Devry ACCT505 Midterm Exam ANSWERS

ACCT 505
Midterm Exam ANSWERS
Question :
(TCO A) Wages paid to an assembly line worker in a factory are a
Points Received:
6 of 6
2.
Question :
(TCO A) A cost incurred in the past that is not relevant to any
current decision is classified as a(n)
Points Received:
6 of 6
3.
Question :
(TCO A) Depreciation of office buildings and office equipment is
also known as
Points Received:
6 of 6
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?
Points Received:
6 of 6
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.
Points Received:
6 of 6
6.
Question :
(TCO F) A job-order cost system is employed in those situations
where
Points Received:
6 of 6
7.
Question :
(TCO F) The FIFO method only provides a major advantage over the
weighted-average method in that
Points Received:
6 of 6
8.
Question :
(TCO B) The contribution margin ratio always decreases when the
Points Received:
6 of 6
9.
Question :
(TCO B) Which of the following would not affect the break-even
point?
Points Received:
6 of 6
10.
Question :
(TCO E) In an income statement prepared using the variable costing
method, variable selling and administrative expenses would
Points Received:
6 of 6
Page:
12
Page:
12
1.
Question :
(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………………………………………………………………………
$910
Purchases of raw materials…………………………………………
$225
Direct labor……………………………………………………………..
$245
Manufacturing overhead…………………………………………….
$265
Administrative expenses…………………………………………….
$150
Selling expenses……………………………………………………….
$140
Raw materials inventory, beginning……………………………….
$15
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
Required:Prepare a Schedule of Cost of Goods Manufactured in the text box
below.
Points Received:
15 of 15
outstanding
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.
Percentage 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.
Points Received:
20 of 20
outstanding
3.
Question :
(TCO B) A tile manufacturer has supplied the following data:
Boxes of tile produced and sold 625,000
Sales revenue $2,975,000
Variable manufacturing expense $1,720,000
Fixed manufacturing expense $790,000
Variable selling and admin expense $152,000
Fixed selling and admin expense $133,000
Net operating income $180,000
Required:
a. Calculate the company’s unit contribution margin.
b. Calculate the company’s unit contribution ratio.
c. If the company increases its unit sales volume by 5% without
increasing its fixed expenses, what would the company’s net operating income
be?
Points Received:
25 of 25
awesome
4.
Question :
(TCO E) Lehne Company, which has only one product, has provided
the following data concerning its most recent month of operations:
Selling price
$ 125
Units in beginning inventory
600
Units oroduced
3000
Units sold
3500
Units in ending inventory
100
Variable costs per unit:
Direct materials
$ 15
Direct labor
$ 50
Variable manufacturing overhead
$ 8
Variable selling and admin
$ 12
Fixed costs:
Fixed manufacturing overhead
$ 75,000
Fixed selling and admin
$ 20,000
The company produces the same number of units every month,
although the sales in units vary from month to month. The company’s variable
costs per unit and total fixed costs have been constant from month to month.
Required:
a. What is the unit product cost for the month under variable costing?
b. What is the unit product cost for the month under absorption costing?
c. Prepare an income statement for the month using the variable costing method.
d. Prepare an income statement for the month using the absorption costing
method.
Points Received:
30 of 30
awesome