - Answers All material on the factory floor that is not yet
completed
What is finished goods inventory? - Answers manufactured goods that are complete and ready
, for sale
What are prime costs? - Answers direct materials and direct labor
What are conversion costs? - Answers direct labor and overhead
What is material requisition? - Answers request for material to get released onto production
floor
What is job order costing? - Answers costing out a particular job
How do you calculate pre-determined overhead rate? - Answers total estimated overhead costs
/ cost driver (total estimated direct labor hours)
What is opportunity cost? - Answers the most desirable alternative given up as the result of a
decision
What is a sunk cost? - Answers a cost that happened in the past and you will receive no future
benefit from it
What is a fixed cost? How do fixed costs per unit behave as production increases? - Answers -
cost that is the same over periods (ex: rent, insurance, car payment, etc.)
-as production increases, the lower the fixed cost per unit
What is a variable cost? How do variable per unit costs behave? - Answers -a cost that varies
with the level of output (ex: labor)
-cost per unit is constant
What is a mixed cost? - Answers a cost that has both fixed and variable components (ex:
utilities)
How do you calculate breakeven point? - Answers Fixed costs/ Contribution margin (Selling
price- variable cost per unit)
How do you calculate the number of units needed to sale to reach target profit? - Answers fixed
cost + target profit / contribution margin
How do you solve the problem when asked what is the minimum price the company must sell
each unit for to break even? - Answers add variable and fixed costs and then divide total cost by
number of units
If your breakeven point is 10,000 units, your contribution margin is 10, and you end up selling
10,005 units. What is your profit? - Answers 5 x 10 = 50
Is breaking even good or bad? What does it cover? - Answers it is neither good or bad. it mean
you covered your costs
What is managerial accounting? Does it focus on the past or future? How is the information
presented? - Answers -accounts financial information for internal company
-future
-budgets
What are internal controls? What are the three separate functions of them? - Answers -policies a
company sets to protect their assets
-authorization of transaction, custody of asset, record keeping
What is collusion? - Answers when 2 or more people agree to a dishonest practice
What is embezzlement? - Answers unlawful taking of property by someone to whom it was
entrusted
What are the three cost components of a manufacturing company? - Answers direct materials,
direct labor, overhead
What are direct materials? - Answers materials that are directly traceable into a finished good
What is direct labor? Give examples and non-examples. - Answers -labor costs that are directly
associated with a finished good
-example: people who directly put products together
-non example: supervisors, custodians, etc.
What is overhead? - Answers includes indirect materials, indirect labor, and all costs associated
with manufacturing the product (taxes, depreciation, etc.)
What are product costs? - Answers costs that occur in the factor. classified as either direct
materials, direct labor, or overhead
What are period costs? - Answers selling and administrative costs
What are the three types of inventory in a manufacturing setting? - Answers raw material
inventory, work-in-process inventory, and finished goods inventory
What is raw material inventory? - Answers purchased but not processed
What is work-in-process inventory? - Answers All material on the factory floor that is not yet
completed
What is finished goods inventory? - Answers manufactured goods that are complete and ready
, for sale
What are prime costs? - Answers direct materials and direct labor
What are conversion costs? - Answers direct labor and overhead
What is material requisition? - Answers request for material to get released onto production
floor
What is job order costing? - Answers costing out a particular job
How do you calculate pre-determined overhead rate? - Answers total estimated overhead costs
/ cost driver (total estimated direct labor hours)
What is opportunity cost? - Answers the most desirable alternative given up as the result of a
decision
What is a sunk cost? - Answers a cost that happened in the past and you will receive no future
benefit from it
What is a fixed cost? How do fixed costs per unit behave as production increases? - Answers -
cost that is the same over periods (ex: rent, insurance, car payment, etc.)
-as production increases, the lower the fixed cost per unit
What is a variable cost? How do variable per unit costs behave? - Answers -a cost that varies
with the level of output (ex: labor)
-cost per unit is constant
What is a mixed cost? - Answers a cost that has both fixed and variable components (ex:
utilities)
How do you calculate breakeven point? - Answers Fixed costs/ Contribution margin (Selling
price- variable cost per unit)
How do you calculate the number of units needed to sale to reach target profit? - Answers fixed
cost + target profit / contribution margin
How do you solve the problem when asked what is the minimum price the company must sell
each unit for to break even? - Answers add variable and fixed costs and then divide total cost by
number of units
If your breakeven point is 10,000 units, your contribution margin is 10, and you end up selling
10,005 units. What is your profit? - Answers 5 x 10 = 50
Is breaking even good or bad? What does it cover? - Answers it is neither good or bad. it mean
you covered your costs
