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devry ACC346 Mid-Term Questions




Question;1.(TCO;1) Managerial accounting stresses accounting concepts and procedures that;are relevant to preparing reports for(Points: 4) taxing;authorities.internal users of accounting;information.external;users of accounting information.the;Securities and Exchange Commission (SEC).;2.TCO;1) Which of the following statements regarding fixed costs is true? (Points: 4) 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.;3.(TCO;1) Which of the following is a direct cost in relation to the cost of;teaching the managerial accounting course you are currently taking? (Points: 4) the cost of the paper that you;receive as handouts for the classthe;cost of the room you are using for the classthe;cost of the registration system that allowed you to enroll in the classthe;cost of the financial aid department that helps you fund the cost of taking;the class;4.(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. What is;the budgeted total variable cost? (Points;4) $5,200$9,280$10,080$2,300;5.(TCO;1) Which of the following costs is part of manufacturing overhead? (Points: 4) indirect;labordirect;laborsalaries;for the accounting personnelwages for the janitorial staff for;the sales offices;6.(TCO;1) Which of the following is not a period cost? (Points: 4) advertising;costsaccounting;staff salariesdirect materialsdepreciation;of accounting office equipment;7.(TCO;1) Red Runner?s Work in Process Inventory account has a beginning balance;of $50,000 and an ending balance of $40,000. Direct materials used are;$70,000 and direct labor used totals $35,000. Cost of goods sold totals;$135,000. Manufacturing overhead applied is $20,000. How much is cost of;goods manufactured? (Points;4) $145,000$115,000$125,000$135,000;8.(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? (Points: 4) 177,000179,950171,100168,200;9.(TCO;2) During 2011, Madison Company applied overhead using a job-order costing;system at a rate of $12 per direct labor hours. Estimated direct labor;hours for the year were 150,000, and estimated overhead for the year was $1,800,000.;Actual direct labor hours for 2011 were 140,000 and actual overhead was;$1,670,000.;What is the amount of under or over applied overhead for the year? (Points: 4) $10,000 underapplied$10,000;overapplied$130,000 underapplied$130,000;overapplied;10.(TCO;3) Which of the following companies is most likely to use a process costing;system? (Points: 4) a law;officea;custom home buildera car;repair businessa food manufacturer;11.(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? (Points: 4) 12,00028,00040,00052,000;12.(TCO;3) During March, the varnishing department incurred costs of $90,250 for direct;labor. The beginning inventory was 3,500 units and 10,000 units were;transferred to the varnishing department from the sanding department during;June. The direct labor cost in the beginning inventory was $27,270. The;ending inventory consisted of 2,000 units, which were 25% complete with;respect to direct labor. What is the cost per equivalent unit for direct;labor? (Points: 4) $8.71$7.84$11.19$9.79;13.(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. (Points: 4) $80,115$76,000$79,800$91,800;1.(TCO 4);The three elements of the profit margin are: (Points: 4) Selling;price per unit, variable cost per unit, and fixed cost per unit.Total revenues, total variable costs;and total fixed cost.Selling;price per unit, variable cost per unit, and total fixed costs.Selling;price per unit, total variable costs, and fixed cost per unit.;2.(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. What is Allen?s break-even point in units if it;purchases the new equipment?(Points;4) 2,480;units36,000;units2,100 units3,650;units;3.(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, what is Paula?s margin of safety? (Points: 4) $468,140$124,025$700,975$405,000;4.(TCO 5);In variable costing, when does fixed manufacturing overhead become an;expense? (Points: 4) NeverIn the;period when the product is soldIn the period when the expense is;incurredIn the;period when other expenses are at the lowest level;5.(TCO 5);Variable costing income is a function of: (Points: 4) Units;sold only.Units;produced onlyBoth units sold and units produced.Neither;units sold nor units. produced;6.(TCO 5);Peak Manufacturing produces snow blowers. The selling price per snow blower;is $100. Costs involved in production are;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?(Points;4) $0$49,500$148,500$99,000;7.(TCO 5);The cost objective is the (Points;4) reason for allocating the cost.calculation;based on budgeted amounts.product;service, or department that is to receive the allocation.maximum;amount to be allocated to any single department.;8.(TCO 6);Which of the following statements about cost pools is not;true? (Points: 4) The;costs in each of the cost pools should be homogeneous or similar.Managers;must make a cost-benefit decision when determining how many cost pools are;appropriate.Only four different kinds of costs;may be included in a single cost pool.More;cost pools usually provide more accurate information, but are more expensive.;9.(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?(Points: 4) $1,400,000$1,050,000$1,575,000$2,100,000;10.(TCO 7);A company is trying to decide whether to sell partially completed goods in;their current state or incur additional costs to finish the goods and sell;them as complete units. Which of the following is not relevant;to the decision? (Points;4) The;selling price of the completed units.The costs incurred to process the;units to this point.The;selling price of the partially completed units.The;costs that will be incurred to finish the units.;11.(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. What is the net advantage or disadvantage of;reworking the computers? (Points;4) $1,200;advantage$1,200 disadvantage$9,200;disadvantage$9,700;advantage;12.(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.;Which of the following is the amount of sunk costs in this problem? (Points: 4) $160 per unit$10 per;unit$125;per unit$100;per unit;1.(TCO;3) Why is it necessary to use equivalent units in a process costing system? (Points: 20) After materials, labor and overhead costs have been accumulated in a department, the department's output must be determined so that unit cost can be computed. A department usually has some partially completed units in its ending inventory. It does not seem reasonable to count these partially completed units as equivalent to fully completed units when counting the department's out put. These partially converted units are mathematically converted into an equivalent number of fully completed units. It is necessary to use equivalent units of production in a process costing system to make sense of productive cycles that are not fully completed.;2.(TCO;7) Computer Boutique sells computer equipment and home office furniture.;Currently, the furniture product line takes up approximately 50% of the;company's retail floor space. The president of Computer Boutique is trying;to decide whether the company should continue offering furniture or just;concentrate on computer equipment. If furniture is dropped, salaries and;other direct fixed costs can be avoided. In addition, sales of computer;equipment can increase by 13%. Allocated fixed costs are assigned based on;relative sales.;Computer;Home;Office;Equipment;Furniture;Total;Sales;$1,200,000;$800,000;$2,000,000;Less cost of goods sold;700,000;500,000;1,200,000;Contribution margin;500,000;300,000;800,000;Less direct fixed costs;Salaries;175,000;175,000;350,000;Other;60,000;60,000;120,000;Less allocated fixed costs;Rent;14,118;9,882;24,000;Insurance;3,529;2,471;6,000;Cleaning;4,117;2,883;7,000;President's salary;76,470;53,350;130,000;Other;7,058;4,942;12,000;Total costs;340,292;380,708;649,000;Net Income;$159,708;($ 8,708);$151,000;Prepare an incremental analysis to determine the incremental effect on profit;of discontinuing the furniture line.;(Points: 25) Incremental Analysis;Sales $1,200,000;Less: COGS $700,000;Contribution Margin $500,000;Less Direct Fixed Costs;Salaries $175,000;Other $60,000;Less Allocated Fixed Costs;Rent $24,000;Insurance $6,000;Cleaning $7,000;President's Salary $130,000;Other $12,000;Total Costs $414,000;Net Income $86,000;If the furniture department is discontinued, net income will drop by $65,000;3.(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 breakeven 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? (Points;25) a) Breakeven point= fixed expenses / contribution margin per unit = $64,960 / (84 - 28) = 64,960 / 56 = 1160 units;b) Profit / contribution margin per unit = 24,640 / 56 = 440 additional units + 1160 breakeven units = 1600 units must be sold to make desired profit.;c) Cost / contribution margin = 1792 / 56 = 32 additional units must be sold to cover this cost.


Paper#43567 | Written in 18-Jul-2015

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