Acct 505 week 4 midterm exam answers.docx
Acct 505 week 4 midterm exam answers.docx PRG211
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This 0 page Study Guide was uploaded by Topseller Notetaker on Friday November 13, 2015. The Study Guide belongs to PRG211 at Ashford University taught by in Fall 2015. Since its upload, it has received 35 views. For similar materials see in Computer Programming at Ashford University.
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Date Created: 11/13/15
1 Question Student Answer Instructor Explanation Points Received Comments Question Student Answer Instructor Explanation Points Received Comments Question TCO A Wages paid to an assembly line worker in a factory are a Prime Cost YESConversion Cost NO if Prime Cost YESConversion Cost YES a if Prime Cost NOConversion Cost NO if Prime Cost NOConversion Cost YES F Chapter 2 6 of 6 TCO A A cost incurred in the past that is not relevant to any current decision is classified as an period cost F incremental cost F opportunity cost if none of the above Chapter 2 6 of 6 TCO A Property taxes on a company39s factory building would be classified as an Student Answer Instructor Explanation Points Received Comments Question Student Answer Instructor Explanation Points Received Comments Question sunk cost F opportunity cost F period cost variable cost f manufacturin cost J In 9 at Chapter 2 0 of 6 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 Increase No Change F Increase Increase F decrease No Change a F F No Change Increase H F at Chapter 5 0 of 6 TCO F Which of the following statements is true 6 Student Answer Instructor Explanation Points Received Comments Question Student Answer Instructor Explanation Points Received Comments 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 Only statement I is true F Only statement II is true if Both statements I and II are true F Statements I II and III are all true a at Chapter 3 6 of 6 TCO F Which of the following statements about process costing system isincorrect 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 F f In a process costing system materials costs are traced to units of products if Chapter 4 6 of 6 7 Question Student Answer Instructor Explanation Points Received Comments Question Student Answer Instructor Explanation Points Received Comments Question TCO F Equivalent units for a process costing system using the FIFO method would be equal to 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 F units started and completed during the period plus equivalent units in the ending work in a if process inventory plus work needed to complete units in the beginning work in process inventory Chapter 4 6 of 6 TCO B The contribution margin ratio always increases when the break even point increases F break even point decreases F f variable expenses as a percentage of net sales decreases if variable expenses as a percentage of net sales increases if Chapter 6 6 of 6 TCO B Which of the following would not affect the break even point Student Answer number of units sold atquot F variable expense per unit F total fixed expenses iii If F selling price per unit F 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 f be used in the computation of the contribution margin it be used in the computation of net operating income but not in the computation of the F contribution margin be treated differently from variable manufacturing expenses if not be used F Instructor Explanation Chapter 7 Points Received 6 of 6 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 Student Answer Raw materials inventory beginning 7000 add Purchases of Raw Materials 17000 Total goods available to manufacture 24000 Less Raw Materials invty end 8000 Raw materials used in production 16000 Direct Labor 21000 Manufacturing Overhead 22000 Total manufacturing cost 59000 Add Work in Process invty Beg 3000 62000 Less Work in process invty end 2000 Cost of goods manufactured 60000 Instructor Explanation Schedule of Cost of Goods Manufactured for the Larden Corp Direct Materials Beginning raw materials inventory 70 Add purchases raw material 170 Raw materials available for use 240 2 3 Points Received Comments Question Student Answer Instructor Explanation Points Received Comments Question Deduct ending raw materials 80 Raw materials used in production 160 Direct Labor 210 Manufacturing Overhead 220 Total Manufacturing Costs 590 Add beginning work in process inventory 30 Deduct ending work in process inventory 20 Cost Of Goods Manufactured 600 15 of15 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 150000 75 55 Work in process Jun 30 145000 85 75 The department started 475000 units into production during the month and transferred 480000 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 Percent Complete Units Materials Conversion Beginning work in process 150000 075 055 Units started into production 475000 quotUnits completed during June and transferred to the next departmentquot 325000 Ending work in process 145000 085 075 Materials Conversion Units transferred to the next dept 325000 325000 Ending work in process Materials 145000x85 o complete 123250 Conversion 145000x75 o complete 108750 Equivalent units of production 448250 433750 Equivalent Units Materials Conversion Units transferred to the next department 480000 480000 Ending Work in process Materials 145000 x 85 123250 Conversion 145000 x 75 108750 Equivalent units of production 603250 588750 15 of 20 TCO B Drake Company39s income statement for the most recent year appears below Sales 45000 units 1350000 Less Variable expenses w Contribution margin 600000 Less Fixed expenses w Net operating income 225000 Required a calculate the unit contribution margin b calculate the break even point in dollars Student Answer The Unit Contribution Margin C is Unit Revenue Price P minus Unit Variable Cost V C P V Price 1350000 divided by 45000 units 30 price per unit Variable cost per unit 75000045000 1667 Unit contribution margin 1333 b Break even point in dollars Breakeven Point in Sales Total Fixed Expenses Contribution Margin Ratio Total Fixed Expenses375000 Contribution Margin Ratio 600000135000044 Break even point in dollars 843750 Instructor Explanation a Total CM total units 600000 45000 units 133 per unit b Breakeven FC CM per unit 375000 133 281955 units x 30 per unit 8458650 Sales at 1350000 45000units 30 per unit Points Received 25 of 25 Comments 4 Question Student Answer TCO E The Dean Company produces and sells a single product The following data refer to the year just completed Selling Price Units in beginning Inventory Units Produced Units sold Variable Costs per unit Direct materials Direct labor Variable manufacturing overhead Variable selling and admin Fixed Costs Fixed manufacturing overhead Fixed selling and admin Assume that direct labor is a variable cost Required 450 200 50 30 15 275000 230000 25000 22000 a Compute the cost of a single unit of product under both the absorption costing and variable costing approaches DM 200 DL 50 Var OH 30 Variable cost per unit 280 Direct Materials 200 Direct Labor 50 Variable Manufacturing Overhead 30 Fixed manufacturing overhead 27500025000 11 Cost of single unit of product using absorption costing 291 Instructor Explanation Points Received Comments a and b Variable costing Direct materials 200 Direct labor 50 Variable manufacturing overhead 30 280 Absorption costing Direct materials 200 Direct labor 50 Variable manufacturing overhead 30 Fixed manufacturing overhead 11 275000 25000 291 c Absorption costing income statement Sales 9900000 Less cost of goods sold 22000 x 29100 6402000 Gross margin 3498000 Selling and administrative expenses Variable selling and admin 330000 Fixed selling and admin 230000 560000 2938000 d Variable costing income statement Sales 9900000 Less variable expenses Product costs 22000 x 280 6160000 Variable selling and admin 330000 6490000 Contribution margin 3410000 Less fixed expenses Fixed manufacturing overhead 275000 Fixed selling and admin 230000 505000 2905000 30 of 30
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