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ACCT 344 - Cost Accounting Week 8 Final Exam




(TCO 2) Which cost is NOT a period cost? (Points: 5);Lumber for furniture;Executive administrative assistant salary;Depreciation on sales staff's cars;Sales commission;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) As production occurs, materials, direct labor, and applied manufacturing overhead are recorded in (Points: 5);cost of goods sold.;work-in-process.;materials.;finished goods.;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 value-added costs are (Points: 5);$300,000.;$150,000.;$60,000.;$0.;Question 5.5. (TCO 8) Which is a value-added activity? (Points: 5);Moving;Inspection;Processing;Waiting;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 Kringel Company provides the following information.;Sales (200,000 units) $500,000;Manufacturing costs;Variable $170,000;Fixed $30,000;Selling and administrative costs;Variable $80,000;Fixed $20,000;Which is the break-even point in units for Kringel? (Points: 5);33,334 units;100,000 units;40,000 units;200,000 units;Question 8.8. (TCO 7) Which would be the most appropriate base for allocating the costs of the maintenance department? (Points: 5);Machine hours;Direct labor hours;Number of employees;Square feet;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 Cosmetics Department if newspaper ad space is the activity driver?(Points: 5);$8,000;$1,600;$1,400;$6,400;Question 10.10. (TCO 5) Which best describes zero-base budgeting? (Points: 5);A budget that is developed for a single level of activity;A budget that analyzes existing activities (and continuation of that activity must be justified and resources needed must be justified by each manager);A budget that is based solely on prior period information, adjusted for inflation;A budget that is continuous or rolling;Question 11.11. (TCO 5) Bug Company manufactures buggies. Manufacturing a buggy takes 20 units of wood and 1 unit of steel. Scheduled production of buggies for the next 2 months is 500 and 600 units, respectively. Beginning inventory is 4,000 units of wood and 30 units of steel. The ending inventory of wood is planned to decrease 500 units in each of the next 2 months, and the steel inventory is expected to increase 5 units in each of the next 2 months.;How many units of wood are expected to be used in production during the second month? (Points: 5);12,500 units;10,000 units;15,000 units;12,000 units;Question 12.12. (TCO 4) Which statement is true? (Points: 5);Absorption costing net income exceeds variable costing net income when units produced and sold are equal.;Variable costing net income exceeds absorption costing net income when units produced exceed units sold.;Absorption costing net income exceeds variable costing net income when units produced are less than units sold.;Absorption costing net income exceeds variable costing net income when units produced are greater than units sold.;Question 13.13. (TCO 6) Using more highly skilled direct laborers might affect which variance? (Points: 5);Direct materials usage variance;Direct labor efficiency variance;Variable manufacturing overhead efficiency variance;All of the above;Question 14.14. (TCO 6) Which equation measures the total budget variance? (Points: 5);AQ x (AP - SP).;SP x (AQ - SQ).;SQ x (AP - SP).;(AQ x AP) - (SQ x SP).;(TCO 1) George Corporation has an estimated monthly sales of 12,000 units for $80 per unit. Variable costs include manufacturing costs of $50 and distribution costs of $20. Fixed costs are $60,000 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);Question 2.2. (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 net realizable value method. (Points: 30);Question 3.3. (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 $16,000;Actual results and costs;Materials purchased;Units 10,000;Cost $38,500;Materials used in production;Finished product units 2,200;Raw material (ounces) 9,500;Direct labor hours 2,200;Direct labor cost $18,000;Variable overhead costs $8,400;Fixed overhead costs $16,200;Required;Compute the following variances (show calculations).;a. Materials usage variance;b. Labor rate variance;-c. Fixed overhead budget variance;(Points: 30);Question 4.4. (TCO 4) Toshi Company incurred the following costs in manufacturing desk calculators.;Direct materials $14;Indirect materials (variable) 4;Direct labor 8;Indirect labor (variable) 6;Other variable factory overhead 10;Fixed factory overhead 28;Variable selling expenses 20;Fixed selling expenses 14;During the period, the company produced and sold 1,000 units.;a. What is the inventory cost per unit using absorption costing?;b. What is the inventory cost per unit using variable costing? (Points: 30);Question 5.5. (TCO 8) Musical Instruments Company manufactures two products (trumpets and trombones). Overhead costs ($175,000) have been divided into three cost pools that use the following activity drivers.;Product Number of setups Machine hours Packing orders;Trumpets 50 1,500 150;Trombones 50 4,500 250;Cost per pool $60,000 $90,000 $25,000;Required (show all calculations);a. What is the allocation rate for trumpets per setup using activity-based costing?;b. What is the allocation rate for trumpets per machine hours using activity-based costing?;c. What is the allocation rate for trumpets per packing order using activity-based costing?;(Points: 30);Question 6.6. (TCO 5) The Baxter Corporation has the following budgeted and actual results.;Budgeted data Actual results;Unit sales 35,000 Unit sales 36,000;Unit production 35,000 Unit production 37,000;Fixed overhead Fixed overhead;Supervision $25,000 Supervision $23,500;Depreciation $40,000 Depreciation $40,000;Rent $20,000 Rent $20,000;Variable costs per unit Variable costs;Direct materials $25.00 Direct materials $900,000;Direct labor $26.00 Direct labor $950,000;Supplies $0.25 Supplies $9,000;Indirect labor $1.30 Indirect labor $50,000;Electricity $0.20 Electricity $7,500;Required;Prepare a performance report for all costs, showing flexible budget variances (indicate F or U).


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