1. What are the differences between Managerial Accounting and Financial Accounting? Be sure to address for whom the information is prepared and under what rules and regulations each accounting system must operate.

2. Define the following terms: (a) direct materials, (b) indirect materials, (c) direct labor, (d) indirect labor, and (e) manufacturing overhead. (20 points)

3. What is the difference between a product cost and a period cost?

4. What is the difference between a (a) variable cost, (b) fixed cost, and (c) mixed cost?

5. What is the major disadvantage of the high-low method?

6. What is the general formula for a mixed cost? Which term represents the variable cost? The fixed cost?

7. What is the difference between a contribution format income statement and a traditional format income statement?

8. What is the contribution margin?

9. Define the following terms: differential cost, opportunity cost, and sunk cost.