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devry acct346 final exam




Question;Page 1;1. (TCO 1) A difference between actual costs and planned;costs (Points: 4);should be;investigated if the amount is exceptional.;indicates that;the planned cost was poorly estimated.;indicates that;the manager is doing a poor job.;should be;ignored unless it involves the cost of ingredients.;2. (TCO 1) Which of the following is not likely to be a;fixed cost? (Points: 4);Direct;materials;Rent;Depreciation;Salary of the;human resources director;3. (TCO 2) Which of the following is not a manufacturing;cost? (Points: 4);Manufacturing;overhead;Direct;materials;Direct labor;Administrative;expenses;4. (TCO 2) A job-order costing system is likely used by a;(Points: 4);soft drink;bottler;breakfast;cereal manufacturer;paint;manufacturer;custom home;builder;5. (TCO 3) Equivalent units are calculated by (Points: 4);taking the;units needed to complete the beginning inventory, adding units started and;taking the equivalent units in ending inventory;taking the;units completed plus the equivalent units in ending inventory.;taking the;total units to account for and subtracting equivalent units in ending inventory;taking units;started plus units transferred out.;6. (TCO 3) The Freedom Corporation?s painting department had;a beginning inventory of 580 units, which had direct material costs of $22,715.;During June, 9,290 units were started and costs of $1,268,085 were incurred for;direct material. Ending inventory consists of 1,000 units, which are 35%;complete with respect to direct material. What is the cost per equivalent unit;for direct material? (Points: 4);$40.00;$137.00;$140.00;$159.00;7. (TCO 4) Which of the following is not an assumption of;C-V-P analysis? (Points: 4);Costs can be;accurately separated into fixed and variable components.;Fixed costs;remain constant within the relevant range.;Total variable;costs are proportioned to the level of activity.;Selling price;per unit declines after the break-even point is reached.;8. (TCO 4) The contribution margin per unit is the;difference between (Points: 4);total revenue;and total fixed costs;selling price;and variable costs per unit;anticipated;level of sales and break-even sales;budgeted fixed;costs and actual fixed costs;9. (TCO 5) Full costing (Points: 4);is the same as;absorption costing.;considers fixed;manufacturing overhead as part of the cost of inventory.;often does not;provide the information needed for C-V-P analysis.;All of the;above choices are correct.;10. (TCO 5) Which of the following is not true when units;sold exceed units produced? (Points: 4);Full costing;and variable costing will yield the same net income.;Full costing;will assign some fixed manufacturing costs to the units in ending inventory.;Net income will;be higher under variable costing than under full costing.;Inventory;levels will decrease.;11. (TCO 6) Cost-plus contracts are common in which of the;following industries? (Points: 4);Manufactured;home builders;Soft drink;bottlers;Defense;contractors;Newspaper;publishers;12. (TCO 6) Which of the following is not generally true;when a company compares ABC and traditional costing? (Points: 4);ABC uses more;cost drivers;ABC allocates;cost based solely on production volume;ABC is more;expensive;ABC is less;likely to undercost complex, low volume products;13. (TCO 7) Fixed costs that will be eliminated if a;particular course of action is undertaken are called (Points: 4);optional costs;opportunity;costs;direct costs;avoidable costs;Page 2;1. (TCO 7) Two or more products that result from common;inputs are called (Points: 4);split products;joint products;combination;products;common products;2. (TCO 8) Activity based pricing seeks to (Points: 4);charge;customers with the costs they are creating.;make greater;profits by charging all customers more.;maintain all;customers in the customer base.;all of the;above.;3. (TCO 8) When deciding to accept or reject a special order;which of the following costs would most likely not be relevant? (Points: 4);The wages of;direct labor to make the order.;Depreciation on;the machinery used to make the order.;The raw;material used to make the order.;The electricity;used to run the machine to make the order.;4. (TCO 9) Present value techniques (Points: 4);ignore cash;flows that will occur more than ten years in the future.;are a way of;converting future dollars into equivalent current dollars.;provide more;conservative results than similar time value of money computations.;treat dollars;received today the same as dollars received in the future.;5. (TCO 9) The internal rate of return (Points: 4);takes into;account the time value of money.;is the rate of;return that equates the present value of future cash flows to the initial;investment.;both A and B;neither A nor B;6. (TCO 10) A method of budget preparation that requires all;budgeted amounts to be justified by the department, even if the amounts were;supported in prior periods, is called (Points: 4);variance;budgeting.;flexible;budgeting.;current period;budgeting.;zero base;budgeting.;7. (TCO 10) Which budget is prepared first? (Points: 4);Cash;disbursement budget;Production;budget;Capital budget;Sales budget;8. (TCO 10) The difference between standard costs and;budgeted costs is that standard costs (Points: 4);refer to a;single unit while budgeted costs refer to the cost, at standard, for the total;number of budgeted units.;are calculated;under ideal conditions, while budgeted costs are calculated for attainable;conditions.;are calculated;for material while budgeted costs are calculated for labor.;are part of the;management accounting system, while budgets are part of the financial;accounting system.;9. (TCO 10) The overhead volume variance indicates that;(Points: 4);raw materials have been wasted.;management has;done a poor job of controlling costs.;the quantity of;production differed from what was anticipated.;labor rates;were higher than expected.;10. (TCO 10) A subunit that has responsibility for;controlling cost but not revenues is a(n) (Points: 4);profit center.;cost center.;investment;center.;business;center.;11. (TCO 10) Which of the following is not an advantage of;decentralization for a company? (Points: 4);Subunit;managers have better information.;Subunit;managers will act to benefit the organization as a whole.;Subunit;managers can respond quicker to changing circumstances.;Subunit;managers can receive training to move into top level management positions.;12. (TCO 10) The ratio that measures the return earned;independently of how the firm is financed is the (Points: 4);return on stockholders' equity.;price earnings;ratio.;earnings per;share.;return on;assets.;Page 3;1. (TCO 1) Distinguish between product costs and period;costs. Define both types of costs and provide examples. (Points: 20);2. (TCO 6) Pacific Airlines has three service departments;ticketing, baggage handling, and aircraft maintenance. Costs of these;departments are allocated to two revenue producing departments, domestic and;international flights. Costs for the service departments are not separated into;fixed and variable and the totals are as follows;Ticketing $4,000,000;Baggage handling $2,000,000;Aircraft maintenance $6,000,000;Air miles are as follows;Domestic 5,000,000;International 20,000,000;(a) Allocate the service department costs based on air;miles.;(b) Evaluate World Airlines use of air miles as a basis for;allocation. Do you think the;cause-and-effect relationship is strong?;(c) Suggest alternative methods to allocate the service;department costs. (Points: 25);3. (TCO 10) Gina's Boutique makes custom jewelry. One item;the guru necklace, is a best seller and sales in units for the first quarter;are as follows;January 100,000 units;February 150,000 units;March 180,000 units;Desired ending inventory is budgeted at 20% of next month;sales.;Compute production for February. (Points: 25);4. (TCO 2) Singleton Company is trying to determine a;predetermined manufacturing overhead. Estimated overhead for the upcoming year;is $600,000. Budgeted machine hours are 120,000 hours, and budgeted labor hours;are 15,000 hours at a rate of $20.00 per hour. Compute the predetermined;overhead rate based on;(a) Machine hours;(b) Direct labor hours;(c) Direct labor dollars (Points: 25);Page 4;1. (TCO 9) A project will require an initial investment of;$600,000 and is expected to generate the following cash flows;Year 1 $100,000;Year 2 $250,000;Year 3 $250,000;Year 4 $200,000;Year 5 $100,000;(a) What is the project's payback period?;(b) If the required rate of return is 20% and taxes are;ignored, what is the project's net present value? (Points: 25);2. (TCO 4) Legal Docs Inc is a legal services firm that;files incorporation papers for small businesses. They charge $1,000 per;application. This year's income;statement shows the following;Sales $1,295,000;Variable Expenses $1,023,000;Contribution margin $272,000;Fixed costs $250,000;Profit $22,000;Required;(a) Compute the break-even point in units.;(b) Compute the contribution margin ratio.;(c) Compute the current margin of safety.;(d) How many applications must the company sell to make a;profit of $350,000? (Points: 25);3. (TCO 5) The following data has been taken from Air-Tite;company in its first year of business.;Units produced 100,000;Units sold 80,000;Units in ending inventory 20,000;Fixed manufacturing overhead $400,000;(a) Compute the amount of fixed manufacturing overhead that;would be expensed in the current year if full absorption costing is used.;(b) Compute the amount of fixed manufacturing overhead that;would be expensed in the current year if variable costing is used.;(c) Compute the amount of fixed manufacturing overhead that;would be included in ending inventory under full absorption costing. (Points;25)


Paper#40057 | Written in 18-Jul-2015

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