ACC349 final help All 42 questions answered
ACC349 final help All 42 questions answered fin571
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Date Created: 11/11/15
1 What is the best way to handle manufacturing overhead costs in order to get the most timely job cost information The company should add actual manufacturing overhead costs to jobs as soon as the overhead costs are incurred The company should determine an allocation rate as soon as the actual costs are known and then apply manufacturing overhead to jobs The company should account for only the direct production costs The company should aDDIV overhead using an estimated rate throuohout the ear 2 At the end of the year manufacturing overhead has been overapplied What occurred to create this situation The company incurred more manufacturing overhead costs than the manufacturing overhead assigned to jobs The actual manufacturing overhead costs were less than the manufacturing overhead assidned to iobs The company incurred more total job costs than the amount budgeted for the job Estimated manufacturing overhead was less than actual manufacturing overhead costs 3 Luca Company overapplied manufacturing overhead during 2006 Which one of the following is part of the year end entry to dispose of the overapplied amount assuming the amount is material A decrease to work in process inventory A decrease to abblied overhead An increase to finished goods An increase to cost of goods sold 4 Which of the following would be accounted for using a job order cost system The production of textbooks The production of town homes The pasteurization of milk The production of cans of spinach 5 Which one of the following is NEVER part of recording the issuance of raw materials in a job order cost system Debit Manufacturing Overhead Debit Finished Goods Inventory Debit Work in Process Inventory Credit Raw Materials Inventory 6 What is unique about the flow of costs in a job order cost system It involves accumulating material labor and manufacturing overhead costs as they are incurred in order to determine the job cost Each iob is costed separatelv in a Work in Process subsidiary ledger Job costs cannot be measured until all overhead costs are determined There are no costs remaining in Work in Process at year end 7 Which one of the following costs would be included in manufacturing overhead of a lawn mower manufacturer The cost of the fuel lines that run from the motor to the gas tank The cost of the wheels Depreciation on the testing equipment The wages earned by motor assemblers Directing manufacturing and controlling Planning directing and selling Planning manufacturing and controlling 9 Which of the following represents the correct order in which inventories are reported on a manufacturer s balance sheet Work in process finished goods raw materials aw materials work in process finished goods Finished goods work in process raw materials Work in process raw materials finished goods Copyright 2010 University of Phoenix ONLPPASWEBO4 10 In traditional costing systems overhead is generally applied based on machine hours M direct material dollars units of production 11 An activity that has a direct causeeffect relationship with the resources consumed is an overhead rate product activity Lolriver cost pool identifying the activitycost pools assigning manufacturing overhead costs for each activity cost pool to products 13 Which of the following factors would suggest a switch to activitybased costing Overhead costs constitute a significant portion of total costs 14 All of the following statements are correct EXCEPT that the obiective of installing ABC in service firmsis different than it is in a manufacturing firm the general approach to identifying activities and activity cost pools is the same in a service company as in a manufacturing company activitybased costing has been widely adopted in service industries a larger proportion of overhead costs are companywide costs in service industries 15 What sometimes makes implementation of activitybased costing difficult in service industries is identifying activities activity cost plus and cost drivers the labeling of activities as valueadded that a larger prooortion of overhead costs are companvwide costs 16 One of Astro Company39s activity cost pools is machine setups with estimated overhead of 150000 Astro produces sparklers 400 setups and lighters 600 setups How much of the machine setup cost pool should be assigned to sparklers 17 Poodle Company manufactures two products Mini A and Maxi B Poodle39s overhead costs consist of setting up machines 800000 machining 1800000 and inspecting 600000 Information on the two products is Mini A Maxi B Direct labor hours 15000 25000 Machine setups 600 400 Machine hours 24 000 26 000 Inspections 800 700 Overhead applied to Mini A using activitybased costing is 1 5360 00 1 6640 1 9200 00 1 2000 00 18 Poodle Company manufactures two products Mini A and Maxi B Poodle39s overhead costs consist of setting up machines 800000 machining 1800000 and inspecting 600000 Information on the two products is Mini A Maxi B Direct labor hours 15000 25000 Machine setups 600 400 Machine hours 24 000 26 000 Inspections 800 700 Overhead applied to Maxi B using activitybased costing is 1 5360 00 1 6640 00 20000 1 2800 00 Copyright 2010 University of Phoenix ONLPPASWEB04 19 Seran Company has contacted Truckel Inc with an offer to sell it 5000 of the wickets for 18 each If Truckel makes the wickets variable costs are 11 per unit Fixed costs are 12 per unit however 5 per unit is avoidable Should Truckel make or buy the wickets Buy savings 10000 Make savings 20000 Make savinds 10000 Buy savings 25000 20 Rosen Inc has 10000 obsolete calculators which are carried in inventory at a cost of 20000 It the calculators are scrapped they can be sold for 110 each for parts If they are repackaged at a cost of 15000 they could be sold to toy stores for 250 per unit What alternative should be chosen and why Repackage revenue is 5000 greater than cost Scrap incremental loss is 9000 Repackage receive profit of 10000 Scrap profit ig1000 dreater 21 The cost to produce Part A was 10 per unit in 2005 During 2006 it has increased to 11 per unit In 2006 Supplier Company has offered to supply Part A for 9 per unit For the makeorbuy decision incremental costs are 1 per unit net relevant costs are 1 per unit differential costs are 2 per unit incremental revenues are 2 per incremental costs are 1 per unit unit 22 Hartley Inc has one product with a selling price per unit of 200 the unit variable cost is 75 and the total monthly fixed costs are 300000 How much is Hartley s contribution margin ratio 23 Which statement describes a fixed cost The amount per unit varies depending on the activitv level It varies in total at every level of activity It remains the same per unit regardless of activity level Its total varies proportionally to the level of activity 24 Disney s variable costs are 30 of sales The company is contemplating an advertising campaign that will cost 22000 It sales are expected to increase 40000 by how much will the company39s net income increase 280 00 180 is also known as full costing treats fixed manufacturing overhead as a period cost 26 Which cost is NOT charged to the product under variable costing Direct labor Direct materials Fixed manufacturina overhead Variable manufacturing overhead 27 Orbach Company sells its product for 40 per unit During 2005 it produced 60000 units and sold 50000 units there was no beginning inventory Costs per unit are direct materials 10 direct labor 6 and variable overhead 2 Fixed costs are 480000 manufacturing overhead and 60000 selling and administrative expenses The per unit manufacturing cost under absorption costing is Copyright 2010 University of Phoenix ONLPPASWEBO4 28 Which of the following is NOT considered an advantage of using standard costs Standard costs can reduce clerical costs Standard costs can make employees quotcostconsciousquot Standard costs can be used as a means of finding fault with W 29 The difference between a budget and a standard is that a budget expresses management39s plans while a standard reflects what actually happened standards are excluded from the cost accounting system whereas budgets are generally incorporated into the cost accounting system a budget expresses a total amount while a standard exnresses a unit amount a budget expresses what costs were while a standard expresses what costs should be 30 If a company is concerned with the potential negative effects of establishing standards they should offer wade incentives to those meetina standards 31 The perunit standards for direct materials are 2 gallons at 4 per gallon Last month 11200 gallons of direct materials that actually cost 42400 were used to produce 6000 units of product The direct materials quantity variance for last month was 2400 favorable 5600 unfavorable 3200 unfavorable 3200 favorable 32 The standard number of hours that should have been worked for the output attained is 8000 direct labor hours and the actual number of direct labor hours worked was 8400 If the direct labor price variance was 8400 unfavorable and the standard rate of pay was 18 per direct labor hour what was the actual rate of pay for direct labor 15 per direct labor hour 18 per direct labor hour 19 per direct labor hour 15 oer direct labor hour 17 per direct labor hour 33 The total variance is 10000 The total materials variance is 4000 The total labor variance is twice the total overhead variance What is the total overhead variance 2000 M 3000 1000 actual overhead costs incurred ratio of actual variable to fixed costs actual hours worked both variable and fixed overhead costs all manufacturing costs fixed overhead costs the overhead volume variance will be unfavorable the overhead controllable variance will be favorable variable overhead costs will be overapplied variable overhead costs will be underapplied 37 Gottberg Mugs is planning to sell 2000 mugs and mugs during April Each mug requires 2 pounds of resin and a half hour of direct labor Resin costs 1 per pound and employees of the company are paid 1250 per hour Manufacturing overhead is applied at a rate of 120 of direct labor costs Gottberg has 2000 pounds of resin in beginning inventory and wants to have 2400 pounds in ending inventory How much is the total amount of budgeted direct labor for April 38 Lewis Hats is planning to sell 600 straw hats Each hat requires a half pound of straw and a quarter hour of direct labor Straw costs 020 per pound and employees of the company are paid 22 per hour Lewis has 80 pounds of straw and 40 hats in beginning inventory and wants to have 50 pounds of straw and 60 hats in ending inventory How many units should Lewis Hats produce in April 39 At January 1 2004 Barry Inc has beginning inventory of 4000 widgets Barry estimates it will sell 35000 units during the first quarter of 2004 with a 10 increase in sales each quarter Barry s policy is to maintain an ending inventory equal to 25 of the next quarter s sales Each widget costs 1 and is sold for 150 How much is budgeted sales revenue for the third quarter of 2004 largest competitor selling company customers competitive market 41 A company must price its product to cover its costs and earn a reasonable profit in all cases its early years thelong run M m 42 The costplus pricing approach39s major advantage is it considers customer demand that sales volume has no effect on per unit costs it is simple to compute it can be used to determine a product s target cost
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