ACCT 505 Midterm Week 4 (Spring 2016)

ACCT 505 Midterm Week 4 (Spring
2016)
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ACCT 505 Midterm Week 4 (Spring 2016)
1. (TCO A) The variable portion of advertising costs is a
2. (TCO A) The costs of staffing and operating the accounting department at Central Hospital would be
considered by the department of surgery to be
3. (TCO A) Property taxes on a company's factory building would be classified as a(n)
4. (TCO C) Within the relevant range, variable costs can be expected to
5. (TCO B) Emco Company uses direct labor cost as a basis for computing its predetermined overhead
rate. In computing the predetermined overhead rate for last year, the company included in direct labor
cost a portion of indirect labor. The effect of this misclassification will be to
6. (TCO B) A job-order cost system is employed in those situations when
7. (TCO B) The weighted-average method of process costing differs from the FIFO method of process
costing in that the weighted-average method
8. (TCO C) The contribution margin ratio always increases when the
9. (TCO C) To obtain the break-even point in terms of dollar sales, total fixed expenses are divided by
which of the following?
10. (TCO D) In an income statement prepared using the variable costing method, fixed
manufacturing overhead would
11. (TCO A) The following data (in thousands of dollars) have been taken from the accounting
records of Larop Corporation for the just-completed year.
Sales $950
Purchases of raw
$225
materials
Direct labor $250
Manufacturing
$295
overhead
Administrative
$150
expenses
Selling expenses $140
Raw materials $30

inventory, beginning
Raw materials
inventory, ending
$45
Work-in-process
inventory, beginning $20
Work-in-process
inventory, ending
$55
Finished goods
inventory, beginning $100
Finished goods
inventory, ending
$135
12.
Prepare a Schedule of Cost of Goods Manufactured statement in the text box below.
13. (TCO B) The Florida Company manufactures a product that goes through three processing
departments. Information relating to activity in the first department during June is given below.
Percentage Completed
Units Materials Conversion
Work in process, June 1 160,000 65% 45%
Work in process, Jun 30 130,000 75% 65%
14.
The department started 650,000 units into production during the month and transferred 680,000
completed units to the next department.
Required: Compute the equivalent units of production for the first department for June, assuming that the
company uses the weighted-average method of accounting for units and costs.
15. (TCO C) A cement manufacturer has supplied the following data.
Tons of cement produced and sold 220,000
Sales revenue $924,000
Variable manufacturing expense $297,000
Fixed manufacturing expense $280,000
Variable selling and admin expense $165,000
Fixed selling and admin expense $82,000
Net operating income $100,000
16.
Required:
Calculate the company's unit contribution margin.
Calculate the company's contribution margin ratio.
If the company increases its unit sales volume by 5% without increasing its fixed expenses, what would
the company's net operating income be?
17. (TCO D) Johnson Company, which has only one product, has provided the following data
concerning its most recent month of operations.
Selling price $175
Units in beginning
inventory
0
Units produced 9,500
Units sold 8,000
Units in ending Inventory 1,500
Variable costs per unit:
Direct materials $50
Direct labor $36
Variable manufacturing $2

overhead
Variable selling and
admin
$10
Fixed costs:
Fixed manufacturing
$300,000
overhead
Fixed selling and admin $100,000
18.
Required:
What is the unit product cost for the month under variable costing?
What is the unit product cost for the month under absorption costing?
Prepare an income statement for the month using the variable costing method.
Prepare an income statement for the month using the absorption costing method.