managerial accounting final

Keyser Corporation, which has only one product, has provided the following data concerning its most recent month of operations: Selling price$ 118 Units in beginning inventory400 Units produced2,100 Units sold2,300 Units in ending inventory200 Variable costs per unit: Direct materials$ 37 Direct labor$ 23 Variable manufacturing overhead$ 3 Variable selling and administrative expense$ 5 Fixed costs: Fixed manufacturing overhead$73,500 Fixed selling and administrative expense$29,900 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. What is the net operating income for the month under variable costing?

$11,600

Feldpausch Corporation has provided the following data from its activity-based costing system: Activity Cost Pool/Total Cost/Total Activity Assembly$ 1,210,110/57,000machine-hours Processing orders$ 68,161/2,370orders Inspection$ 153,450/1,980inspection-hours The company makes 760 units of product W26B a year, requiring a total of 1,610 machine-hours, 106 orders, and 36 inspection-hours per year. The product's direct materials cost is $59.86 per unit and its direct labor cost is $17.35 per unit. The product sells for $145.40 per unit. According to the activity-based costing system, the product margin for product W26B is: (Round your intermediate calculations and final answers to 2 decimal places.)

$11,805.54

Paolucci Corporation's relevant range of activity is 4,800 units to 11,000 units. When it produces and sells 7,900 units, its average costs per unit are as follows: Average Cost per Unit Direct materials$ 6.50 Direct labor$ 3.40 Variable manufacturing overhead$ 1.40 Fixed manufacturing overhead$ 3.60 Fixed selling expense$ 1.35 Fixed administrative expense$ 0.90 Sales commissions$ 1.30 Variable administrative expense$ 0.80 If 6,900 units are sold, the variable cost per unit sold is closest to:

$13.40

Davison Corporation, which has only one product, has provided the following data concerning its most recent month of operations: Selling price$ 95 Units in beginning inventory0 Units produced5,000 Units sold4,900 Units in ending inventory100 Variable costs per unit: Direct materials$ 26 Direct labor$ 40 Variable manufacturing overhead$ 1 Variable selling and administrative expense$ 4 Fixed costs: Fixed manufacturing overhead$40,000 Fixed selling and administrative expense$73,500 What is the total period cost for the month under variable costing?

$133,100

Kneeland Corporation has provided the following information: Cost per UnitCost per PeriodDirect materials$6.80 Direct labor$4.15 Variable manufacturing overhead$1.65 Fixed manufacturing overhead $121,500Sales commissions$1.00 Variable administrative expense$0.50 Fixed selling and administrative expense $ 40,500 If 10,000 units are produced, the total amount of manufacturing overhead cost is closest to:

$138,000

Hubbard Kennel uses tenant-days as its measure of activity; an animal housed in the kennel for one day is counted as one tenant-day. During January, the kennel budgeted for 2,100 tenant-days, but its actual level of activity was 2,060 tenant-days. The kennel has provided the following data concerning the formulas used in its budgeting and its actual results for January: Data used in budgeting: ((Cost = Fixed cost + (Variable cost per unit × q) = $9,500 + ($2.70 × 2,060) = $15,062))

$15,062

The following standards for variable manufacturing overhead have been established for a company that makes only one product: Standard hours per unit of output3.5hours Standard variable overhead rate$15.20per hour The following data pertain to operations for the last month: Actual hours3,800hours Actual total variable manufacturing overhead cost$59,090 Actual output800units What is the variable overhead efficiency variance for the month?

$15,200 U

Magno Cereal Corporation uses a standard cost system for its "crunchy pickle" cereal. The materials standard for each batch of cereal produced is 1.4 pounds of pickles at a standard cost of $3.00 per pound. During the month of August, Magno purchased 78,000 pounds of pickles at a total cost of $253,500. Magno used all of these pickles to produce 60,000 batches of cereal. What is Magno's materials quantity variance for August?

$18,000 favorable

Viger Corporation has a standard cost system in which it applies manufacturing overhead to products on the basis of standard machine-hours (MHs). The company has provided the following data for the most recent month: Budgeted level of activity8,000MHs Actual level of activity8,200MHs Standard variable manufacturing overhead rate$6.70per MH Actual total variable manufacturing overhead$52,650 What was the variable overhead rate variance for the month?

$2,290 favorable

Allocations to the Assembly activity cost pool: Wages and salaries (25% × $360,000)$ 90,000 Depreciation (15% × $120,000)18,000 Rent (35% × $180,000)63,000 Total$ 171,000 Assembly: $171,000 ÷ 60,000 labor-hours = $2.85 per labor-hour

$2.85 per labor-hour

Landmann Corporation's relevant range of activity is 7,000 units to 11,000 units. When it produces and sells 9,000 units, its average costs per unit are as follows: Average Cost per Unit Direct materials$ 6.35 Direct labor$ 4.10 Variable manufacturing overhead$ 1.35 Fixed manufacturing overhead$ 13.50 Fixed selling expense$ 2.25 Fixed administrative expense$ 1.80 Sales commissions$ 1.00 Variable administrative expense$ 0.45 For financial reporting purposes, the total amount of product costs incurred to make 9,000 units is closest to:

$227,700

Ieso Corporation has two stores: J and K. During November, Ieso Corporation reported a net operating income of $30,000 and sales of $450,000. The contribution margin in Store J was $100,000, or 40% of sales. The segment margin in Store K was $30,000, or 15% of sales. Traceable fixed expenses are $60,000 in Store J, and $40,000 in Store K. Sales in Store J totaled:

$250,000

Speyer Medical Clinic measures its activity in terms of patient-visits. Last month, the budgeted level of activity was 1,150 patient-visits and the actual level of activity was 1,140 patient-visits. The cost formula for administrative expenses is $3.90 per patient-visit plus $21,500 per month. The actual administrative expense was $22,000. In the clinic's flexible budget performance report for last month, the spending variance for administrative expenses was:

$3,946 F

Lupo Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on machine-hours. The company based its predetermined overhead rate for the current year on the following data: Total machine-hours30,900Total fixed manufacturing overhead cost$154,500Variable manufacturing overhead per machine-hour$ 3.00 Recently, Job T687 was completed with the following characteristics: Number of units in the job10Total machine-hours30Direct materials$ 740Direct labor cost$1,480 If the company marks up its unit product costs by 40% then the selling price for a unit in Job T687 is closest to: (Round your intermediate calculations to 2 decimal places.)

$344.40 ((Estimated total manufacturing overhead cost = Estimated total fixed manufacturing overhead cost + (Estimated variable overhead cost per unit of the allocation base × Estimated total amount of the allocation base) = $154,500 + ($3.00 per machine-hour × 30,900 machine-hours) = $154,500 + $92,700 = $247,200 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $247,200 ÷ 30,900 machine-hours = $8 per machine-hour Overhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $8 per machine-hour × 30 machine-hours = $240))

Pooler Corporation is working on its direct labor budget for the next two months. Each unit of output requires 0.40 direct labor-hours. The direct labor rate is $8.00 per direct labor-hour. The production budget calls for producing 7,200 units in April and 7,000 units in May. If the direct labor work force is fully adjusted to the total direct labor-hours needed each month, what would be the total combined direct labor cost for the two months?

$45,440

Bernson Corporation is using a predetermined overhead rate that was based on estimated total fixed manufacturing overhead of $492,000 and 30,000 machine-hours for the period. The company incurred actual total fixed manufacturing overhead of $517,000 and 28,300 total machine-hours during the period. The amount of manufacturing overhead that would have been applied to all jobs during the period is closest to: (Round your intermediate calculations to 2 decimal places.)

$464,120

Harold Corporation manufactures and sells a single product. The company uses units as the measure of activity in its budgets and performance reports. During March, the company budgeted for 7,900 units, but its actual level of activity was 7,860 units. The company has provided the following data concerning the formulas used in its budgeting and its actual results for March: ((Actual results$ 135,850Flexible budget [$0 + ($18 × 7,860)]141,480Spending variance$ 5,630 Because the actual expense is less than the flexible budget, the variance is favorable (F).))

$5,630 F

Feemster Corporation manufactures and sells a single product. The company uses units as the measure of activity in its budgets and performance reports. During October, the company budgeted for 5,900 units, but its actual level of activity was 5,850 units. The company has provided the following data concerning the formulas used in its budgeting and its actual results for October: Data used in budgeting: ((Revenue per unit$ 29.90Total variable expense per unit16.30Contribution margin per unit$ 13.60Total fixed expense$ 64,200 Flexible budget [($13.60 × 5,850) − $64,200]$ 15,360Planning budget [($13.60 × 5,900) − $64,200]16,040Activity variance$ 680 Because the flexible budget net operating income is less than the planning budget, the variance is unfavorable (U).))

$680 U

The following materials standards have been established for a particular product: Standard quantity per unit of output5.3meters Standard price$19.20per meter The following data pertain to operations concerning the product for the last month: Actual materials purchased9,300meters Actual cost of materials purchased$188,140 Actual materials used in production8,700meters Actual output1,600units What is the materials price variance for the month?

$9,580 U

Mcdale Incorporated produces and sells two products. Data concerning those products for the most recent month appear below: Product I49VProduct / Z50U Sales$ 30,000 / $ 35,000 Variable expenses$ 11,800 / $ 26,550 The fixed expenses of the entire company were $39,160. The break-even point for the entire company is closest to:

$95,512

Piper Corporation's standards call for 1,000 direct labor-hours to produce 250 units of product. During October the company worked 1,250 direct labor-hours and produced 300 units. The standard hours allowed for October would be:

1,200 hours

The Silver Corporation uses a predetermined overhead rate to apply manufacturing overhead to jobs. The predetermined overhead rate is based on labor cost in Department A and on machine-hours in Department B. At the beginning of the year, the Corporation made the following estimates: Department ADepartment BDirect labor cost$ 60,000$ 40,000Manufacturing overhead$ 90,000$ 45,000Direct labor-hours6,0009,000Machine-hours2,00015,000 What predetermined overhead rates would be used in Department A and Department B, respectively?

150% and $3.00 (( Department A Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base Predetermined overhead rate = $90,000 ÷ $60,000 = 150% of direct labor cost Department B Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base Predetermined overhead rate = $45,000 ÷ 15,000 machine-hours = $3.00 per machine-hour ))

The following are budgeted data: January/February/March Sales in units: 15,800/ 21,600/ 18,800 Production in units:18,800/ 19,800/ 17,700 One pound of material is required for each finished unit. The inventory of materials at the end of each month should equal 30% of the following month's production needs. Purchases of raw materials for February would be budgeted to be:

19,170 pounds

Jerrel Corporation sells a product for $230 per unit. The product's current sales are 24,000 units and its break-even sales are 17,280 units. The margin of safety as a percentage of sales is closest to:

28%

Product Y sells for $15 per unit, and has variable expenses of $9 per unit. Fixed expenses total $300,000 per year. How many units of Product Y must be sold each year to yield an annual profit of $90,000?

65,000 units

Production order processing is an example of a:

Batch-level activity.

The journal entry to record applying overhead during the production process is:

DEBIT WIP CREDIT MOH

All other things the same, if a division's traceable fixed expenses decrease then the division's segment margin will decrease.

FALSE

Batch-level activities are performed each time a unit is produced.

FALSE

Budgets are used for the distinct purposes of planning and profit.

FALSE

In absorption costing, nonmanufacturing costs are assigned to units of product.

FALSE

Two companies with the same margin of safety in dollars will also have the same total contribution margin.

FALSE

Under absorption costing, a portion of fixed manufacturing overhead cost is released from inventory when production volume exceeds sales volume.

FALSE

When activity-based costing is used for internal decision-making, the costs of idle capacity should be assigned to products.

FALSE

When closing overapplied manufacturing overhead to Cost of Goods Sold, which of the following would be true?

Gross margin will increase.

Which of the following statements is not correct concerning multiple overhead rate systems?

In departments that are relatively labor-intensive, their overhead costs should be applied to jobs based on machine-hours rather than on direct labor-hours.

There are various budgets within the master budget. One of these budgets is the production budget. Which of the following BEST describes the production budget?

It is calculated based on the sales budget and the desired ending inventory.

In a job-order costing system, indirect labor cost is usually recorded as a debit to:

MOH

The general model for calculating a quantity variance is:

Standard price × (Actual quantity of inputs used − Standard quantity allowed for output).

A continuous or perpetual budget is a 12-month budget that rolls forward one month (or quarter) as the current month (or quarter) is completed.

TRUE

Actual overhead costs are not assigned to jobs in a job costing system.

TRUE

If the variable expense per unit decreases, and all other factors remain the same, the contribution margin ratio will increase.

TRUE

Under variable costing, all variable production costs are treated as product costs.

TRUE

When expressed on a per unit basis, fixed costs can mislead decision makers into thinking of them as variable costs.

TRUE

Which of the following is true regarding the contribution margin ratio of a company that produces only a single product?

The contribution margin ratio multiplied by the selling price per unit equals the contribution margin per unit.

In a flexible budget, what will happen to fixed costs as the activity level increases?

The fixed cost per unit will decrease.

When using data from a segmented income statement, the dollar sales for a segment to break even is equal to:

Traceable fixed expenses ÷ Segment CM ratio

Providing the power required to run production equipment is an example of a:

Unit-level activity.

Depreciation on a personal computer used in the marketing department of a manufacturing company would be classified as:

a period cost that is fixed with respect to the company's output.

How would the following costs be classified (product or period) under variable costing at a retail clothing store? Cost of purchasing clothing/Sales commissions A)ProductProduct B)ProductPeriod C)PeriodProduct D)PeriodPeriod

choice B

Which of the following budgets are prepared before the sales budget? Budgeted Income Statement/Direct Labor Budget A)YesYes B)YesNo C)NoYes D)NoNo

choice c

Under a job-order costing system, the dollar amount transferred from Work in Process to Finished Goods is the sum of the costs charged to all jobs:

completed during the period.

selling costs are indirect costs

flase

A budget that is based on the actual activity of a period is known as a:

flexible budget

Allocating common fixed expenses to business segments:

may cause managers to erroneously discontinue business segments.

If the degree of operating leverage is 4, then a one percent change in quantity sold should result in a four percent change in:

net operating income.

Which of the following would not affect the break-even point?

number of units sold

OVERAPPLIED VS UNDERAPPLIED MOH

overapplied on credit side, underapplied on debit side

Property taxes on a company's factory building would be classified as a(n):

product cost

When preparing a direct materials budget, the required purchases of raw materials in units equals:

raw materials needed to meet the production schedule + desired ending inventory of raw materials − beginning inventory of raw materials.

Mark is an engineer who has designed a telecommunications device. He is convinced that there is a big potential market for the device. Accordingly, he has decided to quit his present job and start a company to manufacture and market the device. Mark purchased a machine two years ago to make experimental boards. The machine will be used to manufacture the new board. The cost of this machine is:

sunk cost

The usual starting point for a master budget is:

the sales forecast or sales budget.

A favorable labor rate variance indicates that

the standard rate exceeds the actual rate

In activity-based costing, the activity rate for an activity cost pool is computed by dividing the total overhead cost in the activity cost pool by:

the total activity for the activity cost pool

A factory supervisor's salary would be classified as an indirect cost with respect to a unit of product.

true

Wages paid to production supervisors would be classified as manufacturing overhead.

true

An activity-based costing system that is designed for internal decision-making will not conform to generally accepted accounting principles because:

under activity-based costing some manufacturing costs (i.e., the costs of idle capacity and organization-sustaining costs) will not be assigned to products.