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ACCT 334 FINAL 2014 VERSION A+++ SOLUTIONS FOR YOU

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1. (TCO 2) An example of a period cost is (Points: 5);insurance on factory machines.;a controller?s salary.;property taxes on factory building.;wages of factory maintenance employees.;Question 2. 2. (TCO 2) Which product would use job-order costing? (Points: 5);Ink pens;Custom boot maker;Soda pop;Horse saddles;Question 3. 3. (TCO 3) In a process costing system, which would be TRUE? (Points: 5);There is no need to use time tickets to assign costs to processes.;There is no need to track materials to processes.;A process costing system is more expensive to maintain because it has more work-in-process accounts.;All of the above;Question 4. 4. (TCO 8) A company keeps 60 days of materials inventory on hand to avoid shutdowns due to materials shortages. Carrying costs average $5,000 per day. A competitor keeps 30 days of inventory on hand, and the competitor's carrying costs average $2,000 per day. The non-value-added costs for the company are (Points: 5);$300,000.;$150,000.;$60,000.;$0.;Question 5. 5. (TCO 8) Non-value-added activities (Points: 5);are unnecessary inputs.;are valued outputs to internal users.;are valued outputs to external users.;help meet the organization's needs, not the product needs.;Question 6. 6. (TCO 1) The break-even point is (Points: 5);the volume of activity where all fixed costs are recovered.;where fixed costs equal total variable costs.;where total revenues equal total costs.;where total costs equal total contribution margin.;Question 7. 7. (TCO 1) The income statement for Thomas Manufacturing Company for 2011 is as follows.;Sales (10,000 units) $120,000;Variable expenses $72,000;Contribution margin $48,000;Fixed expenses $36,000;Operating income $12,000;Which is the contribution margin per unit? (Points: 5);$7.20;$1.20;$4.80;$120,000;Question 8. 8. (TCO 7) Which cost category would most likely use machine hours as its activity driver? (Points: 5);Personnel;Maintenance;Purchasing;Payroll;Question 9. 9. (TCO 7) Yo Department Store incurred $8,000 of indirect advertising costs for its operations. The following data have been collected for 2013 for its three departments.;Shoes;Cosmetics;Crafts;Sales;$120,000;$100,000;$100,000;Direct advertising costs;$9,000;$7,000;$4,000;Newspaper ad space;60%;20%;20%;How much of the indirect advertising costs will be allocated to the Shoes Department if newspaper ad space is the activity driver? (Points: 5);$8,000;$4,800;$5,400;$3,200;Question 10. 10. (TCO 5) A budget that is developed around one particular level of activity is (Points: 5);a static budget.;a continuous budget.;an incremental budget.;None of the above;Question 11. 11. (TCO 5) Amy Company produces and sells bikes. It expects to sell 15,000 bikes in March 2014 and had 1,200 bikes in finished goods inventory at the end of February 2014. Amy Company would like to complete operations in March with at least 1,500 completed bikes in inventory. The bikes sell for $100 each.;How many bikes would be produced in March? (Points: 5);15,300 bikes;15,000 bikes;14,700 bikes;13,800 bikes;Question 12. 12. (TCO 4) When monthly production volume is constant and sales volume is more than production, net income determined with variable costing procedures will (Points: 5);always be greater than net income determined using absorption costing.;always be less than net income determined using absorption costing.;be equal to net income determined using absorption costing.;be equal to contribution margin per unit times units sold;Question 13. 13. (TCO6) Which factor would cause an UNFAVORABLE material quantity variance? (Points: 5);Using poorly maintained machinery;Using higher quality materials;Using more highly skilled workers;Receiving discounts for purchasing larger-than-normal quantities;Question 14. 14. (TCO 6) Which equation measures a price variance? (Points: 5);AQ x (AP - SP).;SP x (AQ - SQ).;SQ x (AP - SP).;(AQ - SQ) x (AP - SP).;Essays;1. (TCO 1) George Corporation has an estimated monthly sales of 3,200 units for $70 per unit. Variable costs include manufacturing costs of $36 and distribution costs of $14. Fixed costs are $40,000 per month.;Required;Determine each of the following values.;a. Unit contribution margin;b. Monthly break-even unit sales volume;Create a contribution margin-based income statement. (Points: 30);2. (TCO 7) Darling Manufacturing Inc. manufactures two products, A and B, from a joint process. A single production costs $5,000 and results in 200 units of A and 800 units of B. To be ready for sale, both products must be processed further, incurring seperable costs of $3 per unit for A and $4 per unit for B. The market price for Product A is $15 and for Product B is $10.;Required: Allocate joint production costs to each product using the physical units method. (Points: 30);3. (TCO 6) Santa Inc. manufactures toys based on the following information.;Standard costs;Materials (4 ounces at $4);$16;Direct labor (1 hour per unit);$7;Variable overhead (based on direct labor hours);$3.50;Fixed overhead budget

 

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