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Accounting 7 Problems and MCQs Assignment

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Question;Problems Section ? Problem 1. The following is a list of various costs of producing sweatshirts. Classify each cost as either a variable, fixed, or mixed cost for units produced and sold.(a) Lubricants used to oil machinery. (b) Warehouse rent of $6,000 per month plus $.50 per square foot of storage used. (c) Thread. (d) Electricity costs of $.025 per kilowatt-hour. (e) Janitorial costs of $2,000 per month. (f) Advertising costs of $10,000 per month. (g) Sales salaries. (h) Color dyes for producing different colors of sweatshirts. (i) Salary of the production supervisor. (j) Straight-line depreciation on sewing machines. (k) Patterns for different designs. Patterns typically last many years before being replaced. (l) Hourly wages of sewing machine operators. (m) Property taxes on factory, building, and equipment. (n) Cotton and polyester cloth. (o) Maintenance costs with sewing machine company. The cost is $2,000 per year plus $.001 for each machine hour of use. 2. On October 31, the end of the first month of operations, Morristown & Co. prepared the following income statement based on absorption costing:Morristown & Co.Income StatementFor Month Ended October 31, 20-Sales (2,600 units) $104,000Cost of goods sold: Cost of goods manufactured $85,500 Less ending inventory (400 units) 11,400 Cost of goods sold 74,100Gross profit $ 29,900Selling and administrative expenses 21,500Income from operations $ 8,400 ========If the fixed manufacturing costs were $42,900 and the variable selling and administrative expenses were $14,600, prepare an income statement in accordance with the variable costing concept.3. Based on the following production and sales data of Shingle Co. for March of the current year, prepare (a) a sales budget and (b) a production budget. Product T Product XEstimated inventory, March 1 28,000 units 20,000 unitsDesired inventory, March 31 32,000 units 15,000 unitsExpected sales volume: Area I 320,000 units 260,000 units Area II 190,000 units 130,000 unitsUnit sales price $6 $14 4. Door & Window Co. was organized on August 1 of the current year. Projected sales for the next three months are as follows:August $120,000September 200,000October 230,000The company expects to sell 40% of its merchandise for cash. Of the sales on account, 25% are expected to be collected in the month of the sale and the remainder in the following month.Prepare a schedule indicating total cash collections for August, September, and October. 5. For the current year ending April 30, Hal Company expects fixed costs of $60,000, a unit variable cost of $70, and a unit selling price of $105.(a) Compute the anticipated break-even sales (units).(b) Compute the sales (units) required to realize an operating profit of $8,000. 6. The Filling Department of Rose Petal Lotion Company had 2,300 ounces in beginning work in process inventory (70% complete). During the period 46,500 ounces were completed. The ending work in process inventory was 1,800 ounces (25% complete). What are the equivalent units for both direct materials and conversion costs (if materials are added at the beginning of the process)? 7. Give me examples of the following costs for an automobile manufacturer (fill in the appropriate blanks).Direct Materials1.______________________________________________________________2.______________________________________________________________Direct Labor1. _____________________________________________________________Factory Overhead1. Indirect Materials ________________________________________________2. Indirect Labor __________________________________________________3. Other _________________________________________________________Period Costs1. ______________________________________________________________2. ______________________________________________________________Question 1For which of the following businesses would a process cost system be appropriate? An oil refinery Custom electronics manufacturer Yacht builder Specialty furniture companyQuestion 2 Department A had 4,000 units in work in process that were 60% completed as to labor and overhead at the beginning of the period, 29,000 units of direct materials were added during the period, 31,000 units were completed during the period, and 2,000 units were 80% completed as to labor and overhead at the end of the period. All materials are added at the beginning of the process. The first-in, first-out method is used to cost inventories.The number of equivalent units of production for conversion costs for the period was: 33,000 33,800 29,800 30,200Question 3Department A had 4,000 units in work in process that were 60% completed as to labor and overhead at the beginning of the period, 29,000 units of direct materials were added during the period, 31,000 units were completed during the period, and 2,000 units were 80% completed as to labor and overhead at the end of the period. All materials are added at the beginning of the process. The first-in, first-out method is used to cost inventories.The number of equivalent units of production for material costs for the period was: 32,000 33,000 29,800 29,000Question 4 Which of the following costs is an example of a cost that remains the same in total as the number of units produced changes? Salary of a factory supervisor Direct materials Units of production depreciation on factory equipment Direct laborQuestion 5 Which of the following describes the behavior of the fixed cost per unit? Decreases with decreasing production Remains constant with changes in production Increases with increasing production Decreases with increasing productionQuestion 6If sales are $820,000, variable costs are 58% of sales, and operating income is $260,000, what is the contribution margin ratio? 62% 42% 53.1% 32%Question 7 If fixed costs are $250,000, the unit selling price is $125, and the unit variable costs are $73, what is the break-even sales (units)? 4,808 units 3,425 units 2,000 units 2,381 unitsQuestion 8 If fixed costs are $1,400,000, the unit selling price is $240, and the unit variable costs are $110, what is the amount of sales required to realize an operating income of $200,000? 12,308 units 10,769 units 12,000 units 1,538 unitsQuestion 9 If fixed costs are $500,000, the unit selling price is $55, and the unit variable costs are $30, what is the break-even sales (units) if fixed costs are increased by $80,000? 25,000 units 23,200 units 10,545 units 19,333 unitsQuestion 10 Which of the following conditions would cause the break-even point to decrease? Total fixed costs increase Unit selling price decreases Unit variable cost decreases Unit variable cost increasesQuestion 11 Which of the following conditions would cause the break-even point to increase? Total fixed costs decrease Unit selling price increases Total fixed costs increase Unit variable cost decreasesQuestion 12 The amount of income under absorption costing will be more than the amount of income under variable costing when units manufactured: are equal to or greater than units sold are less than units sold exceed units sold equal units soldQuestion 13 A business operated at 100% of capacity during its first month and incurred the following costs:Production costs (10,000 units): Direct materials $140,000Direct labor $40,000Variable factory overhead $20,000Fixed factory overhead $4,000 $204,000Operating expenses: Variable operating expenses $ 34,000Fixed operating expenses 2,000 $36,000If 2,000 units remain unsold at the end of the month and sales total $300,000 for the month, what would be the amount of income from operations reported on the variable costing income statement? $114,800 $100,800 $100,000 -?????? $140,000Question 14 A business operated at 100% of capacity during its first month and incurred the following costs:Production costs (10,000 units): Direct materials $140,000Direct labor $40,000Variable factory overhead $20,000Fixed factory overhead $4,000 $204,000Operating expenses: Variable operating expenses $ 34,000Fixed operating expenses 2,000 $36,000If 2,000 units remain unsold at the end of the month and sales total $300,000 for the month, what is the amount of the manufacturing margin that would be reported on the variable costing income statement? $140,000 $106,000 $104,000 $114,800Question 15.A business operated at 100% of capacity during its first month and incurred the following costs:Production costs (5,000 units): Direct materials $70,000Direct labor $20,000Variable factory overhead $10,000Fixed factory overhead $ 2,000 $102,000Operating expenses: Variable operating expenses $17,000Fixed operating expenses $1,000 $18,000 If 1,000 units remain unsold at the end of the month and sales total $150,000 for the month, what is the amount of the contribution margin that would be reported on the variable costing income statement? $53,000 $51,400 $54,000 $52,000Question 16 For March, sales revenue is $1,000,000, sales commissions are 4% of sales, the sales manager's salary is $80,000, advertising expenses are $75,000, shipping expenses total 1% of sales, and miscellaneous selling expenses are $2,100 plus 1% of sales. Total selling expenses for the month of March are: $187,550 $217,100 $194,100 $192,100Question 17 Nuthatch Corporation began its operations on September 1 of the current year. Budgeted sales for the first three months of business are $260,000, $350,000, and $400,000, respectively, for September, October, and November. The company expects to sell 30% of its merchandise for cash. Of sales on account, 80% are expected to be collected in the month of the sale and 20% in the month following the sale.The cash collections in October from accounts receivable are: $337,400 $210,000 $232,400 $240,000Question 18 Finch Company began its operations on March 31 of the current year. Finch Co. has the following projected costs: April May JuneManufacturing costs (1) $156,800 $195,200 $217,600Insurance expense (2) 1,000 1,000 1,000Depreciation expense 2,000 2,000 2,000Property tax expense (3) 500 500 500(1) 3/4 of the manufacturing costs are paid for in the month they are incurred. 1/4 is paid in the following month.(2) Insurance expense is $1,000 a month, however, the insurance is paid four times yearly in the first month of the quarter, i.e. January, April, July, and October.(3) Property tax is paid once a year in November.The cash payments for Finch Company in the month of April are: $123,100 $120,600 $121,100 $122,600Question 19 Which of the following is false in regards to direct materials for an auto manufacturer? Oil to lubricate factory machines would not be a direct material. Upholstery fabric would probably be a direct material Steel would probably be a direct material. Small plastic clips to hold on door panels, that become part of the auto, must be accounted for as direct materials.Question 20 Which of the following is an example of direct labor cost for an airplane manufacturer? Cost of jet engines Cost of wages of assembly worker Cost of oil lubricants for factory machinery Salary of plant supervisorQuestion 21 Prime costs are period costs and factory overhead direct labor and factory overhead direct materials and factory overhead direct materials and direct laborQuestion 22 Product costs are expensed as costs are incurred for direct labor, direct material and factory overhead appear on both the income statement and balance sheet appear only on the balance sheet appear only on the income statementQuestion 23 A plant manager?s salary may be referred to as: an indirect cost a direct cost either a direct cost or an indirect cost since managerial accounting is not restricted by GAAP a period costQuestion 24An example of a period cost is: advertising expense depreciation on factory equipment indirect materials property taxes on plant facilities

 

Paper#41357 | Written in 18-Jul-2015

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