ACCT 346 Midterm Exam 2

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5. Question : (TCO 1) Which of the following is an example of a manufacturing overhead cost? Student Answer: security at the manufacturing plant fabric used to produce shirts cost of shipping product to customers the salary of the president of the company 6. Question : (TCO 1) Which of the following is a period cost? Student Answer: rent on a factory building depreciation on production equipment raw materials cost commissions paid on each unit sold 7. Question : (TCO 1) If the balance in the Finished Goods Inventory account increased by $30,000 during the period and the cost of goods manufactured was $220,000, how much is cost of goods sold? Student Answer: $110,000 $190,000 $220,000 $250,000 8. Question : (TCO 2) BCS Company applies manufacturing overhead based on direct labor cost. Information concerning manufacturing overhead and labor for August follows: Estimated Actual Overhead cost $174,000 $171,000 Direct labor hours 5,800 5,900 Direct labor cost $87,000 $89,975 How much is the predetermined overhead rate? Student Answer: 2.00 1.90 30.00 1.93 9. Question : (TCO 2) During 2011, Madison Company applied overhead using a job-order costing system at a rate of $12 per direct labor hours. Estimated direct labor hours for the year were 150,000, and estimated overhead for the year was $1,800,000. Actual direct labor hours for 2011 were 140,000 and actual overhead was $1,670,000. What is the amount of under or over applied overhead for the year? Student Answer: $10,000 overapplied $130,000 underapplied $130,000 overapplied $10,000 underapplied
10. Question : (TCO 3) Companies in which of the following industries wouldnot be likely to use process costing? Student Answer: cereals paints cosmetics auto body shop 11. Question : (TCO 3) The Blending Department began the period with 45,000 units. During the period the department received another 30,000 units from the prior department and completed 60,000 units during the period. The remaining units were 75% complete. How much are equivalent units in The Blending Department’s work in process inventory at the end of the period? Student Answer: 30,000 22,500 15,000 11,250 12. Question : (TCO 3) During March, the varnishing department incurred costs of $90,250 for direct labor. The beginning inventory was 3,500 units and 10,000 units were transferred to the varnishing department from the sanding department during June. The direct labor cost in the beginning inventory was $27,270. The ending inventory consisted of 2,000 units, which were 25% complete with respect to direct labor. What is the cost per equivalent unit for direct labor? Student Answer: $8.71 $7.84 $11.19 $9.79 13. Question : (TCO 4) Clearance Depot has total monthly costs of $8,000 when 2,500 units are produced and $12,400 when 5,000 units are produced. What is the estimated total monthly fixed cost? Student Answer: $4,400 $6,580 $3,600 $8,800 1. Question : (TCO 4) The margin of safety is the difference between Student Answer: total revenue and total fixed costs. expected level of sales and the break-even point. budgeted fixed costs and actual fixed costs. selling price and variable cost per unit. 2. Question : (TCO 4) Allen Company sells homework machines for $100 each. Variable costs per unit are $75 and total fixed costs are $62,000. Allen is considering the purchase of new equipment that would increase fixed costs to $84,000, but decrease the variable costs per unit to $60. At that level
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Page 5 and 6: 7. Question : (TCO 6) Costs may be
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