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Final exam questions




Question;1. The work-in-process inventory account of a manufacturing;company shows a balance of $3,000 at the end of an accounting period. The;job-cost sheets of the two incomplete jobs show charges of $500 and $300 for;direct materials, and charges of $400 and $600 for direct labor. From this information, it appears that the;company is using a predetermined overhead rate as a percentage of direct labor costs. What percentage is the rate?;2. The break-even point in dollar sales for Rice Company;is $480,000 and the company?s;contribution margin ratio is 40 percent. If Rice Company desires a profit;of $84,000, how much would sales have to;total?3. Williams Company?s direct labor cost is 25 percent of its;conversion cost. If the manufacturing overhead for the last period was $45,000;and the direct material cost was $25,000, how much is the direct labor cost?4. Grading Company?s cash and cash equivalents consist;of cash and marketable securities. Last;year the company?s cash account;decreased by $16,000 and its marketable securities account increased by;$22,000. Cash provided by operating activities was $24,000. Net cash used for;financing activities was $20,000. Based on this information, was the net cash;flow from investing activities on the statement of cash flows a net increase or;decrease? By how much?5. Gladstone Footwear Corporation?s flexible budget;cost formula for supplies, a variable;cost, is $2.82 per unit of output. The company?s flexible budget performance;report for last month showed an $8,140 unfavorable spending variance for supplies. During that month;21,250 units were produced. Budgeted activity for the month had been 20,900;units. What is the actual cost per unit for indirect materials?6. Lyons Company consists of two divisions, A and B. Lyons;Company reported a contribution margin of $60,000 for Division A, and had a;contribution margin ratio of 30 percent in Division B, when sales in Division B;were $240,000. Net operating income for the company was $22,000 and traceable;fixed expenses were $45,000. How much were Lyons Company?s common fixed;expenses?7. Atlantic Company produces a single product. For the;most recent year, the company?s net;operating income computed by the absorption costing method was $7,800, and its;net operating income computed by the variable costing method was $10,500. The;company?s unit product cost was $15 under variable costing and $24 under;absorption costing. If the ending;inventory consisted of 1,460 units, how many units must have been in the;beginning inventory.8. Black Company uses the weighted-average method in its;process costing system. The company?s ending work-inprocess inventory consists;of 6,000 units, 75 percent complete with respect to materials and 50 percent;complete with respect to labor and overhead. If the total dollar value of the inventory is $80,000 and;the cost per equivalent unit for labor and overhead is $6.00, what is the cost;per equivalent unit for materials?9. At Overland Company, maintenance cost is exclusively a;variable cost that varies directly with machine-hours. The performance report;for July showed that actual maintenance costs totaled $11,315 and that the;associated rate variance was $146 unfavorable. If 7,300 machine-hours were;actually worked during July, what is the budgeted maintenance cost per;machine-hour?10. The cost of goods sold in a retail store totaled;$650,000. Fixed selling and administrative expenses totaled $115,000 and;variable selling and administrative expenses were $420,000. If the store?s contribution margin totaled $590,000, how much were the sales?11. Denny Corporation is considering replacing a;technologically obsolete machine with a;new state-of-the-art numerically;controlled machine. The new machine would cost $600,000 and would have a;10-year useful life. Unfortunately, the new machine would have no salvage;value. The new machine would cost $20,000 per year to operate and maintain, but would save $125,000;per year in labor and other costs. The old machine can be sold now for scrap for;$50,000. What percentage is the simple rate of return on the new machine;rounded to the nearest tenth of a percent? (Ignore income taxes in this;problem.)12. Lounsberry Inc. regularly uses material O55P and;currently has in stock 375 liters of the material, for which it paid $2,700;several weeks ago. If this were to be sold as is on the open market as surplus;material, it would fetch $6.35 per liter. New stocks of the material can be;purchased on the open market for $7.20 per liter, but it must be purchased in;lots of 1,000 liters. You?ve been asked to determine the relevant cost of 900;liters of the material to be used in a job for a customer. What is the relevant;cost of the 900 liters of material O55P?13. Harwichport Company has a current ratio of 3.0 and an;acid-test ratio of 2.8. Current assets equal $210,000, of which $5,000 consists;of prepaid expenses. The remainder of current assets consists of cash, accounts;receivable, marketable securities, and inventory. What is the amount of;Harwichport Company?s inventory?14. Tolla Company is estimating the following sales for the;first six months of next year;January $350,000;February $300,000;March $320,000;April $410,000;May $450,000;June $470,000;Sales at Tolla are normally collected as 70 percent in the;month of sale, 25 percent in the month following the sale, and the remaining 5;percent being uncollectible. Also, customers paying in the month of sale are;given a 2 percent discount. Based on this information, how much cash should;Tolla expect to collect during the month of April?15. Trauscht Corporation has provided the following data;from its activity-based costing system;Activity Cost Pool Total;Cost Total;Activity;Assembly $704,880;44,000;machine-hours;Processing orders;$91,428 1,900;orders;Inspection $117,546;1,950;inspection-hours;The company makes 360 units of product P23F a year;requiring a total of 725 machine-hours, 85 orders, and 45 inspection-hours per;year. The product?s direct materials cost is $42.30 per unit and its direct labor;cost is $14.55 per unit. The product sells for $132.10 per unit. According to;the activity-based costing system, what is the product margin for product P23F?;16. Williams Company?s direct labor cost is 30 percent of;its conversion cost. If the manufacturing overhead for the last period was;$59,500 and the direct materials cost was $37,000, what is the direct labor;cost?17. In a recent period, 13,000 units were produced, and;there was a favorable labor efficiency variance of $23,000. If 40,000;labor-hours were worked and the standard wage rate was $13 per labor-hour, what;would be the standard hours allowed per unit of output?18. The balance in White Company?s work-in-process inventory;account was $15,000 on August 1 and $18,000 on August 31. The company incurred;$30,000 in direct labor cost during August and requisitioned $25,000 in raw;materials (all direct material). If the sum of the debits to the manufacturing;overhead account total $28,000 for the month, and if the sum of the credits;totaled $30,000, then was Finished Goods debited or credited? By how much?19. A company has provided the following data;Sales 4,000 units;Sales price $80 per unit;Variable cost $50 per unit;Fixed cost $30,000;If the dollar contribution margin per unit is increased by;10 percent, total fixed cost is decreased by 15 percent, and all other factors;remain the same, will net operating income increase or decrease? By how much?20. For the current year, Paxman Company incurred $175,000;in actual manufacturing overhead cost. The manufacturing overhead account;showed that overhead was overapplied in the amount of $9,000 for the year. If;the predetermined overhead rate was $8.00 per direct labor-hour, how many hours;were worked during the year?


Paper#51245 | Written in 18-Jul-2015

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