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ACCT 505 Midterm

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Question;Keller Graduate School of ManagementACCT 505 Midterm1. Question;(TCO A) The variable portion;of advertising costs is a;Conversion YES... Period NO.;Conversion YES.... Period YES.;Conversion NO.... Period YES.;Conversion NO.... Period NO.;Instructor Explanation: Chapter 2;Points Received: 0 of 6;Comments;2. Question: (TCO A) A cost;incurred in the past that is not relevant to any current decision is classified;as a(n);period cost.;incremental cost.;opportunity cost.;None of the above;Instructor Explanation: Chapter 2;Points Received: 6 of 6;Comments;3. Question: (TCO A) Depreciation of office buildings and office;equipment is also known as;variable costs.;conversion costs.;product costs.;period costs.;Instructor Explanation: Chapter 2;Points Received: 6 of 6;Comments;4. Question: (TCO A) When the;activity level is expected to increase within the relevant range, what effects;would be anticipated with respect to each of the following?;Fixed costs per unit increase and variable costs per unit increase.;Fixed costs per unit decrease and variable;costs per unit do not change.;Fixed costs per unit do not change and;variable costs per unit do not change.;Fixed costs per unit do not change and;variable costs per unit increase.;Instructor Explanation: Chapter 5;Points Received: 6 of 6;Comments;5. Question: (TCO F) Emco Company uses direct labor cost as a basis for;computing its predetermined overhead rate. In computing the predetermined;overhead rate for last year, the company included in direct labor cost a;portion of indirect labor. The effect of this misclassification will be to;understate the predetermined overhead rate.;overstate the predetermined overhead rate.;have no effect on the predetermined overhead;rate.;This cannot be determined from the;information given.;Instructor Explanation: Chapter 3;Points Received: 6 of 6;Comments;6. Question: (TCO F) Which of the following statements about the;process-costing system is incorrect?;In a process-costing system, each processing department has a work-in-process;account.;In a process-costing system, equivalent units;are separately computed for materials and for conversion costs.;In a process-costing system, overhead can be;under- or overapplied just as in job-order costing.;In a process-costing system, materials costs;are traced to units of products.;Instructor Explanation: Chapter 4;Points Received: 6 of 6;Comments;7. Question: (TCO F) The FIFO;method only provides a major advantage over the weighted-average method in that;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.;Instructor Explanation: Chapter 4;Points Received: 6 of 6;Comments;8. Question: (TCO B) The;contribution margin equals;sales - expenses.;sales - cost of goods sold.;sales - variable costs.;sales - fixed costs.;Instructor Explanation: Chapter 6;Points Received: 6 of 6;Comments;9. Question: (TCO B) To obtain;the break-even point in terms of dollar sales, total fixed expenses are divided;by which of the following?;Variable expense per unit;Variable expense per unit/Selling price per;unit;Fixed expense per unit;(Selling price per unit - Variable expense;per unit) /Selling price per unit.;Instructor Explanation: Chapter 6;Points Received: 6 of 6;Comments;10. Question: (TCO E) In an income statement prepared using the variable;costing method, fixed manufacturing overhead would;not be used.;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;overhead.;Instructor Explanation: Chapter 7;Points Received: 6 of 6;Comments;1. Question: (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 $220;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.;2. Question: (TCO F) The Illinois Company manufactures a product that;goes through three processing departments. Information relating to activity in;the first department during June is given below.;Percentage;Completed;Units Materials Conversion;Work in process, June 1 150,000 75% 55%;Work in process, Jun 30 145,000 85% 75%;The department started 475,000 units into production during;the month and transferred 480,000 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.;3. Question: (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?;4. Question: (TCO E) The Dean Company produces and sells a single;product. The following data refer to the year just completed;Selling price;$450;Units in beginning Inventory 0;Units produced 25,000;Units sold 22,000;Variable costs per unit;Direct materials;$ 200;Direct labor;$ 50;Variable manufacturing overhead $ 30;Variable selling and admin;$ 15;Fixed Costs;Fixed manufacturing overhead;$ 275,000;Fixed selling and admin;$ 230,000;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#51424 | Written in 18-Jul-2015

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