18.03.2016 Views

DEVRY ACCT 346 Week 4 Midterm 1

DEVRY ACCT 346 Week 4 Midterm 1 Check this A+ tutorial guideline at http://www.assignmentcloud.com/acct-346/acct-346-week-4-midterm-1

DEVRY ACCT 346 Week 4 Midterm 1

Check this A+ tutorial guideline at

http://www.assignmentcloud.com/acct-346/acct-346-week-4-midterm-1

SHOW MORE
SHOW LESS

Create successful ePaper yourself

Turn your PDF publications into a flip-book with our unique Google optimized e-Paper software.

<strong>DEVRY</strong> <strong>ACCT</strong> <strong>346</strong> <strong>Week</strong> 4 <strong>Midterm</strong> 1<br />

Check this A+ tutorial guideline at<br />

http://www.assignmentcloud.com/acct-<br />

<strong>346</strong>/acct-<strong>346</strong>-week-4-midterm-1<br />

For more classes visit<br />

http://www.assignmentcloud.com<br />

1. Question : (TCO 1) Managerial accounting stresses accounting concepts and<br />

procedures that are relevant to preparing reports for<br />

2. Question : TCO 1) Which of the following statements regarding fixed costs is true?<br />

3. Question : TCO 1) You own a car and are trying to decide whether or not to trade it<br />

in and buy a new car. Which of the following costs is an opportunity cost in this<br />

situation?<br />

4. Question :(TCO 1) Shula’s 347 Grill has budgeted the following costs for a month in<br />

which 1,600 steak dinners will be produced and sold: materials, $4,080; hourly labor<br />

(variable), $5,200; rent (fixed), $1,700; depreciation, $800; and other fixed costs,<br />

$600. Each steak dinner sells for $14.00 each. How much is the budgeted variable<br />

cost per unit?<br />

5. Question : (TCO 1) Which of the following is an example of a manufacturing<br />

overhead cost?<br />

6. Question : (TCO 1) Which of the following is a period cost?<br />

7. Question : (TCO 1) If the balance in the Finished Goods Inventory account<br />

increased by $30,000 during the period and the cost of goods manufactured was<br />

$220,000, how much is cost of goods sold?


8. Question : (TCO 2) BCS Company applies manufacturing overhead based on direct<br />

labor cost. Information concerning manufacturing overhead and labor for August<br />

follows:<br />

Estimated<br />

Actual<br />

9.Question : (TCO 2) During 2011, Madison Company applied overhead using a joborder<br />

costing system at a rate of $12 per direct labor hours. Estimated direct labor<br />

hours for the year were 150,000, and estimated overhead for the year was<br />

$1,800,000. Actual direct labor hours for 2011 were 140,000 and actual overhead<br />

was $1,670,000.<br />

What is the amount of under or over applied overhead for the year?<br />

10. Question : (TCO 3) Companies in which of the following industries would not be<br />

likely to use process costing?<br />

11. Question : (TCO 3) The Blending Department began the period with 45,000 units.<br />

During the period the department received another 30,000 units from the prior<br />

department and completed 60,000 units during the period. The remaining units<br />

were 75% complete. How much are equivalent units in The Blending Department’s<br />

work in process inventory at the end of the period?<br />

12. Question : (TCO 3) During March, the varnishing department incurred costs of<br />

$90,250 for direct labor. The beginning inventory was 3,500 units and 10,000 units<br />

were transferred to the varnishing department from the sanding department during<br />

June. The direct labor cost in the beginning inventory was $27,270. The ending<br />

inventory consisted of 2,000 units, which were 25% complete with respect to direct<br />

labor. What is the cost per equivalent unit for direct labor?<br />

13. Question : (TCO 4) Clearance Depot has total monthly costs of $8,000 when 2,500<br />

units are produced and $12,400 when 5,000 units are produced. What is the<br />

estimated total monthly fixed cost?<br />

1. Question : (TCO 4) The margin of safety is the difference between<br />

2. Question : (TCO 4) Allen Company sells homework machines for $100 each.<br />

Variable costs per unit are $75 and total fixed costs are $62,000. Allen is considering<br />

the purchase of new equipment that would increase fixed costs to $84,000, but<br />

decrease the variable costs per unit to $60. At that level Allen Company expects to<br />

sell 3,000 units next year. What is Allen’s break-even point in units if it purchases the<br />

new equipment?


3.Question : (TCO 4) Paula Corporation sells a single product at a price of $275 per<br />

unit. Variable cost per unit is $135 and fixed costs total $356,860. If sales are<br />

expected to be $825,000, what is Paula’s margin of safety?<br />

4. Question : (TCO 5) In variable costing, when does fixed manufacturing overhead<br />

become an expense?<br />

5. Question : (TCO 5) Variable costing income is a function of:<br />

6. Question : (TCO 5) Peak Manufacturing produces snow blowers. The selling price<br />

per snow blower is $100. Costs involved in production are:<br />

Direct Material per unit<br />

$20<br />

Direct Labor per unit<br />

12<br />

Variable manufacturing overhead per unit<br />

10<br />

Fixed manufacturing overhead per year<br />

$148,500<br />

In addition, the company has fixed selling and administrative costs of $150,000 per<br />

year. During the year, Peak produces 45,000 snow blowers and sells 30,000 snow<br />

blowers. How much is cost of goods sold using full costing?<br />

7.Question : (TCO 6) Costs may be allocated to<br />

8. Question : (TCO 5) An allocation base<br />

9. Question : (TCO 6) The building maintenance department for Jones Manufacturing<br />

Company budgets annual costs of $4,200,000 based on the expected operating level<br />

for the coming year. The costs are allocated to two production departments. The<br />

following data relate to the potential allocation bases:<br />

Production Dept. 1<br />

Production Dept. 2<br />

Square footage<br />

15,000<br />

45,000<br />

Direct labor hours<br />

25,000<br />

50,000<br />

If Jones assigns costs to departments based on square footage, how much total costs<br />

will be allocated to Production Department 1<br />

10. Question : (TCO 7) A company is trying to decide whether to sell partially<br />

completed goods in their current state or incur additional costs to finish the goods


and sell them as complete units. Which of the following is not relevant to the<br />

decision?<br />

11. Question : (TCO 7) BigByte Company has 12 obsolete computers that are carried<br />

in inventory at a cost of $13,200. If these computers are upgraded at a cost of $7,500,<br />

they could be sold for $15,300. Alternatively, the computers could be sold "as is" for<br />

$9,000. What is the net advantage or disadvantage of reworking the computers?<br />

12. Question : (TCO 7) Olde Store has 12,000 cans of crab meat just a week past the<br />

expiration date. Each can cost $0.31. The cans could be sold as is for $0.20 each, or<br />

relabeled and sold as gourmet cat food. The cost of relabeling the cans would be<br />

$0.04 per can and the cans would then sell for $0.29 per can. What should be done<br />

with the cans and why?<br />

1. Question : (TCO 3) Describe a process costing system, including the types of<br />

companies that commonly use this system. How can process costing information be<br />

used in incremental analysis?<br />

2. Question : (TCO 7) Each year, ACE Engines surveys 7,600 former and prospective<br />

customers regarding satisfaction and brand awareness. For the current year, the<br />

company is considering outsourcing the survey to RBG Associates, who have offered<br />

to conduct the survey and summarize results for $50,000. Robert Ace, the president<br />

of ACE Engines, believes that RBG will do a higher-quality job than his company has<br />

been doing, but is unwilling to spend more than $12,000 above current costs. The<br />

head of bookkeeping for ACE has prepared the following summary of costs related to<br />

the survey in the prior year.<br />

Prepare an incremental analysis in good form to determine the impact on profit of<br />

going outside versus conducting the survey as in the past. Will ACE accept the RBG<br />

offer? Why or why not?<br />

3. Question : (TCO 4) The following monthly data are available for RedEx, which<br />

produces only one product that it sells for $84 each. Its unit variable costs are $28<br />

and its total fixed expenses are $64,960. Sales during April totaled 1,600 units.

Hooray! Your file is uploaded and ready to be published.

Saved successfully!

Ooh no, something went wrong!