Devry ACCT505 week 4 midterm set 3

1. Question
: (TCO A) Wages paid to an
assembly line worker in a factory are a:

Student
Answer: Prime Cost YES…..Conversion Cost NO

Prime Cost YES…..Conversion Cost YES

Prime Cost NO….Conversion Cost NO

Prime Cost NO…..Conversion Cost YES

Instructor
Explanation: Chapter 2

Points
Received: 6 of 6
Comments:

2. Question
: (TCO A) A cost incurred in the
past that is not relevant to any current decision is classified as a(n):

Student
Answer: period cost.

incremental cost.

opportunity cost.

none of the above.

Instructor
Explanation: Chapter 2

Points
Received: 6 of 6
Comments:

3. Question
: (TCO A) Property taxes on a
company’s factory building would be classified as a(n):

Student
Answer: sunk cost

opportunity cost

period cost

variable cost

manufacturing cost

Instructor
Explanation: Chapter 2

Points
Received: 0 of 6
Comments:

4. Question
: (TCO A) When the activity
level is expected to increase within the relevant range, what effects would be
anticipated with respect to each of the following?
Fixed Cost Per Unit Variable Cost Per Unit

Student
Answer: Increase No Change

Increase Increase

decrease No Change

No Change Increase

Instructor
Explanation: Chapter 5

Points
Received: 0 of 6
Comments:

5. Question
: (TCO F) Which of the following
statements is true?
I. Overhead application may be made slowly as a job is
worked on.
II. Overhead application may be made in a single application
at the time of completion of the job.
III. Overhead application should be made to any job not
completed at year-end in order to properly value the work in process inventory.

Student
Answer: Only statement I is true

Only statement II is true

Both statements I and II are true

Statements I, II, and III are all true

Instructor
Explanation: Chapter 3

Points
Received: 6 of 6
Comments:

6. Question
: (TCO F) Which of the following
statements about process costing system isincorrect?

Student
Answer: In a process costing system, each processing
department has a work in process account
In a process costing system, equivalent units
are separately computed for materials and for conversion costs
In a process costing system, overhead can be
under- or overapplied just as in job-order costing
In a process costing system, materials costs
are traced to units of products

Instructor
Explanation: Chapter 4

Points
Received: 6 of 6
Comments:

7. Question
: (TCO F) Equivalent units for a
process costing system using the FIFO method would be equal to:

Student
Answer: units completed during the period, plus
equivalent units in the ending work in process inventory
units started and completed during the
period, plus equivalent units in the ending work in process inventory
units completed during the period and
transferred out

units started and completed during the
period, plus equivalent units in the ending work in process inventory, plus
work needed to complete units in the beginning work in process inventory
Instructor
Explanation: Chapter 4

Points
Received: 6 of 6
Comments:

8. Question
: (TCO B) The contribution
margin ratio always increases when the:

Student
Answer: break-even point increases

break-even point decreases

variable expenses as a percentage of net
sales decreases

variable expenses as a percentage of net
sales increases

Instructor
Explanation: Chapter 6

Points
Received: 6 of 6
Comments:

9. Question
: (TCO B) Which of the following
would not affect the break-even point?

Student
Answer: number of units sold

variable expense per unit

total fixed expenses

selling price per unit

Instructor
Explanation: Chapter 6

Points
Received: 0 of 6
Comments:

10. Question : (TCO E) In an income statement
prepared using the variable costing method, variable selling and administrative
expenses would:

Student
Answer: be used in the computation of the
contribution margin

be used in the computation of net operating
income but not in the computation of the contribution margin
be treated differently from variable
manufacturing expenses

not be used

Instructor
Explanation: Chapter 7

Points
Received: 6 of 6
Comments:

Page: 1 2

Page: 1 2

1. Question
: (TCO A) The following data (in
thousands of dollars) have been taken from the accounting records of Larden
Corporation for the just completed year.
Sales $950
Purchases
of raw materials $170
Direct
labor $210
Manufacturing
overhead $220
Administrative
expenses $180
Selling
expenses $140
Raw
materials inventory, beginning $70
Raw
materials inventory, ending $80
Work in
process inventory, beginning $30
Work in
process inventory, ending $20
Finished
goods inventory, beginning $100
Finished
goods inventory, ending $70

Required: Prepare a Schedule of Cost of Goods Manufactured
statement in the text box below.

2. Question
: (TCO F) The Illinois Company
manufactures a product that goes through three processing departments.
Information relating to activity in the first department during June is given
below:
Percent completed
Units Materials Conversion
Work in process, June 1 150,000 75% 55%
Work in process, Jun 30 145,000 85% 75%
The department started 475,000 units into production during
the month and transferred 480,000 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.

3. Question
: (TCO B) Drake Company’s income
statement for the most recent year appears below:
Sales (45,000 units) $1,350,000
Less: Variable expenses 750,000
Contribution margin 600,000
Less: Fixed expenses 375,000
Net operating income $225,000
Required:
a. calculate the unit contribution margin
b. calculate the break-even point in dollars

4. Question
: (TCO E) The Dean Company
produces and sells a single product. The following data refer to the year just
completed:
Selling Price $450

Units in beginning Inventory 0
Units Produced 25000
Units sold 22000

Variable Costs per unit:
Direct materials $
200
Direct labor $
50
Variable manufacturing overhead $ 30
Variable selling and admin $
15

Fixed Costs:
Fixed manufacturing overhead $
275,000
Fixed selling and admin $
230,000

Assume that direct labor is a variable cost.
Required:
a. Compute the cost of a single unit of product under both
the absorption costing and variable costing approaches.

Points
Received: 30 of 30
Comments: