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UT / Accounting / ACC 312 / the following materials standards have been established for a particul

the following materials standards have been established for a particul

the following materials standards have been established for a particul

Description

School: University of Texas at Austin
Department: Accounting
Course: Fundamentals of Managerial Accounting
Professor: Brian lendecky
Term: Fall 2016
Tags:
Cost: 50
Name: THE ACC 312 - Fundamentals of Managerial Accounting - Study Guide - The following direct-material standards have been established for Product Q
Description: Test Form A Name ______________________________________________________________________ UTEID ____________________________________ Instructor __________________________________________Class Days ___________________ Time ______________________ DO NOT OPEN until given instructions to do so
Uploaded: 04/06/2017
15 Pages 589 Views 1 Unlocks
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Test Form A Name ______________________________________________________________________ UTEID ____________________________________ Instructor ____________________________________________ Class Days ___________________ Time ______________________ DO NOT OPEN until given instructions to do so. Instructions Pages are numbered sequentially, including this page. Confirm that you have 15 pages. 1. Answers to Multiple-Choice Questions should be recorded on your Scantron. A. On your Scantron answer sheet, write and bubble in your name, UTEID, and the “Test Form” letter noted above. B. Use a #2 pencil only to mark your responses on your Scantron answer sheet. Mark clearly and  erase completely as needed. Only the multiple-choice answers marked on your Scantron answer  sheet will be graded. C. The time allotted for the exam includes the time required to “bubble-in” your Scantron answer sheets.  It is cheating to take extra time to bubble in the answer sheet after time is up for the exam and we will  respond accordingly. 2. Answers to Problems should be recorded on the exam itself, in the space provided. Show your work  legibly in the space provided.  3. Cell phones, books, notes, computing devices and programmable calculators are NOT allowed at  your desk during the exam. Calculators capable of storing text are NOT allowed. 4. In the interest of minimizing disruptions and making sure all students have exactly the same information  on the exam, only the following kinds of questions may be asked during the exam: a. Vocabulary questions relating to non-course-specific words; b. Questions about a possible mistake in the exam. In the latter case, you should then continue working on other questions. If a mistake is confirmed, we will  answer by making an announcement to the whole class. If no announcement is made in a short period of  time, you may assume that the problem is correct as written. 5. When you are finished, insert any scratch paper into the exam and bring your entire exam, scratch paper,  Scantron answer sheet, and student ID to the front of the room. 6. You are reminded of the University’s honor policy which requires you do your own work and not give or  receive assistance on this exam. 1 SECTION I – MULTIPLE-CHOICE QUESTIONS (22 questions, 3 points each) - Please choose the ONE  BEST answer for each question and record your answer on your Scantron answer sheet. 1. The following direct-material standards have been established for Product Q: Standard quantity per unit of output 1.7 meters Standard price $19.80 per meter The following data pertain to operations concerning Product Q for the last month: Actual materials purchased 5,800 meters Actual cost of materials purchased $113,680  Actual materials used in production 5,100 meters Actual output 3,200 units What is the direct-material quantity variance for the month? A. $ 13,720 U B. $ 6,732 F C. $ 13,720 F D. $ 6,664 F E. $ 7,128 U 2. Which of the following mathematical expressions is used in preparing a typical flexible-budget for  overhead? A. Total activity units + budgeted fixed overhead cost per activity unit. B. Budgeted variable overhead cost per activity unit + budgeted fixed overhead cost. C. (Budgeted variable overhead cost per activity unit × total activity units) + budgeted fixed overhead  costs. D. (Budgeted fixed overhead cost per activity unit × total activity units) + (budgeted variable overhead  cost per activity unit × total activity units). E. None of these. 3. Bozeman Manufacturing sells a number of goods whose selling price is heavily influenced by cost. A  recent study of product X1966 revealed a traditionally-derived total cost of $1,019 per unit, a newly  computed and more accurate activity-based total cost of $1,215 per unit, and a selling price of $1,850 per  unit. Which of the following statements is true? A. All other things being equal, the company should consider a drop in its sales price.  B. The company may have been extremely competitive in the marketplace from a sales price  perspective.  C. Product no. X1966 could be labeled as being overcosted by the firm's traditional costing procedures.  D. If product no. X1966 is undercosted by traditional accounting procedures, then all of the company's  other products must be undercosted as well.  E. If product no. X1966 is overcosted by traditional accounting procedures, then all of the company's  other products must be overcosted as well. 2 4. Spokane Company manufactures 20 different products used for outdoor recreation. In its traditional costing  system, overhead costs are allocated based on a predetermined rate using only direct-labor hours. The  company recently switched to an activity-based costing system using two activity cost pools, each with a  different cost driver. Cost driver data used in the ABC system are as follows: Budgeted Activity Predetermined Overhead Rate Direct-labor hours 100,000 $12 per labor hour Number of designs 6,000 $32 per design Job #716 required 22 direct-labor hours and 3 designs. By how much would this job have been over- or  undercosted under the traditional costing system versus the new and improved system? A. Undercosted by $96.00 B. Undercosted by $71.09 C. Overcosted by $96.00 D. Undercosted by $53.76 E. None of the above 5. Martini Company, which applies overhead to production on the basis of machine hours, reported the  following data for the period just ended: Actual units produced 9,000 Actual variable overhead incurred $54,400  Actual machine hours worked 16,000 Standard variable overhead cost per machine hour $3.50 If Martini estimates two hours to manufacture a completed unit, the company's variable-overhead efficiency  variance is: A. $1,600 favorable. B. $1,600 unfavorable. C. $7,000 favorable. D. $7,000 unfavorable. E. Some other amount not listed above. 6. Underapplied overhead indicates: A. An amount applied to jobs is smaller than the amount actually spent on overhead. B. An amount applied to jobs is larger than the amount actually spent on overhead. C. The ending balance in raw materials will likely decrease if the company prorates the under applied overhead. D. The ending balance in raw materials will likely increase if the company prorates the under applied overhead. E. Two of the above are correct.3 7. Krizum Industries makes heavy construction equipment. The standard for a particular crane calls for 24  direct-labor hours at $16 per direct-labor hour. During a recent period 850 cranes were made. The labor rate  variance was zero and the labor efficiency variance was $8,800 unfavorable. How many actual direct-labor hours were worked? A. 19,850 B. 20,400 C. 20,950 D. 35,200 E. Not enough information provided 8. Which of the following factors is not considered when determining if a variance is significant and therefore  needs to be investigated: A. The absolute size of the variance. B. The relative size of the variance. C. Whether the variance occurs repeatedly. D. Whether the variance is favorable or unfavorable. E. The organization’s ability to control the variance. 9. HRM Company, which applies overhead to production on the basis of machine hours, reported the  following data for the period: Actual units produced 13,000 Actual fixed overhead incurred $742,000  Standard fixed overhead rate $15 per hour Budgeted fixed overhead $720,000 Planned level of machine-hour activity 48,000 Actual level of machine-hour activity 50,000 If HRM estimates four hours to manufacture a completed unit, the company's fixed-overhead budget  variance would be: A. $22,000 favorable B. $22,000 unfavorable C. $60,000 favorable D. $60,000 unfavorable E. $8,000 favorable4 10. At the end of the year you have been asked to analyze the Work-in-Process account. You find that there is a  balance in the Work-In-Process account of $45,456. There are two jobs still in process at the end of the  year: ∙ Job #691 has incurred costs of $5,233 for direct materials and $15,033 for direct labor.  ∙ Job #695 has incurred costs of $6,211 for direct materials and $3,212 for direct labor.  If the company had applied overhead based on a percentage of direct labor dollars, the company must  be using a predetermined rate closest to: A. 62.72% B. 86.42% C. 12.5% D. 115.72% E. 11.57% 11. Which of the following is not one of the defining elements that are common to all cost allocations? A. Contribution margin B. Cost pools C. Cost drivers D. Denominator volume E. All of the above are defining elements that are common to all cost allocations 12. Which manager is in the BEST position to influence the following variances:  Direct Material Price Variance Direct Labor Quantity Variance A. Factory Supervisor Human Resources B. Factory Supervisor Factory Supervisor C. Purchasing Purchasing D. Factory Supervisor Purchasing E. Purchasing Factory Supervisor 13. The master budget contains the following components, among others: (1) direct-material budget, (2)  budgeted balance sheet, (3) production budget, and (4) manufacturing overhead budget. Of these four  budgets, which would be prepared first and which would be prepared last? First Last A. 1 4 B. 1 2 C. 3 4 D. 3 2 E. 4 15 14. Big Bill’s Business (BBB) is implementing an activity-based costing (ABC) system. When BBB compares  their income under ABC with what it would have been if they had not adopted ABC, what will they find? A. The ABC system will report higher profit than the prior system. B. The ABC system will report lower profit than the other system. C. Profit will be the same in both systems. D. The profit difference will depend on the design of the prior system relative to the ABC design. E. The ABC system will report higher pre-tax profit than the prior system, but taxes will also be higher  and the net change in profit cannot be predicted. 15. The Hanson Corporation employs a standard costing system. The following data are available for February: Actual direct-labor hours worked 6,500 hours Standard direct-labor rate $8 per hour Direct-labor rate variance $2,600 favorable The actual direct-labor rate for February is: A. $7.60 per hour B. $8.40 per hour C. $8.00 per hour D. $2.50 per hour E. None of the above 16. Master Products provides the following information for the year just ended: Budget Actual Sales in units 15,000 14,000 Sales $150,000 $147,000 Less: Variable expenses (90,000) (82,600) Contribution margin $60,000 $64,400 Less: Fixed expenses (35,000) (40,000) Operating income $25,000 $24,400 The company’s Sales Price Variance is: A. $3,000 unfavorable B. $7,000 unfavorable C. $7,000 favorable D. $7,500 unfavorable E. $7,500 favorable6 17. In a company that uses direct-labor hours as its cost driver for overhead, which of the following elements is  (are) used to calculate the Variable-Overhead Spending Variance? A. Actual variable overhead incurred during the period B. Variable overhead that is projected based on actual direct-labor hours worked C. Variable overhead that is allowed based on actual output produced A. C only B. Both A and B C. Both A and C D. Both B and C E. A, B, and C 18. A phone manufacturer uses a normal costing system and applies overhead based on machine hours. The  company incurred the following for the year: Cost of goods manufactured $756,552 Actual manufacturing overhead $739,255 Predetermined overhead rate $55.43 Actual machine hours 13,678 Budgeted direct labor hours 13,345 Actual number of units 22,234 The company closes its over- or underapplied overhead to cost of goods sold at the end of the year.  Finished goods inventory was $164,123 on January 1 and $158,557 on December 31. There is no WIP  inventory at the beginning or the end of the year. What is the reported cost of goods sold for the year, after  the year-end adjustment? A. $758,172 B. $715,400 C. $739,255 D. $752,500  E. $743,201 19. The CFO of Twin Falls Enterprises is setting up a new activity-based costing system. He has currently  finished identifying the cost pools and has determined which cost pools should be allocated. What is his next step in the process? A. Add the cost pools together. B. Identify the cost driver for allocating each cost pool  C. Divide each cost pool by the number of units produced.  D. Determine the appropriate denominator volume of each cost driver to calculate allocation rates. E. Determine the predetermined overhead rate.7 20. Big Sky Computers uses a standard costing system and charges manufacturing overhead to products on the  basis of machine hours by using a predetermined overhead rate. The following data pertain to the current  year: Budgeted manufacturing overhead $585,650 Actual manufacturing overhead $543,123 Standard machine hours per unit 0.5 Actual machine hours 19,050 Budgeted units to produce 42,500 Actual units produced 40,000 Before any end-of-year adjustments, manufacturing overhead applied to production totaled: A. $486,816 B. $653,284 C. $525,018 D. $585,650 E. $551,200 21. G Products Inc., manufactures garlic gravy. G's production budget indicated the following units (jars) of  gravy to be produced for the upcoming months indicated: April May June Units to be produced 82,000 80,000 75,000 Five grams of garlic are needed for every jar of gravy. G also likes to have enough garlic on hand at the end  of the month to cover 10% of the next month's production requirements for garlic. How many grams of  garlic should G plan on purchasing during the month of May? A. 397,500 grams B. 399,500 grams C. 407,500 grams D. 437,500 grams E. 400,000 grams 22. Khaki Corporation has the following budgeted sales data: January February March April Cash Sales $70,000 $90,000 $80,000 $70,000 Credit Sales $400,000 $350,000 $300,000 $320,000


What is the direct-material quantity variance for the month?



Don't forget about the age old question of What are the important concepts in managerial accounting?

The regular pattern of collection of credit sales is 40% in the month of sale, 50% in the month following  sale, and the remainder in the second month following the month of sale. There are no bad debts. The budgeted accounts receivable balance on February 28 would be:  A. $250,000 B. $210,000 C. $175,000 D. $215,000 E. $300,000 8 SECTION II – CASE SHORT ANSWER (2 questions, 2 points each) - Please write your answer in the space  provided. Be brief. 1. Describe Danshui’s business model (i.e., describe what they do and why someone would pay them to do  it). 2. Why is the New York Times article about Foxconn relevant to Danshui’s challenges as described in the case? 9 SECTION III - PROBLEMS (30 points total) You MUST show your work to receive any partial credit.  Please try to be as neat and organized as possible. Unless stated otherwise, round to two decimal places. PROBLEM 1 (10 points) Diamond Company makes one product and has set the following standards for materials and labor: Direct  Materials Direct  Labor Standard quantity or hours per unit …....... ? 2.10 hours Standard price or rate ....................................... ? $8.50 per hour Standard cost per unit ....................................... ? $17.85 During the past month, the company purchased 6,200 pounds of direct materials at a cost of $17,050. All  of this material was used in the production of 1,300 units of product. Direct labor cost totaled $20,070 for  the month. The following variances have been computed: Direct material quantity variance ...................... $1,200 U Total direct material variance ………….............. $350 F Direct labor efficiency variance........................... $4,250 F Complete the following table. Show your work in the space provided below on the next page,  (round intermediate calculations to four decimals and final answers to two decimals): Standard price per pound for direct material

Standard quantity allowed for direct material for the month’s  production

Standard quantity of direct material allowed per unit of product

Actual direct labor cost per hour

Direct labor rate variance


How many actual direct-labor hours were worked?




By how much would this job have been over- or undercosted under the traditional costing system versus the new and improved system?



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10 Additional work space for Problem 1:11 PROBLEM 2 (11 points) Colorado Pizza Corporation (CPC) makes two types of frozen pizzas—VeganLovers and MeatLovers and ships them to grocery stores in shipments of various sizes from 10 to 50 pizzas per shipment.  Production information is as follows.  VeganLovers MeatLovers Budgeted unit volume (1 unit = 1 pizza) 150,000 60,000 Direct material cost per unit $0.70 $0.55 Direct labor cost per unit $0.15 $0.20 Machine Hours per unit 1 hour, 30 minutes 1 hour, 0 minutes The company controller, who is studying the use of activity-based costing, has determined that the  firm's overhead can be identified with three activity cost pools, and that the firm's total overhead of  $195,000 can be subdivided into these cost pools as follows: Production line setups $45,000 Cost driver: Number of setups Machine processing $142,500 Cost driver: Machine hours Product shipping $7,500 Cost driver: Number of outgoing shipments Data on the number of setups and outgoing shipments follow: VeganLovers MeatLovers Total Setups per product line 50 25 Total Outgoing shipments per product line 150 100 a. For each of the following cost pools and its corresponding cost driver, indicate the level of  the hierarchy of costs that applies: (2 points) Level of Cost Pool Cost Driver Cost Hierarchy Production line setups Number of Setups __________________________________________________ Machine processing Machine Hours __________________________________________________ b.. In a traditional costing system with manufacturing overhead cost assigned to products based on  direct-labor cost, compute CPC’s predetermined overhead rate. (2 points - – Round all calculations to  2 decimals)12 c. CPC receives an order from Lucy’s Corner Shoppe for 10 VeganLovers and 20 MeatLovers  pizzas. Use your answer from the previous question in computing the total cost of the  Lucy’s order? (3 points – Round all calculations to 2 decimals) d. If CPC instead decides to use activity-based costing, compute the per-unit total  manufacturing cost of a VeganLovers pizza, (4 points – Round all calcs to 2 decimals)13 PROBLEM 3 (9 points) The Midcentury Mod Furniture Co. (MMF) produces only one product, an excellent replica of the famous  Hans Wegner wishbone chair. Budgeted unit sales for the first five months of the year are as follows: Budgeted Sales (Units) January ............................................................ 200 February ......................................................... 240 March ................................................................ 180 April .................................................................. 160 Each wishbone chair requires the following direct-material components: Std Qty Description Std Price 1.05 pieces Back Support made from ash wood $10 per piece 1 set Other ash wood parts (12 parts) $80 per set 0.5 kilogram Hemp rope (for seat) $8 per kilogramWood pieces and sets can only be ordered in whole units (increments of 1, no partial units). One in 20  Back Support pieces is considered unusable (cracks, knots, other defects) and discarded, and this loss is  built into the standard quantity given above. All other materials except those listed above, such as glue,  fasteners, and stain, are treated as indirect materials and included in manufacturing overhead. The company’s policy is to plan to end each month with an inventory of completed chairs equal to 25% of  the following month's budgeted sales. However, at the beginning of the year, only 40 chairs are on hand because of an unexpectedly successful end-of-year sale. a. Prepare a production budget, in units, showing each of the first three months of the year. Your  production budget should have a column for each of the three months, and the rows should be clearly  labeled. (3 points) 14 b. MMF always plans to end each month with an inventory of every type of direct material that is at least equal to 10% of the next month's needs for that material.  At the beginning of the year, MMF has on hand 20 good Back Supports, 30 sets of other ash wood  parts, and (because of a special purchase deal) 1,000 kilograms of hemp rope. Prepare a direct-material budget, in dollars, for Back Supports only, showing each of the first two months of the year. Your budget should have a column for both months. Label all the rows clearly.  (4 points) c. MMF’s standard payment practice is that purchases made during the first 25% of any month will be paid  later that same month, and purchases made after the first 25% of the month will be paid in the first week of  the following month. MMF’s materials purchases are budgeted to total $18,000 in April, $20,000 in May,  and $24,000 in June. Assuming that all of MMF’s purchases are made evenly throughout each month, how  much cash will MMF budget for paying its suppliers in May? (2 points)15
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