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##### Accounting 611 Midterm Exam - Spring 2014

**Description**

solution

**Question**

Problem 1;Using the following information find the unknown amounts. Assume each set of information is an independent case.;a. Merchandise Inventory Purchases $210,000;Cost of goods sold 223,000;Beginning balance 41,000;Ending balance?;b. Direct Materials Beginning balance $ 7,000;Ending balance 14,000;Purchases 48,000;Direct materials used?;c. Work-in-process Inventory Ending balance $ 22,000;Cost of goods manufactured 21,000;Beginning balance 8,000;Current manufacturing costs?;d. Finished Goods Inventory Cost of goods manufactured $62,000;Ending balance 20,000;Cost of goods sold 61,000;Beginning balance?;Problem 2;Sprint Manufacturing Company produces two products, X and Y. The following information is presented for both products;X Y;Selling price per unit $30 $20;Variable cost per unit 20 5;Total fixed costs are $292,500.;Required;a. Calculate the contribution margin for each product.;b. Calculate breakeven point in units of both X and Y if the sales mix is 3 units of X for every unit of Y.;c. Calculate breakeven volume in total dollars if the sales mix is 2 units of X for every 3 units of Y.;Problem 3;Rachel's Pet Supply Corporation manufactures two models of grooming stations, a standard and a deluxe model. The following activity and cost information has been compiled;Number of Number of Number of;Product Setups Components Direct Labor Hours;Standard 3 30 650;Deluxe 7 50 150;Overhead costs $40,000 $120,000;Assume a traditional costing system applies the $160,000 of overhead costs based on direct labor hours.;a. What is the total amount of overhead costs assigned to the standard model?;b. What is the total amount of overhead costs assigned to the deluxe model?;Assume an activity-based costing system is used and that the number of setups and the number of components are identified as the activity-cost drivers for overhead.;c. What is the total amount of overhead costs assigned to the standard model?;d. What is the total amount of overhead costs assigned to the deluxe model?;Problem 4;Clothes, Inc., has an average annual demand for red, medium polo shirts of 25,000 units. The cost of placing an order is $80 and the cost of carrying one unit in inventory for one year is $25.;Required;a. Use the economic-order-quantity model to determine the optimal order size.;b. Determine the reorder point assuming a lead time of 10 days and a work year of 250 days.;c. Determine the safety stock required to prevent stockouts assuming the maximum lead time is 20 days and the maximum daily demand is 125 units.;Problem 5;The following data are available for Ruggles Company for the year ended September 30, 2011.;Sales: 24,000 units at $50 each;Expected and actual production: 30,000 units;Manufacturing costs incurred;Variable: $525,000;Fixed: $372,000;Nonmanufacturing costs incurred;Variable: $144,800;Fixed: $77,400;Beginning inventories: none;Required;a. Determine operating income using the variable-costing approach.;b. Determine operating income using the absorption-costing approach.;Problem 6;Jerry's TV and Appliance Store is a small company that has hired you to perform some management advisory services. The following information pertains to 2011 operations.;Sales (1,000 televisions) $ 900,000;Cost of goods sold 400,000;Store manager's salary per year 70,000;Operating costs per year 157,000;Advertising and promotion per year 15,000;Commissions (4% of sales) 36,000;Part 1. What was the variable cost per unit sold for 2011?;A) $36;B) $436;C) $678;D) $400;Part 2 What were total fixed costs for 2011?;A) $678,000;B) $436,000;C) $242,000;D) $227,000;Part 3 What are the estimated total costs if Penny's expects to sell 3,000 units next year?;A) $1,550,000;B) $1,332,000;C) $1,671,000;D) $1,453,000;Part 4 Which cost estimation method is being used by Jerry's TV and Appliance Store?;A) the industrial engineering method;B) the conference method;C) the account analysis method;D) the quantitative analysis method

Paper#80972 | Written in 18-Jul-2015

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