Devry ACCT346 Final Exam ANSWERS

ACCT 346
Final Exam ANSWERS
Question :
(TCO 1) The principle managers follow when they only investigate
significant departures from the plan is commonly known as
Points Received:
4 of 4
2.
Question :
(TCO 1) Which of the following is not likely to be
a fixed cost?
Points Received:
4 of 4
3.
Question :
(TCO 2) Which of the following is not a manufacturing cost?
Points Received:
4 of 4
4.
Question :
(TCO 2) An allocation base is
Points Received:
4 of 4
5.
Question :
(TCO 3) Equivalent units are calculated by
Points Received:
4 of 4
6.
Question :
(TCO 3) In the assembly department, all the direct materials are
added at the beginning of the processing. Beginning Work in Process inventory
consists of 2,000 units with a direct materials cost of $31,860. During the
period, 15,000 units are started and direct materials costing $250,000 are
charged to the department. If there are 1,000 units in ending inventory, what
is the cost per equivalent unit?
Points Received:
4 of 4
7.
Question :
(TCO 4) Regression analysis
Points Received:
4 of 4
8.
Question :
(TCO 4) The number of units that must be sold to exactly cover its
fixed and variable costs is the
Points Received:
4 of 4
9.
Question :
(TCO 5) Which of the following is treated as a product cost in
variable costing?
Points Received:
4 of 4
10.
Question :
(TCO 5) If the number of units sold is less than the number of
units produced
Points Received:
4 of 4
11.
Question :
(TCO 6) A contract which specifies that the suppler will be paid
for the cost of production as well as some fixed amount or percentage of cost
is called a(n)
Points Received:
4 of 4
12.
Question :
(TCO 6) Which of the following is not generally true when a
company compares ABC and traditional costing?
Points Received:
4 of 4
13.
Question :
(TCO 7) Fixed costs that will be eliminated if a particular course
of action is undertaken are called
Points Received:
4 of 4
Page:
1.
Question :
(TCO 7) Common costs
Points Received:
4 of 4
2.
Question :
(TCO 8) Target costing
Points Received:
4 of 4
3.
Question :
(TCO 8) Which of the following are relevant in deciding whether to
accept or reject a special order?
Points Received:
4 of 4
4.
Question :
(TCO 9) Present value techniques
Points Received:
4 of 4
5.
Question :
(TCO 9) The internal rate of return
Points Received:
4 of 4
6.
Question :
(TCO 10) A method of budget preparation that requires all budgeted
amounts to be justified by the department, even if the amounts were supported in
prior periods, is called
Points Received:
4 of 4
7.
Question :
(TCO 10) Which budget is prepared first?
Points Received:
4 of 4
8.
Question :
(TCO 10) The standard cost is
Points Received:
4 of 4
9.
Question :
(TCO 10) In general, an unfavorable material variance arises from
Points Received:
4 of 4
10.
Question :
(TCO 10) The type of center that has responsibility for generating
revenue as well as controlling costs is a(n)
Points Received:
4 of 4
11.
Question :
(TCO 10) Responsibility accounting holds managers responsible for
Points Received:
4 of 4
12.
Question :
(TCO 10) Which ratio measures the rate earned on total capital
provided by the owners?
Points Received:
4 of 4
Page:
1.
Question :
(TCO 1) Distinguish managerial accounting from financial
accounting. Include a brief discussion of the differences in the types of
information provided to users as well as the differences of the users of the
accounting information.
Points Received:
20 of 20
2.
Question :
(TCO 6) Booth Financial Services, LLC has two revenue producing
departments, Financial Planning and Business Consulting. The accounting
department is trying to determine the best method to allocate $1,000,000 of
common costs (secretarial staff, reception personnel, etc), either by salary or
number of employees. Information on the revenue departments are as follows:
Department
Employees
Salaries
Financial Planning
150 employees
$10,000,000
Business Consulting
50 employees
$5,000,000
(a) Allocate the $1,000,000 common costs to the two revenue
departments using both methods.
(b) Why are allocations called arbitrary?
Points Received:
25 of 25
3.
Question :
(TCO 10) Charlie Corp sells it products on both credit and cash
basis. Monthly sales are sold 20% for cash, 80% for credit. Credit sales are
collected 40% in the month of sale and 60% the following month. Sales for the
first quarter are as follows:
January $100,000
February $150,000
March $125,000
Compute cash collections for February.
Points Received:
25 of 25
4.
Question :
(TCO 2) Acme Fireworks uses a traditional overhead allocation
based on direct labor hours. For the current year overhead is estimated at
$1,000,000 and direct labor hours are budgeted at 200,000 hours. Actual hours
worked were 195,000 and actual overhead was $978,000.
(a) Compute the predetermined manufacturing overhead rate.
(b) Compute the applied manufacturing overhead.
(c) Compute the amount of over/under applied manufacturing overhead.
Points Received:
25 of 25
Page:
1 2 3 4
1.
Question :
(TCO 9) An investment of $185,575 is expected to generate returns
of $65,000 per year for each of the next four years. What is the investment’s
internal rate of return?
Points Received:
25 of 25
2.
Question :
(TCO 4) Legal Docs Inc is a legal services firm that files
incorporation papers for small businesses. They charge $1,000 per application.
This year’s income statement shows the following:
Sales $1,295,000
Variable Expenses $1,023,000
Contribution margin $272,000
Fixed costs $250,000
Profit $22,000
Required:
(a) Compute the break-even point in units.
(b) Compute the contribution margin ratio.
(c) Compute the current margin of safety.
(d) How many applications must the company sell to make a profit of $350,000?
Points Received:
25 of 25
3.
Question :
(TCO 5) The following data has been taken from Air-Tite company in
its first year of business.
Units produced 100,000
Units sold 80,000
Units in ending inventory 20,000
Fixed manufacturing overhead $400,000
(a) Compute the amount of fixed manufacturing overhead that would
be expensed in the current year if full absorption costing is used.
(b) Compute the amount of fixed manufacturing overhead that would be expensed
in the current year if variable costing is used.
(c) Compute the amount of fixed manufacturing overhead that would be included
in ending inventory under full absorption costing.
Points Received:
25 of 25