Topic 4 - Cost Concepts 1. Differentiate between managerial and financial accounting. 2. What happens to total fixed costs and fixed costs per unit when units produced or sold increase? Total fixed costs increase, decrease, or remain the same (circle the correct answer). Fixed costs per unit increase, decrease or remain the same (circle the correct answer). 3. What happens to total fixed costs and fixed costs per unit when units produced or sold decrease? Total fixed costs increase, decrease, or remain the same (circle the correct answer). Fixed costs per unit increase, decrease or remain the same (circle the correct answer). 4. What happens to total variable costs and variable costs per unit when units produced or sold increase? Total variable costs increase, decrease, or remain the same (circle the correct answer). Variable costs per unit increase, decrease or remain the same (circle the correct answer). 5. What happens to total variable costs and variable costs per unit when units produced or sold decrease? Total variable costs increase, decrease, or remain the same (circle the correct answer). Variable costs per unit increase, decrease or remain the same (circle the correct answer). 2 Revised October 2021 6. Differentiate between product cost and period cost. 7. What are the three components of product costs? 8. Explain the IMA's formal code of ethics. 9. Discuss the need for ethics in management accounting. 10.Identify the types of product costs and period costs for the following types of companies: Merchandising Company (wholesale or retail) Service company Manufacturing company 11.For each cost listed below, indicate whether the cost is a product cost or a period cost. a. Direct labor b. Office rent c. Direct materials d. Factory rent e. Sales commissions f. Administrative expenses g. Manufacturing overhead h. Office equipment depreciation i. Factory equipment depreciation j. Indirect labor k. Factory rent l. Salary expense m. Office secretary's wages n. Advertising costs o. Indirect materials p. Legal costs q. Factory supervisor's salary r. Selling expenses s. Factory maintenance costs