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devry acct346 midterm exam




Question;(TCO 1) The goal of managerial accounting is to provide;information that managers need for;planning.;control.;decision making.;All of the above;Question 2. Question;(TCO 1) Which of the following statements regarding fixed;costs is true?;When production increases, fixed cost per unit increases.;When production decreases, total fixed costs;decrease.;When production increases, fixed cost per unit;decreases.;When production decreases, total fixed costs;increase.;Question 3. Question;(TCO 1) You own a car and are trying to decide whether or;not to trade it in and buy a new car. Which of the following costs is an;opportunity cost in this situation?;The trip to Cancun that you;will not be able to take if you buy the car;The cost of the car you are trading in;The cost of your books for this term;The cost of your car insurance last year;Question 4. Question;(TCO 1) Shula?s 347 Grill has budgeted the following costs;for a month in which 1,600 steak dinners will be produced and sold: materials;$4,080, hourly labor (variable), $5,200, rent (fixed), $1,700, depreciation;$800, and other fixed costs, $600. Each steak dinner sells for $14.00 each.;Which is the budgeted fixed cost per unit?;$1.06;$1.44;$4.49;$1.94;Question 5. Question;(TCO 1) Which of the following is an example of a;manufacturing overhead cost?;Security at the manufacturing;plant;Fabric used to produce shirts;Cost of shipping product to customers;The salary of the president of the company;4 of 4;Comments;Question 6. Question;(TCO 1) Which of the following is a period cost?;Rent on a factory building;Depreciation on production equipment;Raw materials cost;Commissions paid on each unit sold;Comments;Question 7. Question;(TCO 1) At December 31, 2010, WDT Inc. has a balance in the;Work in Process Inventory account of $62,000. At January 1, 2010, the balance;was $55,000. Current manufacturing costs for the year are $292,000, and cost of;goods sold is $284,000. How much is cost of goods manufactured?;$292,000;$299,000;$277,000;$285,000;Question 8. Question;(TCO 2) BCS Company applies manufacturing overhead based on;direct labor hours. Information concerning manufacturing overhead and labor for;August follows.;Estimated;Actual;Overhead cost $174,000;$171,000;Direct labor hours 5,800;5,900;Direct labor cost $87,000;$89,975;How much overhead should be applied in total during August?;177,000;179,950;171,100;Comments;Question 9. Question;(TCO 2) Citrus Company incurred manufacturing overhead costs;of $300,000. Total overhead applied to jobs was $306,000. What was the amount;of overapplied or underapplied overhead?;$7,000 overapplied;$6,000 overapplied;$6,000 underapplied;$13,000 underapplied;Question 10. Question;(TCO 3) Companies in which of the following industries would;not be likely to use process costing?;Cereals;Paints;Cosmetics;Auto body repairs;Instructor Explanation: See Chapter 5.;0 of 4;Comments;Question 11. Question;(TCO 3) The blending department began the period with 20,000;units. During the period, the department received another 80,000 units from the;prior department, and at the end of the period, 30,000 units remained, which;were 40% complete. How much are equivalent units in the blending department?s;Work In Process Inventory at the end of the period?;12,000;28,000;40,000;52,000;Question 12. Question;(TCO 3) Ranger Glass Company manufactures glass for French;doors. At the start of May, 2,000 units were in process. During May, 11,000;units were completed and 3,000 units were in process at the end of May. These;in-process units were 90% complete with respect to material and 50% complete;with respect to conversion costs. Other information is as follows.;Work in process, May 1;Direct material $36,000;Conversion costs $45,000;Costs incurred during May;Direct material $186,000;Conversion costs $255,000;Calculate the cost per equivalent unit for conversion costs.;$24.00;$4.09;$21.43;$20.40;Question 13. Question;(TCO 4) Total costs were $75,800 when 30,000 units were;produced and $95,800 when 40,000 units were produced. Use the high-low method;to find the estimated total costs for a production level of 32,000 units.;$80,115;$76,000;$79,800;$91,800;4;of 4;Comments;Question 14. Question;(TCO 4) The margin of safety is the difference between;total revenue and total fixed costs.;expected level of sales and the break-even;point.;budgeted fixed costs and actual fixed costs.;selling price and variable cost per unit.;Instructor Explanation: See Chapter 6.;4 of 4;Comments;Question 15. Question;(TCO 4) Allen Company sells homework machines for $100 each.;Variable costs per unit are $75 and total fixed costs are $62,000. Allen is;considering the purchase of new equipment that would increase fixed costs to;$84,000 but decrease the variable costs per unit to $60. At that level, Allen;Company expects to sell 3,000 units next year. Which is Allen?s break-even;point in units if it purchases the new equipment?;2,480 units;36,000 units;2,100 units;3,650 units;Question 16. Question;(TCO 4) Paula Corporation sells a single product at a price;of $275 per unit. Variable cost per unit is $135 and fixed costs total;$356,860. If sales are expected to be $825,000, which is Paula?s margin of;safety?;$468,140;$124,025;$700,975;$405,000;Question 17. Question;(TCO 5) Which of the following is treated differently in;full costing than in variable costing?;Direct materials;Fixed manufacturing overhead;Direct labor;Variable manufacturing overhead;Instructor Explanation: See Chapter 7.;4 of 4;Comments;Question 18. Question;(TCO 5) Variable costing income is a function of;units sold only.;units produced only.;both units sold and units produced.;neither units sold nor units produced.;Instructor Explanation: See Chapter 7.;4 of 4;Comments;Question 19. Question;(TCO 5) Peak Manufacturing produces snow blowers. The;selling price per snow blower is $100. Costs involved in production are as;follows.;Direct material per unit: $20;Direct labor per unit: 12;Variable manufacturing overhead per unit: 10;Fixed manufacturing overhead per year: $148,500;In addition, the company has fixed selling and;administrative costs of $150,000 per year.;During the year, Peak produces 45,000 snow blowers and sells;30,000 snow blowers. How much fixed manufacturing overhead is in ending;inventory under full costing?;$0;$49,500;Question 20. Question;(TCO 6) Which of the following is not a reason why companies;allocate costs?;To calculate the full cost of products for financial reporting purposes;To discourage managers from using external;suppliers;To reduce the frivolous use of company;resources;To provide information needed by managers to;make appropriate decisions;Instructor Explanation: See Chapter 4.;4 of 4;Comments;Question 21. Question;(TCO 5) An allocation base;is the minimum amount to be allocated to a cost object.;coordinates the manufacturing overhead costs;as they are incurred.;will always be less than the variable costs;for a product.;relates the cost pool to the cost objectives.;Instructor Explanation: See Chapter 4.;4 of 4;Comments;Question 22. Question;(TCO 6) The building maintenance department for Jones;Manufacturing Company budgets annual costs of $4,200,000 based on the expected;operating level for the coming year. The costs are allocated to two production;departments. The following data relate to the potential allocation bases.;Production;Dept. 1 Production Dept. 2;Square footage 15,000;45,000;Direct labor hours 25,000;50,000;If Jones assigns costs to departments based on square;footage, how much total costs will be allocated to Production Department 1?;$1,400,000;$1,050,000;$1,575,000;$2,100,000;Question 23. Question;(TCO 7) A company is trying to decide whether to keep or;drop the sporting goods department in its department store. If the segment is;dropped, the manager will be fired. The manager's salary, in relation to the;decision to keep or drop the sporting goods department, is;avoidable and therefore;relevant.;not avoidable and therefore relevant.;sunk and therefore not relevant.;the same for all alternatives and therefore;not relevant.;Instructor Explanation: See Chapter 8.;4 of 4;Comments;Question 24. Question;(TCO 7) BigByte Company has 20 obsolete computers that are;carried in inventory at a cost of $15,000. If these computers are upgraded at a;cost of $8,000, they could be sold for $17,700. Alternatively, the computers;could be sold as is for $8,500. Which is the net advantage or disadvantage of;reworking the computers?;$1,200 advantage;$1,200 disadvantage;$9,200 disadvantage;$9,700 advantage;Question 25. Question;(TCO 7) YXZ Company?s market for the Model 55 has changed;significantly, and YXZ has had to drop the price per unit from $275 to $135.;There are some units in the Work In Process Inventory that have costs of $160;per unit associated with them. YXZ could sell these units in their current;state for $100 each. It will cost YXZ $10 per unit to complete these units so;that they can be sold for $135 each.;When the incremental revenues and expenses are analyzed;which is the financial impact?;$25 per-unit profit if the;units are completed;$125 per-unit profit if the units are;completed;$65 per-unit loss if the units are completed;$150 per-unit loss if the units are completed;Question 26. Question;(TCO 3) Describe a process costing system, including the;types of companies that commonly use this system. How can process costing;information be used in incremental analysis?;Question 27. Question;(TCO 7) Each year, ACE Engines surveys 7,600 former and;prospective customers regarding satisfaction and brand awareness. For the;current year, the company is considering outsourcing the survey to RBG;Associates, who have offered to conduct the survey and summarize results for;$50,000. Robert Ace, the president of ACE Engines, believes that RBG will do a;higher quality job than his company has been doing but is unwilling to spend;more than $12,000 above current costs. The head of bookkeeping for ACE has;prepared the following summary of costs related to the survey in the prior;year.;Mailing;$27,000;Printing (done by Lester Print Shop);$9,000;Salary of Pat Fisher, part-time employee who stuffed;envelopes and summarized data when surveys were returned (130 ? $16);$2,080;Share of depreciation of computer and software used to track;survey responses and summarize results;$1,200;Share of electricity, phone, and so forth based on square;feet of space occupied by Pat Fisher versus entire company;$600;Total;$39,880;Prepare an incremental analysis in good form to determine the;impact on profit of going outside versus conducting the survey as in the past.;Will ACE accept the RBG offer? Why or why not?;Comments;Question 28. Question;(TCO 4) The following monthly data are available for RedEx;which produces only one product that it sells for $84 each. Its unit variable;costs are $28, and its total fixed expenses are $64,960. Sales during April;totaled 1,600 units.;(a) How much is the break-even point in sales dollars for;RedEx?;(b) How many units must RedEx sell in order to earn a profit;of $24,640?;(c) A new employee suggests that RedEx sponsor a company softball;team as a form of advertising. The cost to sponsor the team is $1,792. How many;more units must be sold to cover this cost?


Paper#39463 | Written in 18-Jul-2015

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