(TCO A) The variable portion of the cost of electricity for a manufacturing plant is a: (Points: 6) Conversion YES... Period NO Conversion YES .... Period YES Conversion NO.... Period YES Conversion NO.... Period NO 2. (TCO A) A cost incurred in the past that is not relevant to any current decision is classified as a(n): (Points: 6) period cost. opportunity cost. sunk cost. differential cost. 3. (TCO A) Inventoriable costs are also known as: (Points: 6) variable costs conversion costs product costs fixed costs 4. (TCO A) Within the relevant range, variable costs can be expected to: (Points: 6) vary in total in direct proportion to changes in the activity level. remain constant in total as the activity level changes. increase on a per unit basis as the activity level increases. increase on a per unit basis as the activity level decreases. none of these. 5. (TCO F) Which of the following statements is true? I. Overhead application may be made slowly as a job is worked on. II. Overhead application may be made in a single application at the time of completion of the job. III. Overhead application should be made to any job not completed at year-end in order to properly value the work in process inventory. (Points: 6) Only statement I is true Only statement II is true Both statements I and II are true Statements I, II, and III are all true 6. (TCO F) A process cost system is employed in those situations in which: (Points: 6) many different products, jobs, or batches of production are being produced each period where manufacturing involves a single, homogeneous product that flows evenly through the production process on a continuous basis a service is performed such as in a law firm or an accounting firm full or absorption cost approach is not employed 7. (TCO F) The FIFO method only provides a major advantage over the weighted-average method in that (Points: 6) the calculation of equivalent units is less complex under the FIFO method the FIFO method treats units in the beginning inventory as if they were started and completed during the current period the FIFO method provides measurements of work done during the current period the weighted-average method ignores units in the beginning and ending work in process inventories 8. (TCO B) The contribution margin equals: (Points: 6) Sales - expenses Sales- cost of goods sold Sales - variable costs Sales - fixed costs 9. (TCO B) Which of the following would not affect the break-even point? (Points: 6) number of units sold variable expense per unit total fixed expenses selling price per unit 10. (TCO E) In an income statement prepared using the variable costing method, fixed selling and administrative expenses would: (Points: 6) be used in the computation of the contribution margin be used in the computation of net operating income but not in the computation of the contribution margin be treated the same as variable manufacturing expenses not be used (TCO A) The following data (in thousands of dollars) have been taken from the accounting records of Larden Corporation for the just completed year. Sales $950 Purchases of raw materials $170 Direct labor $210 Manufacturing overhead $200 Administrative expenses $180 Selling expenses $140 Raw materials inventory, beginning $70 Raw materials inventory, ending $80 Work in process inventory, beginning $30 Work in process inventory, ending $20 Finished goods inventory, beginning $100 Finished goods inventory, ending $70 Required: Prepare a Schedule of Cost of Goods Manufactured statement in the text box below. (Points: 15) 2. (TCO F) The Michigan Company manufactures a product that goes through three processing departments. Information relating to activity in the first department during June is given below: Percent completed Units Materials Conversion Work in process, June 1 40,000 65% 45% Work in process, Jun 30 35,000 75% 65% The department started 175,000 units into production during the month and transferred 180,000 completed units to the next department. REQUIRED: Compute the equivalent units of production for the first department for June, assuming that the company uses the weighted-average method of accounting for units and costs. (Points: 20) 3. (TCO B) A cement manufacturer has supplied the following data: Tons of cement produced and sold 220,000 Sales revenue $924,000 Variable manufacturing expense $297,000 Fixed manufacturing expense $280,000 Variable selling and admin expense $165,000 Fixed selling and admin expense $82,000 Net operating income $100,000 Required: a. Calculate the company's unit contribution margin b. Calculate the company's unit contribution ratio c. If the company increases its unit sales volume by 5% without increasing its fixed expenses, what would the company's net operating income be? (Points: 25) 4. (TCO E) The Dean Company produces and sells a single product. The following data refer to the year just completed: Selling Price $ 350 Units in beginning Inventory 0 Units Produced 20000 Units sold 19000 Variable Costs per unit: Direct materials $ 190 Direct labor $ 40 Variable manufacturing overhead $ 25 Variable selling and admin $ 10 Fixed Costs: Fixed manufacturing overhead $ 250,000 Fixed selling and admin $ 225,000 Assume that direct labor is a variable cost. Required: a. Compute the cost of a single unit of product under both the absorption costing and variable costing approaches. b. Prepare an income statement for the year using absorption costing. c. Prepare an income statement for the year using variable costing.
Paper#4598 | Written in 18-Jul-2015Price : $25