| 1-1 | What is the basic difference between the purposes of financial and managerial accounting? |
| 1-2 | What are the three major activities of a manager? |
| 1-3 | Describe the four steps in the planning and control cycle. |
| 1-4 | What are the major differences between financial and managerial accounting? |
| 1-5 | What are the three major elements of product costs in a manufacturing company? |
| 1-6 | Distinguish between the following: (a) direct materials, (b) indirect materials, (c) direct labor, (d) indirect labor, and (e) manufacturing overhead. |
| 1-7 | Explain the difference between a product cost and a period cost. |
| 1-8 | Describe how the income statement of a manufacturing company differs from the income statement of a merchandising company. |
| 1-9 | Describe the schedule of cost of goods manufactured? How does it tie into the income statement? |
| 1-10 | What inventory accounts are used by a manufacturing company? A merchandising company? |
| 1-11 | Why are product costs sometimes called inventoriable costs? Describe the flow of such costs in a manufacturing company from the point of incurrence until they finally become expenses on the income statement. |
| 1-12 | Is it possible for costs such as salaries or depreciation to end up as assets on the balance sheet? Explain. |
| 1-13 | What is meant by the term cost behavior? |
| 1-14 | “A variable cost is a cost that varies per unit of product, whereas a fixed cost is constant per unit of product.” Do you agree? Explain. |
| 1-15 | How do fixed costs create difficulties in costing units of product? |
| 1-16 | Why is manufacturing overhead considered an indirect cost of a unit of product? |
| 1-17 | Define the following terms: differential cost, opportunity cost, and sunk cost. |
| 1-18 | Only variable costs can be differential costs. Do you agree? Explain. |
