Session:2 Building Blocks of Managerial Accounting
Answer Key
Principles of Accounting, Volume 2: Managerial Accounting | Leadership Development – Micro-Learning Session
Rice University 2020 | Michael Laverty, Colorado State University Global Chris Littel, North Carolina State University| https://openstax.org/details/books/principles-managerial-accounting
Questions
1. Answers will vary but should include merchandising, service, and manufacturing businesses.
3. Answers will vary but should include a discussion of operating costs such as salaries and wages, advertising, rent, and office expenses.
5. Answers will vary but must include direct materials, direct labor, and manufacturing overhead.
7. Answers will vary but should include that fixed costs remain fixed in total across the relevant range, bounded by a minimum and maximum activity level.
9. Answers will vary but should include that prime costs are the direct material and direct labor costs, and conversion costs are direct labor and general factory overhead combined.
11. Answers will vary.