ACCT 346 Midterm 1 and 2

 ACCT 346 Midterm  1 and  2

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 ACCT 346 Midterm Exam  1 Solution  

(TCO 1) Managerial accounting stresses accounting concepts and procedures that are relevant to preparing reports for

(TCO 1) Which of the following costs does not change when the level of business activity changes?

(TCO 1) You own a car and are trying to decide whether or not to trade it in and buy a new car. Which of the following costs is an opportunity cost in this situation?

(TCO 1) Shula’s 347 Grill has budgeted the following costs for a month in which 1,600 steak dinners will be produced and sold: materials, $4,080; hourly labor (variable), $5,200; rent (fixed), $1,700; depreciation, $800; and other fixed costs, $600. Each steak dinner sells for $14.00 each. What is the budgeted fixed cost per unit?

(TCO 1) Which of the following costs is not part of manufacturing overhead?

(TCO 1) Product costs

(A) are also called manufacturing costs

(B) are considered an asset until the finished goods are sold.

(c) become an expense when the goods are sold.

(d) All of the above answers are correct.

(TCO 1) Red Runner’s Work in Process Inventory account has a beginning balance of $50,000 and an ending balance of $40,000. Direct materials used are $70,000 and direct labor used totals $35,000. Cost of goods sold totals $135,000. Manufacturing overhead applied is $20,000. How much is cost of goods manufactured?

(TCO 2) BCS Company applies manufacturing overhead based on direct labor cost. Information concerning manufacturing

(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?

(TCO 3) Which of the following describes the differences between job-order and process costing?

(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?

TCO 3) Ranger Glass Company manufactures glass for French doors. At the start of May, 2,000 units were in-process. During May, 11,000 units were completed and 3,000 units were in process at the end of May. These in-process units were 90% complete with respect to material and 50% complete with respect to conversion costs. Other information is as follows:

Work in process, May 1:
Direct material	$36,000
Conversion costs	$45,000
Costs incurred during May:
Direct material	$186,000
Conversion costs	$255,000

How much is the cost per equivalent unit for direct materials?

(TCO 4) Total costs were $75,800 when 30,000 units were produced and $95,800 when 40,000 units were produced. Use the high-low method to find the estimated total costs for a production level of 32,000 units.

ACCT 346 Midterm Exam  2 Solution  

 1.            Question :              (TCO 1) Which of the following is not a difference between financial accounting and managerial accounting?               

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

 3.            Question :              (TCO 1) You own a car and are trying to decide whether or not to trade it in and buy a new car. Which of the following costs is an opportunity cost in this situation?              

 4.            Question :              (TCO 1) Shula’s 347 Grill has budgeted the following costs for a month in which 1,600 steak dinners will be produced and sold: materials, $4,080; hourly labor (variable), $5,200; rent (fixed), $1,700; depreciation, $800; and other fixed costs, $600. Each steak dinner sells for $14.00 each. How much is the budgeted variable cost per unit?            

 5.            Question :              (TCO 1) Which of the following is an example of a manufacturing overhead cost?            

 6.            Question :              (TCO 1) Product costs       

 7.            Question :              (TCO 1) At December 31, 2010, WDT Inc. has a balance in the Work in Process Inventory account of $62,000. At January 1, 2010, the balance was $55,000. Current manufacturing costs for the year are $292,000, and cost of goods sold is $284,000. How much is cost of goods manufactured? 

 8.            Question :              (TCO 2) BCS Company applies manufacturing overhead based on direct labor hours. Information concerning manufacturing overhead and labor for August follows:

 9.            Question :              (TCO 2) Citrus Company incurred manufacturing overhead costs of $300,000. Total overhead applied to jobs was $306,000. What was the amount of overapplied or underapplied overhead?              

 10.         Question :              (TCO 3) Companies in which of the following industries would not be likely to use process costing?            

11.          Question :              (TCO 3) The Blending Department began the period with 20,000 units. During the period the department received another 80,000 units from the prior department and at the end of the period 30,000 units remained, which were 40% complete. How much are equivalent units in The Blending Department’s work in process inventory at the end of the period?   

12.          Question :              (TCO 3) Ranger Glass Company manufactures glass for French doors. At the start of May, 2,000 units were in-process. During May, 11,000 units were completed and 3,000 units were in process at the end of May. These in-process units were 90% complete with respect to material and 50% complete with respect to conversion costs. Other information is as follows:

 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?            

 1.            Question :              (TCO 4) Which of the following will have no effect on the break-even point in units?         

                 

 

 2.            Question :              (TCO 4) Circle K Furniture has a contribution margin ratio of 16%. If fixed costs are $176,800, how many dollars of revenue must the company generate in order to reach the break-even point?   

3.             Question :              (TCO 4) Randy Company produces a single product that is sold for $85 per unit. If variable costs per unit are $26 and fixed costs total $47,500, how many units must Randy sell in order to earn a profit of $100,000?   

 4.            Question :              (TCO 5) In full costing, when does fixed manufacturing overhead become an expense? 

 5.            Question :              (TCO 5) Variable costing income is a function of:       

 6.            Question :              (TCO 5) Peak Manufacturing produces snow blowers. The selling price per snow blower is $100. Costs involved in production are:

 7.            Question :              (TCO 6) Which of the following is not a reason that companies allocate costs?   

 8.            Question :              (TCO 6) Which of the following statements about cost pools is not

true?      

 9.            Question :              (TCO 6) The building maintenance department for Jones Manufacturing Company budgets annual costs of $4,200,000 based on the expected operating level for the coming year. The costs are allocated to two production departments. The following data relate to the potential allocation bases:

 10.         Question :              (TCO 7) A company is currently making a necessary component in house (the company is producing the component for its own use). The company has received an offer to buy the component from an outside supplier. A machine is being rented to make the component. If the company were to buy the component, the machine would no longer be rented. The rent on the machine, in relation to the decision to make or buy the component, is: 

 11.         Question :              (TCO 7) Ricket Company has 1,500 obsolete calculators that are carried in inventory at a cost of $13,200. If these calculators are upgraded at a cost of $9,500, they could be sold for $22,500. Alternatively, the calculators could be sold "as is" for $9,000. What is the net advantage or disadvantage of reworking the calculators?              

 12.         Question :              (TCO 7) YXZ Company’s market for the Model 55 has changed significantly, and YXZ has had to drop the price per unit from $275 to $135. There are some units in the work in process inventory that have costs of $160 per unit associated with them. YXZ could sell these units in their current state for $100 each. It will cost YXZ $10 per unit to complete these units so that they can be sold for $135 each.

 1.            Question :              (TCO 3) What are transferred-in costs? Which departments will never have transferred-in costs?  

 2.            Question :              (TCO 7) Computer Boutique sells computer equipment and home office furniture. Currently, the furniture product line takes up approximately 50% of the company's retail floor space. The president of Computer Boutique is trying to decide whether the company should continue offering furniture or just concentrate on computer equipment. If furniture is dropped, salaries and other direct fixed costs can be avoided. In addition, sales of computer equipment can increase by 13%. Allocated fixed costs are assigned based on relative sales.

 

 3.            Question :              (TCO 4) The following monthly data are available for RedEx, which produces only one product that it sells for $84 each. Its unit variable costs are $28 and its total fixed expenses are $64,960. Sales during April totaled 1,600 units.